How rising costs have affected Ripple Effect's work

Last autumn I wrote of the global economic challenges and the importance of financial sustainability at Ripple Effect. Now, as we launch an emergency campaign to support 92,000 people in our country programmes who are facing the worst hunger crisis in a generation, I want to reflect on what has – and what hasn’t – changed. 

As expected, our concerns over inflation and the weakened pound have continued to have a detrimental impact – both in driving up the cost for us to deliver our work and causing losses due to foreign exchange. Despite mitigating where possible (through currency hedging and bulking transfers), from July to December 2022, £180,000 has been wiped out through foreign exchange losses alone.

The other big challenge to confront has been the cost of living crisis in the UK, which has substantially impacted how much our loyal supporters have been able to donate. We recently conducted a survey and found that over 53% of respondents now needed to give less to the charities they support.

We have seen this come to fruition. The number of cancellations for regular gifts to Ripple Effect has risen dramatically. Over the past six months 250 people have cancelled their regular monthly gift to us. With an average donation of £15 a month, that would equate to £45,000 over a year.

When I last wrote, in September, the International Monetary Fund was predicting a global recession. Their recent announcement gives a cautiously brighter outlook internationally although advised that “Fiscal support should be better targeted at those most affected by elevated food and energy prices”. In the countries where we work, food and fuel prices have skyrocketed.

In the UK we have already seen the inflation rate start to ease and oil prices going down. Earlier this month, the Bank of England announced that it expects the rate to fall to 4% by the end of the year. This will help both foreign exchange and costs in the UK. With people having more disposable income again, I am confident that our supporters will continue to give.

Typically, economies in the global north are more resilient and able bounce back from the kind of economic shocks we are currently experiencing. Unfortunately, the economies in our country programmes are more vulnerable to political, economic and climatic instability and historically fare much worse, taking longer to recover and indeed may find some effects permanent.

So, whilst I remain confident in Ripple Effect’s financial sustainability, it is clear that the countries where we work need our support more than ever. We know that 92,000 people are at risk of severe hunger, and that the impact of the current crisis will continue long after we are seeing it ease in the UK.

As Ripple Effect’s Country Director of Ethiopia, Aklilu Dogisso, says:

"When there is a global crisis, we can sometimes feel the urge to retreat into our small corners and forget about those in need around us. But at Ripple Effect we know that one small deed can go a long way, and that when we leave people to suffer alone those repercussions will come back to us too. We have a duty to act, even if what we have is only small. We can share it with those who have less.” - Aklilu Dogisso, Ripple Effect's Country Director of Ethiopia

Read Aklilu's blog to find out more about the situation in the countries we work in