August 2009

Monday, August 31, 2009

Microfinance Institutions Weathering the Economic Storm

While the microfinance industry undoubtedly suffered from the economic slowdown, the industry is surviving amongst deteriorating economic conditions in poor countries and the high cost of capital.  To date, no microfinance banks have failed, and many report better repayment rates than traditional corporate banks.  The Grameen Bank, founded in 1983, continues to boast a 95% average repayment rate, partly because the majority of its loans are invested in retail shops, small scale agriculture, and crafts making.  These businesses are all local in nature and thus partially insulated from the global slowdown.

Microfinance is More Than Loans

The demand for banking services in poor nations often goes well beyond simple loans, according to an article in Time.  The demand for depositories in some areas is strong enough that Bank Rakyat in Indonesia has ten depositors for every loan.  According to the bank, 30% of those who receive microfinance loans end up using part of the loan for household and personal expenses, not out of a lack of savings, but because their savings are often placed in illiquid assets such as livestock or jewelry.

African Union Troops in Somalia Underfunded

Peacekeeping troops in Somalia are underfunded and undermanned as they battle rebel troops.  Six troops died and dozens were sickened from a mysterious illness that proved to be beriberi, a vitamin deficiency usually seen only in famines.  There are reports of AU peacekeepers using sticks and cigarette packs to aim mortar shells and the Burundi’s contingent of the AU forces lacks any bomb detection equipment despite a daily threat of roadside bombs.  The mission’s budget has never been fully funded and the 8,000 troops pledged, only 5000 of which are actually on the ground, is considered by experts to be about half of what is necessary to bring peace and stability to the country.

Two Civilian UNAMID Workers Kidnapped in Darfur

On Saturday, an unidentified man and woman working for UNAMID as civilians were kidnapped at gunpoint in Darfur.  This is the first time staff of UNAMID has been attacked in the region.  UNAMID is a joint peacekeeping operation consisting of United Nations and African Union troops.


Friday, August 28, 2009

Pakistan Uneasy About US Aid

President Obama has pledged almost $1.5 billion dollars to stabilize Pakistan, but the Pakistani Finance Minister, Shaukat Tarin, has complaints about how the aid is being delivered.  He flat out rejected the idea that Pakistan would accept any aid tied to increased monitoring of the country’s nuclear arsenal and urged the US to route money through Pakistani agencies instead of USAID.  In an interview with the Financial Times, Mr. Tarin claimed that “frankly, we only receive almost 50-55 per cent of the aid, 40-45 percent becomes expenses [because of intermediation costs by the US].”   The US claims that the administrative costs ensure that the money is being spent properly.

IRS Rejects Proposal to Redesign Foundation Tax Returns

The Taxpayer Advocacy Panel, composed of 99 citizens from across the country, proposed that that the IRS modify Form 990-PF to accommodate the limited resources of small foundations.  The panel asked that the IRS create special forms, similar to the 990-N and 990-EZ that small charities use, to reduce the regulatory burden on small foundations.   The IRS rejected the idea, preferring to wait and evaluate the effectiveness of recent revisions to Form 990 before tackling the 990-PF.

Volunteering Falls, According to Report

Despite anecdotal evidence that the recession has led people to give more time in service, a survey conducted for the National Conference on Citizenship found that 72% of Americans were spending less time volunteering and engaging in other civic activities.  The Conference has compiled data as far back as 1975 and says that this is the first decline in volunteering since the recession in the early 1980’s.  According to the data compiled, volunteering typically increases during economic declines.

USAID Funds New Signs in the West Bank

The United Press International reports that USAID is funding the replacement of road signs in the West Bank in an effort to prepare for the establishment of a Palestinian state.  USAID is replacing Hebrew signs with Arabic and English signs in areas under full or partial control of the Palestinian Authority.

Thursday, August 27, 2009

Nonprofits Review Charitable Gift Annuities

The volatility of Wall Street is providing charities with the opportunity to raise money through charitable gift annuities (CGA), contracts in which a donor receives a partial tax deduction on a donation in return for periodic payment.  Investors look to the security for stability, but to charities that provided CGAs, they can be a great risk if improperly managed.  The NonProfit Times reports that CGAs are usually backed by the entire assets of the charity, meaning that “in extreme cases organizations may need to use funds from sources such as operating funds” to pay the annuities if their investments falter.

Forbes Finds 14 Billion Dollar Donors

Forbes Magazine has compiled a list of philanthropists who have donated at least $1 billion over their lifetime, and topping the list is Bill Gates, whose donations to the Bill and Melinda Gates Foundation accounted for most of the $28 billion he has donated.  Out of the 14 donors, three were not billionaires themselves, choosing philanthropy over joining the ranks of the world’s 793  billionaires.  Forbes also notes that only one of the 14 was not self made and 10 of the 14 are American, despite the fact that less than half the world’s billionaires reside in the US.

Thursday, August 20, 2009

Court Rules that Government Freeze of KindaHeart’s Assets is Unconstitutional

According to the ACLU, a federal court ruled yesterday that the government could not freeze a charities assets without due process.  In 2006, the Treasury Department’s Office of Foreign Asset Control (OFAC) froze the assets of a Muslim charity, Kindheart, while it investigated whether the charity should labeled a “specially designated global terrorist” (SDGT).  The charity was never found to be supporting terrorists, yet the government maintained the freeze, essentially shutting down the charity for three years, without a warrant, hearing, or other due process.  The ruling declared that the US government could not freeze the assets of any charity in the name of national security without probably cause and a warrant.  Additionally, the judge ruled that the government had an obligation to inform Kindheart of the reason their assets were frozen and provide an opportunity for Kindheart to respond to the allegation.

Does Genocide Best Describe the Crisis in Darfur?

The Christian Scientist Monitor published an interesting, albeit controversial, article that discusses the implications of labeling the conflict in Darfur a “genocide.”  It questions whether the “Save Darfur” movement has put too much emphasis on the physical violence, which undoubtedly occurred, at the expense of neglecting the humanitarian crisis, which stems from the war and is causing the majority of the casualties.  The article explores the implications of how the movement’s lobbying efforts affect of the type of aid given to Darfur.

Flood Forces Sri Lanka to Relocate 16,000 Tamils

The government of Sri Lanka has begun relocating 16,000 Tamil refugees as flood waters hit camps.  More monsoon rain is expected over the next few days, and most of the camps cannot withstand the heavy rains expected.  The government hopes to resettle 80% of the refugees by the end of the year but is still holding them as demining efforts continue in the north.

Refugees Flee Northern Yemen to Avoid Conflict

The intensity of fighting between the government and rebels in northern Yemen has forced around 10,000 people to flee southward over the past two days.  The UN estimates the total number of displaced to be between 125,000 and 150,000.  UNICEF and the World Food Program are both ramping up efforts, but currently can only access about 10% of the affected population.

If you found this blog, than you probably know there are other great blogs out there.  In this new feature “Say What?” the Nonprofit Monitor will bring you a sampling of what some of the best blogs are saying about matters of interest to the nonprofit community.

Crooked Timber – World Humanitarian Day

Conor Foley wrote a piece on the announcement of World Humanitarian Day.  As a humanitarian worker who lost friends in the Canal Hotel bombing of 2003, he gives his reaction to honoring fallen aid workers.

Tactical Philanthropy- Why We Need Philanthropic Equity

Sean Stannard-Stackon, who writes for the Chronicle of Philanthropy, is promoting the idea that nonprofits need to differentiate money spend on delivering services and money spend on building the organization, which he calls philanthropic equity.  Highly recommended post.

PHILANTOPIC – Q&A With X PRIZE Foundation’s Peter Diamandis

Matt Sinclair of the Philanthropic News Digest interviews the chairman and CEO of the X Prize Foundation.  Mr. Diamandis discusses how the foundation uses prizes to incentivize innovation in philanthropic organizations.

The Nonprofit Law Prof Law Blog

There were five posts yesterday on changes in charity law in India, Azerbaijan, Zambia, and Serbia.  Zambia is attempting to restrict the operations of international NGOs, while the other three are revamping outdated systems and bringing their countries closer to international standards.

Wednesday, August 19, 2009

World Humanitarian Day

Victims of the Canal Hotel bombing

Victims of the Canal Hotel bombing

The UN has declared today, August 19, the first World Humanitarian Day, in honor of the aid workers who gave their efforts and all too often their lives to alleviate the suffering of the most vulnerable.  This date marks the sixth anniversary of the bombing of the Canal Hotel in Baghdad, which killed 22 people, most of whom where UN staff.  A senior UN official, Abdul-Haq Amiri spoke yesterday about the UN’s concerns with the rising violence against aid workers.  In 2008, 122 humanitarian workers were killed, three times more than in 1998.  Meanwhile, others are questioning whether part of the rise in violence can be attributed to the increase in missions that combine military and humanitarian goals, blurring the distinction between aid worker and soldier.

Moving Somali Refugees Relieves Pressure from Overcrowded Camp

The largest refuge camp in the world, in Dadaab, Kenya, is currently inhabited by 289,500 people, three times more than the camp was designed to hold.  In order to help relieve some of the pressures of overcrowding, the UN and Kenyan government have agreed to move 12,900 Somali refugees to a camp in Kakuma, a three day bus journey away.  Most of the refugees are Somalis fleeing from escalating violence in neighboring Somalia.  So far this year, nearly 43,000 refugees have come to the camp in Dabaad.

US Pledges $8 Million to Aid Sri Lanka

USAID announced today that it would provide $2 million dollars to help meet the immediate needs of Tamils internally displace persons.  Additionally, the US Department of State is providing $6 million to demine areas in northern Sri Lanka in order to begin repopulation.  Since 2008, the US has provided $68 million to Sri Lanka as it recovers from a lengthy civil war.

Tuesday, August 18, 2009

Peace Corps Pulling out of Mauritania

The US Peace Corps have removed over 100 aid workers from Mauritania amid a rise in violence.  A suicide bombing killed two people earlier this month, and al-Qaeda claims to have killed an American aid worker in June.  The Peace Corps have also moved remaining staff to a training center in Senegal for security reasons.

Kidnappings in Darfur Hamper Aid Efforts

The recent wave of kidnappings in Darfur is adding to the difficulty of working in Sudan, which had previously expelled 13 international aid groups.  Medecins Sans Fronteires (MSF), and the Irish Aid group, Goal, have stopped operations certain parts of northern Darfur after the abduction of staff.  Most of the kidnappings are occurring in rural parts of the country, so aid agencies have moved foreign staff to urban areas, and many worker only leave cities for brief trips to train and supervise local workers.  Additionally, many experienced aid workers are refusing to go to areas with a high risk of kidnapping, leaving dangerous, yet important, missions to younger, less experienced staff.

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