why charities are a big waste of time

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    Ten-year wait for tsunami aid
    By Ewin Hannan
    March 1, 2005

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    No tsunami fatigue so far
    Millions of dollars in public donations to Asian tsunami victims will not be delivered for up to 10 years as Australian aid agencies shift from emergency relief to long-term rehabilitation and reconstruction of the devastated region.

    An Age survey of Australia's top six non-government aid agencies has also found their combined administrative costs on the tsunami appeal will soak up $21.2 million - or almost 9 per cent of their total funds raised.

    The six agencies, which have closed their appeals, brought in $243 million of the $260 million raised in Australia.

    Red Cross, which with $96 million raised the most of any local agency, said it would not pass on all the donations to tsunami victims until 2015. It has spent $24 million.

    Caritas Australia, which runs Project Compassion, confirmed the $16 million raised from its tsunami appeal would also not be spent for 10 years. It has spent $4 million, but $8 million will be held for three years and spent between 2008 and 2015.

    Red Cross Australia's new chief executive, Robert Tickner, defended the 10-year time frame. "I think it's increasingly accepted that after the emergency relief operation comes in some ways an even more demanding task of rebuilding whole communities," he said.

    "We're talking about complete towns and villages wiped out. We're talking about radical changes in the land that are probably going to last forever. It's not just the terrible loss of life but, indeed, whole economies were washed away. To rebuild that simply can't be done overnight. I think that's increasingly accepted. People accept we need to get the response right."

    Oxfam, which raised $21 million, will spend the funds over five years. Forty per cent will be allocated this year, 20 per cent in each of 2006 and 2007, and 10 per cent in 2008 and 2009.

    World Vision Australia, which has transferred more than $60 million in unspent Australian donations to its "global treasury" in California, will spend half of the funds raised within 12 months. The rest is due to be spent over two to three years.

    Chief executive Tim Costello said Australian World Vision representatives retained control over how the funds were spent, despite their being held in Los Angeles.

    "We have a partnership model where the legal, moral, and financial responsibility for how the funds are raised and spent rests with the board here," he said. "We have the final say."

    The six agencies said any interest earned on unspent funds would be allocated to tsunami projects. Red Cross holds the funds in a bank account and short-term cash deposits while Caritas retains funds as bank bills in "low-risk investment instruments".

    The big agencies confirmed most were using donations to fund additional overhead costs, including air fares, accommodation and wages of employees working on tsunami projects. But these extra administrative expenses are allocated as project costs in agency financial statements.

    Due to blanket media coverage and corporate support, four of the six agencies have kept their overheads below 8 per cent.

    But Red Cross Australia and Oxfam Community Aid Abroad have a 10 per cent cap - equal to a combined $11.7 million - on overheads.

    Mr Costello said that before he joined World Vision its executives received bonuses, flew business class and had access to an executive car park at the organisation's Burwood East headquarters. While he has flown business class twice since becoming chief executive (the first because it was "pre-booked" and the second when recovering from an operation), Mr Costello said he and other staff flew economy class. Bonuses and car park privileges had been scrapped.

    UNICEF and Oxfam disclosed the salaries of their senior executives - they range from $65,000 to $93,750 - but the Red Cross and Caritas refused. World Vision and Care Australia said executive salaries would be detailed for the first time in their next annual reports.

    Several agencies said tsunami donations were used to finance the air fares and accommodation of Australian workers sent to do relief work in the tsunami-affected region. These costs are not identified as separate line items in the agency's financial statements, but included within project costs.

    The Institute of Public Affairs, an outspoken critic of the agencies, said the costs should be broken down and disclosed.

    "It makes it impossible to ascertain how much money goes to the needy," IPA senior research fellow Don D'Cruz said. "I don't think that is acceptable. The public want to know how much is getting to the people. By embedding these costs, they are really fudging the issue."

    But Mr Costello said when Australian World Vision staff were sent to Sri Lanka to work on the relief effort, "they are not working for me any more".

    "I think it's reasonable their costs would be allocated to the projects because they are actually managing staff on the ground," he said. "You can't deliver aid, if you think about it for a moment, without actually someone being there, receiving it and unloading it. People like to say there should be volunteers doing all of that, but, in an emergency you can't do that. You have to have people who know what they are doing, and who are trained."

    UNICEF Australia has raised $9 million, held by the organisation's New York office. Its Australian chief executive, Carolyn Hardy, said travel and accommodation costs of field office staff were included in project costs.

    Ms Hardy said UNICEF had 40 staff members in Aceh sleeping and working out of a 13-room hostel in January. "There is no running water or sanitation and only intermittent electricity," she said. "These are not easy conditions. Staff there are getting minimal sleep and there are huge health risks for staff. In the past two weeks, two UNICEF staff members in Aceh have developed typhoid and one now has dengue fever."

    Mr Costello said the agencies knew the risks of losing public confidence. "If it is abused, if the public becomes cynical, it won't be us that suffer, it will be the actual poor," he said.

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