International non-governmental organisations appear to be facing funding shortages in the wake of the Covid-19 pandemic.

Their funding commitment has declined substantially during the first eight months of the current fiscal year. This is the continuation of the trend observed in the last fiscal year 2019-20 when disbursement of funds by the international NGOs in the last fiscal year declined by nearly 39 percent, according to the Development Cooperation Report 2019-20 released by the Finance Ministry on Thursday.

According to the Social Welfare Council, it has approved a budget of Rs3.5 billion for 230 projects of international NGOs during the first eight months of the fiscal year compared to their budget approval of Rs12.19 billion for 240 projects during the same period last fiscal year.

According to officials at the council, based on the existing budget approval and the projects that are in the pipeline, it is difficult to match the expected total budget approval in the current fiscal year.

Based on the projects in the pipeline, the government had expected that international NGOs would spend Rs21.62 billion in the current fiscal year, according to a report titled “Statement of Technical Assistance and other Assistance 2020-21” published by the Finance Ministry before the start of the current fiscal year 2020-21.

But the council said it had expected the foreign NGOs to spend an annual budget of Rs18 billion this fiscal year.

“Based on this target, we expect to meet just over 70 percent of the target,” said Pushkar Khati, member secretary at the council.

In the last fiscal year 2019-20, the volume of disbursement from international NGOs’ core funding decreased by 38.8 percent over the past year, falling from $215.3 million in 2018-19 to $132.8 million in 2019-20, according to the Development Cooperation Report 2019-20.

“This decline may be as a result of fewer international NGOs reporting to the Aid Management Platform, a software for recording the foreign aid including that from foreign NGOs, which is a matter of great concern,” the report states.

But officials at the council and representatives of international NGOs point out a number of other factors contributing to the reduction in funding from the foreign NGOs, such as the impact of Covid-19.

“The impact of the Covid-19 on the sources of funding for international NGOs, as well as foreign NGOs entering Nepal to help post-earthquake recovery closing their operation affected the overall funding,” said Khati.

A number of foriegn NGOs that had entered Nepal for post-earthquake recovery have already folded their operation and some are preparing to leave after completing their tasks, according to the council.

The earthquake of 2015 had killed nearly 9,000 people and damaged properties worth $7 billion, according to the Post Disaster Needs Assessment report released after the quake.

Representatives of foreign NGOs blame, particularly the Covid-19 pandemic, for the drop in funding.

Janes Ginting, vice-chairperson of Association of International NGOs in Nepal, a grouping of foreign NGOs, told the Post that there was a declining trend of funding to international NGOs relying on public funding in donor countries.

“Many private donors or individuals that normally donate are facing an economic crisis in their countries, hence the cutback in funding,” he said.

Another factor he pointed out is that most foreign NGOs have less or even significantly less funding because most of international funding are directed to support vaccination programmes, either through the government or the United Nations agencies.

According to a report prepared by Averthur NGO Consulting, a UK based firm, in May 2020, income of the international NGOs originating in northern Europe was already declining since 2016 and the situation is likely to worsen due to Covid-19.

According to the report, individuals contributing to international NGOs were already declining while institutional grants and contract funding increased during the period from 2008-2015.

Except, the Médecins Sans Frontières (MSF)—also known as "Doctors Without Borders, international NGOS such as Save the Children, Acton Aid, Care, Oxfarm, the World Vision and Plan all were running with more institutional backing instead of individuals contributing to charity.

“The decline in institutional funding has suddenly got a lot harder with Covid,” it said.

The report further said that it would be pleasantly surprising if the need of many of the Western European states and the US to rebuild their economies and tackle the surge in government debt/deficits didn’t affect development cooperation budgets.

“Unfortunately, there is a strong likelihood that it will accelerate the decline,” the report said.

According to Ginting, who is also the national director for the World Vision International Nepal, the health budget of foreign NGOs is being diverted to fight Covid-19 leading to a decline in funding to other health issues.

“Funding for certain health programmes such as maternal and child nutrition, health system strengthening and water sanitation and hygiene (WASH) has declined due to funding stretch for Covid-19 vaccination,” he said.