Oxford Committee for Famine Relief

Oxford Committee for Famine Relief - Comments

4) The financial resources

-Regarding the financial resources, Oxfam-Hong Kong and Oxfam-Quebec publish their budgets from April 1 to March 31 of the following year; Oxfam-Spain, Oxfam-New Zealand and Oxfam-Australia, from July 1 to June 30; Oxfam-Ireland, from May 1 to April 30; Oxfam-Canada, from October 1 to September 30; Oxfam-America, from November 1 to October 31. Hence the respective figures used in our database for 2001 cover the periods starting from 1st April 2001, 31st July 2001, 1st May 2001, 1st October 2000, and 1st November 2000. As for Oxfam-UK, budgets are calculated from May 1 to April 30 of the following year. Consequently, the figure used for 2001 covers the period starting on 1st May 2001, with the first four months of the year 2002. Since 1999, the consolidated statement of financial activities has also changed and incoming resources now include all Oxfam-UK’s trading revenues, which were previously calculated net of the costs. For lack of access to former reports, the figures used before 1989 come from data collected by the Charities Aid Foundation and calculated in real terms of 1987. Regarding Oxfam-Australia, there are also difficulties because the organisation started to publish its total incoming resources in 2002 only, when it combined accounts of CAA, its shops and its service activities. As a result, the proportion of private funding naturally rose up. Otherwise, for CAA alone, it would be 79% of a budget of Au$46,3 millions in 2004, 77% of Au$29,2 millions in 2003 and 66% of Au$31,5 millions in 2002. As for the Irish and Spanish sections, they include all the revenues from their commercial activities; Hong Kong publishes them net of cost; the American, Belgian, Canadian, Dutch and Quebec sections do not let the reader know more in this respect. The exchange rates in US Dollars or in Euros are calculated by AidWatch at the closing date of the accounts for Australia and Canada; the annual average for Quebec, Hong Kong and New Zealand.
-At the worldwide level, Oxfam-International has the strike force of a trans-national corporation, with financial resources of $350 millions in 1996, $1,224 billion in 1999, $1,105 in 2000, $1,254 in 2001, $1,889 in 2002, $2,078 in 2003, $2,629 in 2004, $4,384 in 2005 and $5,090 in 2006. In comparison, the budget of the Liberian State was $80 millions in 2005; the gross national product of Burundi, $620 millions in 2002!
-With almost equal shares, the two richest sections, in Great Britain and the Netherlands, represent more than two thirds of the financial resources of the movement. In this respect, the growth of Oxfam-UK is quite impressive, with three peaks during the Cambodian crisis in 1979, the Ethiopian famine in 1984 and the Asian tsunami disaster in 2004. While incoming resources rose up from £17 millions in 1979 to £30,2 millions in 1980, the budget of the Oxford Committee began to double and exceeded for the first time the revenues of the Salvation Army in 1981. Due to a successful fundraising for the famine victims in Ethiopia, it doubled again between 1984 and 1985, from £33,6 millions to £63 millions. According to the Charities Aid Foundation, Oxfam-UK eventually became the most appreciated NGO of British donors during the 1990s, ahead of the Salvation Army and Save the Children.
-With equal shares, two thirds of the Oxford Committee’s financial resources come from individual donations and the proceeds of its shops. The development of commercial activities is supposed to guarantee a relative independence from governmental grants, even if it means lobbying the British Parliament, as in March 1997, so that humanitarian organisations should continue to be partially exempted from the payment of VAT (Value Added Tax). Like Oxfam-Trading in the United Kingdom, the other national sections have their own companies: Bridgehead in Canada from 1984 to 1998, Community Aid Abroad Trading Pty. Ltd. (Proprietary limited company) in Australia since 1986, Oxfam-Wereldwinkel/Magasins du monde in Belgium since 1975, CEOQI (Commerce équitable Oxfam-Quebec Incorporated) in Quebec since 1997, etc. The Australians, for instance, were the first to follow the British example when they started in 1965 to sell craftwork from developing countries in chain stores launched under the name of Trade Aid, then Trade Action Pty. Ltd. After two consecutive deficits in 1976 and 1977, the business was sold in 1979 but it started again with the founding, in 1986, of the Community Aid Abroad Trading Proprietary limited company, now directly under CAA’s responsibility. As for Oxfam-Belgium, it experimented a first fair trade shop in Antwerp in 1971. In the same vein, the Oxford Committee tried to check its procurement system and to develop good commercial practices against the exploitation of craftsmen or children in the third world. Oxfam-UK opened its first fair trade shop in York in March 1996; Oxfam-Quebec, in Toronto in June 1997. Many things are sold, from craftwork to second hand clothes or food products: rice in Hong Kong, coffee in the United Kingdom or a mineral water which is ironically called Eau Secours (“Help”) in Quebec. The range is quite large. In Hong Kong, OHK sells educational material; in Australia, Oxfam has commercialised its expertise through an office, CAA Development Services, which was created in 1983 and which became independent under the name of IDSS (International Development Support Service) in 1987.
-Another source of private funding comes from the organisation of music concerts (in Great Britain), long-distance races (in Australia), tearoom parties (in Hong Kong) or golf tournaments (in Quebec). Ethically speaking, all national sections refuse to allow child sponsorship, a fundraising method which is very profitable because it appeals to donors, but which individualises aid at the risk of exacerbating jealousies and dividing the beneficiaries’ community. Yet Oxfam’s marketing strategies can also be sensationalistic and induce feelings of guilt. For example, Oxfam-America, Hong Kong, Canada and Quebec organise “hunger banquets” where only a minority of the guests eats a complete meal, while the majority is supposed to represent the poor of the third world and has only water and rice. A pioneer in fundraising, the Oxford Committee used modern marketing techniques very early and benefited first from the preferential tariffs of a specialised agency, Alexander Butterfield. Like its Quebec counterpart, the organisation was afterwards accused of “humanitarian pornography” because it often showed starving children. In Great Britain, the Charity Commission even compelled it to withdraw some deceitful posters because its programmes targeted adults and not only minors. To no avail: according to Vanessa Pupavac, Oxfam-UK still used simplistic slogans that condemned materialism and contradicted the wishes of the Chinese or the Indians to consume more goods. In 2008, for instance, the organisation linked the wealth of the North with poverty in the South. Its catchphrase read: “obesity levels rising while two-thirds of the world go hungry”. As noted by Benedict Nightingale, however, Oxfam-UK’s advertisement campaigns continued to generate important funds. Likewise, the Belgian section was criticised by feminist associations in October 2006 because it promoted fair trade products through sexist and provocative posters showing half-naked and “fatal” women, one lying on a bed of candies, the other dressed up as a nun in love with an “extra virgin” olive oil. If such a campaign provoked the resignation of some supporters, it did not affect Oxfam’s sales.
-Regarding private funding, again, the movement can also rely on the contribution of businessmen. At the worldwide level, it takes part in the Global Compact, a voluntary corporate responsibility initiative launched in 2001 by the United Nations General Secretary, Kofi Annan, in order to promote collaboration between NGOs and companies. In Quebec, Oxfam works with a bank, Desjardins. In Belgium, it issues bonds and created with Siemens a consortium of companies that are committed to development, the Corporate Funding Programme. In Holland, NOVIB launched in 1996 an investment fund with ASN Bank (Algemene Spaarbank voor Nederland). In Great Britain, the Oxford Committee was for a long time very close to the Cooperative Bank and a Quaker company, Northern Foods. Since 2005, eventually, Oxfam-America has labelled the “fair trade” coffee served in McDonald’s fast food restaurants.
-For ethical reasons, the movement sometimes refused corporate sponsorship from dubious companies. In 1985, for example, Oxfam-UK turned down an offer from the Barclays Bank because of its investments in South Africa despite the international sanctions against the apartheid regime. In the same vein, the organisation rejected a donation from Rothmans, both because the company worked in South Africa and because the tobacco industry facilitated addiction to smoking. According to Ruth Phillips, Oxfam-Australia also established in 1997 guiding principles which were never published and which theoretically forbid the organisation to receive subsidies from corporations that are responsible of environmental and social damages. As for Oxfam-America, it pretends to refuse funding from industries against which the movement is advocating. Eager to promote low-cost generic drugs for the poor in the third world, the organisation should therefore reject corporate sponsorship from pharmaceutical firms whose patents rise the prices and penalise developing countries. However, from 2002, Oxfam-America has received money from one of these companies, Pfizer, which tested a vaccine killing several children in Nigeria in 1996. In this respect, there appear to be many contradictions between fundraising and humanitarian values. On the one hand, Oxfam criticises oil companies because they pollute the environment or back dictatorships; on the other hand, the American and British sections received support from the BP Foundation (British Petroleum) in 2002 and 2005, while Oxfam-Australia was sponsored by a local subsidiary of Shell in 2005. Despite its positions against the arms industry, the Oxford Committee accepted to sell war toys in its shops in 1976 and the movement did not refuse contributions from private security companies such as Securicor Gurkha Services for Oxfam-Hong Kong and Securitas for Intermón. Such contradictions do not spare third world collaborators either. For instance, Oxfam-UK got funding from SAB (South African Breweries), while its Indian partner AWARE (Action for Welfare and Awakening in Rural Environment) was demonstrating and asking for a total prohibition of alcohol sales and consumption in Andhra Pradesh and Orissa. Undoubtedly, the ethics of the movement changed. In 1976, the Oxford Committee had refused revenues from the lottery because gambling helped money laundering and contributed to waste the savings of poor households. Now, Oxfam-UK and NOVIB accept funding from the British and Dutch national lotteries.
-As far as governmental grants are concerned, the various national sections of the movement follow different policies. To one extreme, Oxfam-America and Agir Ici refuse all public subsidies. To the other, the Quebec, Dutch, Australian and Belgian sections regularly work for the overseas cooperation departments of their country. Regarding the budget of CAA, for instance, the percentage of governmental grants rose from 5% in 1975 to 51% in 1984, while financial resources increased from Au$2,03 millions in 1980 to Au$1,56 million in 1982, Au$3,66 millions in 1984, Au$4,76 millions in 1986, Au$7,85 millions in 1988 and Au$12,38 millions in 1990. This proportion then decreased when the organisation merged in 1992 with another NGO, the Australia Freedom from Hunger Campaign, which relied more on private funding. The situations are quite different from one country to another. In a book published in 2007, Ian Anderson shows that from 1984 up to 1996, the percentage of public funding grew a lot in the sections of Spain, Netherlands, Great Britain, Quebec, New Zealand and Belgium, but decreased in Australia, Canada and Hong Kong.
-Oxfam-UK is between the two extremes of Novib and Agir Ici. Eager to avoid the political constraints of the British Government or the European Union, the Oxford Committee decided to limit public subsidies to 20%, then to 10% of its budget, with a maximum of 20% for each project. Yet the proportion of private funding fell from 95% of its financial resources in 1970 to 85% in the beginning of the 2000s. According to the Charities Aid Foundation, Oxfam-UK’s budget actually increased thanks to a rise in governmental grants or contracts during the 1980s and 1990s. Some public funding raise ethical issues in this regard. Since the beginning of the 1990s, for instance, Oxfam-UK has received grants from the Jersey and Guernsey overseas aid agencies. But the Channel Islands launder the dirty money of third world dictators like General Sani Abacha in Nigeria between 1993 and 1998. Hence Oxfam-UK’s activities overseas risk being funded by the embezzlement of developing countries where the state does not invest in education or medical infrastructures.
-Financial integrity has sometimes been a problem for national sections: directly or indirectly. NOVIB, for instance, was first presided by the prince consort Bernhard Peter zur Lippe-Biesterfeld, a count from German origin who got involved in various fraud and corruption scandals (notably the Lockheed Affair in 1976 or the Project Lock that aimed at training South-African mercenaries for the apartheid regime in 1989), not to mention its dubious relationships with Robert Vesco, an international crook, and Tibor Rosenbaum, a Swiss banker of the Mafia. As for Oxfam-Quebec, it experienced a serious internal crisis in 1991 when local newspapers revealed that its president, Jean O’Keefe, had embezzled funds and taken advantage of his position to buy first class airplane tickets for himself. He was dismissed and replaced in 1992 by people like Jean-Guy Brodeur, a former public relations officer of the Canadian Railways, and Jean-Pierre Charbonneau, who returned to active politics in 1994 and to whom succeeded Nicole Saint-Martin, a director of the Research and Teaching Institute for Cooperatives. The then director of Oxfam-Quebec, Gaston Truchon, had also to resign and left his place to Pierre Véronneau in September 1993. Actually, the whole executive board of the organisation was in the hands of businessmen and only three members out of thirteen had an experience about developing countries.
-In any case, only a small percentage of the financial resources of the movement, between one quarter and one fifth, is effectively spent in developing countries: 27% ($303 millions) of Oxfam-International’s budget in 2000, 25% ($318 millions) in 2001, 20% ($369 millions) in 2002, 19% ($402 millions) in 2003, 20% ($528 millions) in 2004, 12% ($528 millions) in 2005 and 13% ($638 millions) in 2006. The rest goes to advocacy, administration, management costs and fundraising.
-Finally, the financial structure of Oxfam’s partners in developing countries reveals a high dependency on western subsidies. In Indonesia, for instance, the Legal Aid Foundation YLBHI (Yayasan Lembaga Bantuan Hukum Indonesia) experienced a serious crisis in 2005 when its two main backers withdrew their support, following internal administrative problems. Likewise, in Kenya, the GBM (Green Belt Movement) did not succeed in attracting donations from individuals, yet did not want to sell the seeds it gave for free to farmers. Consequently, it depended entirely on the Danish Development Agency, the Finnish Government, the Mobil Oil Company and NOVIB, which became its main backer when it lost subsidies from Norway because Nairobi broke its diplomatic relationships with Oslo in 1990. In Sri Lanka, writes Jehan Perera, the SSM (Sarvodaya Shramadana Movement) even became a subcontractor for western sponsors. Established in 1958, it initially relied on members’ contributions until the recruitment of its first salaried employee in 1968. But the Dutch, British and Canadian sections of Oxfam soon started to fund its health and education programmes, with the management of 203 children libraries in 1976, against 193 in 1975, 180 in 1974, 160 in 1973, 150 in 1972 and 82 in 1971. As a result, the organisation got institutionalised. Its nursery schools (147 in 1976, against 17 in 1972) were recognised by the Sri-Lankan government and a donors consortium was set up in 1985 to ease and standardise financial procedures. In the end, the SSM went on the verge of bankrupt in 1994 when NOVIB suddenly and unilaterally decided to reduce its subsidies.
-Generally speaking, many partners of the Oxford Committee in the third world cannot survive without funding from developed countries. The majority of their financial resources comes from governmental cooperation agencies or Oxfam’s sections, up to 50% of $2,25 millions for AWARE, 77% of $475 000 for ORAP, 80% of $675 000 for IBASE and 90% of $6 millions for the SSM in 1991. Undoubtedly, most of these NGOs seek to become autonomous from international aid. In Sjef Theunis’ book, for instance, AWARE claimed in 1991 that it would become financially independent by the year 2000 and reminded that it turned down in 1977 a proposal of governmental development agencies for a funding with strings attached. As for ORAP, it launched a commercial foundation in 1991 but still depended a lot on the UNDP (United Nations Development Programme). The only real success in this matter was BRAC, which succeeded in reducing the proportion of foreign funding from 95% in the 1980s to around 25% at the beginning of the 2000s.