Falling loonie hurts work overseas
But no need to panic, say agencies
By
Debra Fieguth
ChristianWeek staff
Ouch. The Canadian dollar’s downhill slide is hurting organizations working overseas in relief and development and evangelism. But far from despairing, most agencies are taking the falling loonie in stride and hoping an improvement is just around the corner.
Canadian-based mission organizations generally operate in U.S. currency when they pay workers overseas, purchase equipment or fund projects. So when the loonie slipped below 64 cents U.S. last month, it meant far less purchasing power than when it was up at 70 or 72 cents.
For a large organization like World Vision Canada, the difference is huge. "For every penny the dollar goes down," explains information officer Philip Maher, "we lose $1 million." In other words, if WVC is planning to spend $80 million overseas, it now has to find $1 million extra every time the dollar dips.
"The way we cushion ourselves is we create a budget based on a very low Canadian dollar," says Maher. But even the experts Mississauga-based World Vision consulted with couldn’t predict a loonie as low as it fell this summer. The impact has not been felt yet, however, says Maher, because overseas projects are generally paid several months in advance.
"It’s difficult to plan for absolutely everything," comments financial advisor W. Paul Johnson of Campbell River, B.C. "It’s a matter of trying to have enough of a buffer if you need it."
Some overseas workers, he adds, are going to American donors for support, "because then they don’t have to worry about the fluctuations of the [Canadian] dollar."
Toronto-based SIM Canada, one of the largest sending agencies in the country, works on a pooling system with the U.S., explains treasurer Kathy Elias. "It means at this point we’re kind of dependent on them," she says. "In the long run, we’ll be asked to put more money in."
Sacrificial giving
Yet despite the fragile Canadian currency, many mission organizations are reluctant to seek additional help from donors. "It’s kind of hard, because many of our donors do give sacrificially to begin with," says Ken Reeve, director of administration for Far East Broadcasting Associates in Burnaby, B.C. "We have to make the needs known but we don’t want to come across as being too strident about it."
The situation "makes it more difficult for us to keep the same level of ministry," Reeves admits.
Blair Clark, director of resource development for Canadian Baptist Ministries in Mississauga, says Canadian donors are giving less because they feel they have less. For now, that means deferring some capital costs like buying vehicles, or buying second-hand instead of new.
"It does put us in a bind," says Clark. "In spite or our own struggle, in most of the countries we work in the people are suffering far more."
That’s the perspective Paul Carrick, director of Cause Canada in Canmore, Alberta, puts things in when he looks at what appears to be a shaky Canadian economy. "We’re hurt, so we have to work harder, but it isn’t the same as if a hurricane or typhoon wiped out a community," he says.
Carrick says Cause Canada tries to get people to "buy into" its development programs in Africa and Central America. For example, he expects donors to take ownership of a plan to provide clean water to 5,000 people in a village, and make their contributions accordingly.
Long-term vision
"We have to have a long-term vision of fundraising," he adds. "The only time we really scream crisis is when we have one."
For Emmanuel International, an agency involved in community development and spiritual outreach overseas, the impact affects workers in Sudan, Uganda and other countries where workers are receiving less money, says director of finance Leslie Schroder. Programs are also getting less money, but donations haven’t dropped, she says.
On the plus side, the Canadian-born organization has a United Kingdom affiliate that transfers funds to the Stouffville, Ontario office. "We’re getting more value for the money we’re getting from them."
Arnold Olver, Canadian director of Action International Ministries in Three Hills, Alberta, adds that devaluation of the currencies in other countries has helped balance the lower dollar. "We’re thankful at this moment," he says.
While most agencies appear to be taking a wait-and-see attitude before they approach donors for more money, some are also taking preventive measures to make sure the situation doesn’t get worse. "The first thing we do is look at things that don’t affect programs overseas," says WVC’s Maher. That might mean deferring purchase of a new computer in the home office so more dollars are available for development.
Compassion Canada, which approaches community development work through child sponsorship, raised its monthly sponsorship rates in July from $27 to $31. That, says Norm Irwin, vice-president, finance, for the London, Ontario-based organization, "has probably been our saving grace."
Still, the currency devaluation is affecting Compassion "quite drastically," says Irwin. With a reduced amount of money to send overseas, "every child shares equally in the shortfall," he says. "We can’t really go after more funds because we have raised our rates."
Most missionaries working for New Tribes Mission are feeling the pinch and likely will for some time, says administrator Peter Frayne of Durham, Ontario. "I don’t think we’ve by any means seen the full effect of the decline," he says.
But like other mission personnel, Frayne doesn’t want to look at the economy in purely monetary terms. "We’re not crying foul, because the Lord is able to supply in other ways," he points out.
