Oxfam is trying to persuade government agencies to provide additional funding to the charity after exchange-rate fluctuations in the wake of the vote to leave the European Union caused its purchasing power to decline by 17 per cent, its director of finance Alison Hopkinson has said.
Hopkinson told Third Sector that Oxfam’s programmes were now 17 per cent more expensive because of the effect of the EU referendum result on the value of the pound.
She said the charity, whose income reached a record high of £415m in 2015/16, was asking institutional donors such as the Department for International Development and the European Commission’s humanitarian aid department, known as Echo, to share currency risks with the charity if their donations fail to meet programme costs.
The pound fell as much as 12 per cent against the dollar in the days after the referendum, and 8 per cent against the euro.
"We’re asking the main government agencies, but are not having much luck," said Hopkinson. "They’re wanting us to shoulder the risk – they’ve made that quite clear. But we’ll keep asking them."
But she said that some institutions were starting to listen to the charity’s concerns. "They’re starting to reduce what’s required of us, although they won’t give us more money," she said. "That’s not necessarily the answer we want, but it does mean we can financially continue."
Hopkinson said the charity had been badly affected where it had contracts to pay partner NGOs in dollars or rupees or currencies that were pegged to the dollar because it now had to buy the currency at more expensive rates. She said it also faced problems when paying partners in sterling because it meant those partners could accomplish 17 per cent less than before.
The problem was apparent in every country in which Oxfam worked, she said, but had been particularly acute among the charity’s projects in Nepal, the Democratic Republic of Congo and Sudan.
She said the charity had not had a very sophisticated forward currency purchasing system until now, but was starting to mitigate its future currency risks by buying large quantities of currency in advance.
Tim Hunter, Oxfam’s director of fundraising, has also spoken about the negative impact of Brexit on the charity’s finances. In July he said that loss of EU funding could cost Oxfam £40m a year, the equivalent of 10 per cent of its annual income