Aid agencies' cut-throat cash battle

Richard Dowden, Diplomatic Editor, assesses the future facing the Disas ters Emergency Committee in Britain in the face of the escalating competition f or funding and publicity

The Rwanda appeal launched in April raised £36.2m, more than twice the previous record amount, but it has triggered a fierce battle between aid agencies over the ethics and techniques of fund-raising.

Overseas aid is no longer a world of sandalled volunteers and do-gooding amateurs. The aid world has become professional and the fund-raising as viciously competitive as any other business in the Nineties.

And it is big business. The top five aid agencies raise about £230m a year and the Government contributes a further £120m. The aid agencies which share these donations - or want a share of them - are locked in an increasingly bitter battle over fund-raising techniques.

So far, the battle has been behind closed doors because everyone in the business knows that bad publicity could cause a loss of public confidence and a collapse in charity revenues. The agencies co-operate reasonably well in the field and although mistakes are made and goods and money lost in confused and unpredictable catastrophes such as Somalia and Rwanda, most of the aid agencies spend the money well.

But raising the funds and the hunt for the publicity which drives fund-raising have set aid agencies at each others' throats. Rwanda this year turned into a mad scramble for publicity as aid agencies begged journalists to visit their projects, gave them

free plane tickets, put up attractive young females to represent them on television and plastered huge areas of refugee camps with their logos in the hope of a flickering split-second of publicity. Aid workers actually involved in the horrors of the camps were appalled.

The change in attitude is illustrated by the Red Cross. Only a few years ago its workers were forbidden to talk to newspapers, let alone help them. Recently, I received two letters from the Red Cross pointing out that it works in disaster areas and war zones and offering me free transport to them.

The scramble for Rwanda money has created a row which had been simmering for some time. In tight-lipped private conversations the sneers have been flying back and forth. Experienced ``old money'' agencies accuse the newcomers of being cowboys and car salesmen. The new-style operators accuse the older of taking the money but not being in the frontline. One aid agency director was described as "the Jonas Chuzzlewit of the aid business".

More seriously, the dispute threatens the agreement under which the aid agencies have raised public funds for nearly 30 years. Since 1966, when it launched an appeal for the victims of the Turkish earthquake, the Disasters Emergency Committee has raised millions of pounds, through public appeals, for disaster victims.

The DEC is made up of the seven big British aid agencies: Oxfam, Save the Children, the British Red Cross, Cafod, Christian Aid, Help the Aged and Action Aid. Among other qualifications, the members have to raise £5.4m directly from the British public. When a disaster occurs they call the BBC and ITN, who check it through their own journalists. An appeal is then launched after the Nine O'Clock News and News at Ten, adverts are placed in newspapers, and donations are channelled free of charge through British Telecom, Post Office Giro and the banks. The funds are then divided among agencies with projects in the disaster area.

The records of these agencies give the DEC a gold-plated reputation. Recently, however, it has run into two problems. The first is within its own ranks. The DEC rules do not allow individual agencies to run appeals for a month after the main television appeal. This rule was flouted by the Red Cross, which ran its own appeal during the Rwanda crisis and raised £8.1m. But it received little over £1m from the DEC appeal.

Oxfam has also run an appeal at the same time as the DEC's and other agencies have been accused of blatantly poaching funds in each others' constituencies. As part of a peace treaty, the ban on individual fund-raising is expected to be lowered from four to two weeks.

The second problem is the attempt by outsiders to break into the lucrative British aid pool. For three years now Care, which has its roots in America, has applied to join the DEC but has been turned down on the ground that it does not have a constituencyto raise £5m here. Some agencies are also suspicious of Care, which specialises in rapid delivery of relief supplies and food aid and believes in getting there quickly. This makes it a natural target for the television cameras.

It has also brought on to its British board several heavyweights from the ranks of the great and good, including Sir Peter Preston, a former permanent secretary of the Overseas Development Administration. This links Care into the most lucrative source offunds: the British government. Care received £9.8m of ODA money last year.

Baroness Chalker, the Overseas Aid minister, has also tried to force the other aid agencies to allow Care on to the DEC. Eventually it was given co-opted status for the Rwanda appeal six months after it was launched, but Charles Tapp, the director, now says Care is not interested in joining the DEC.

If Care and the Red Cross learn that more money is to be made outside the DEC, the danger is that other members will leave, and the DEC will break up. The danger then is that fund-raising, not relief work, will drive the aid agencies' choices in an increasingly frantic competition for funds. Actions will be taken not on the basis of whether they will save lives, but whether they will look good on television. Non-telegenic disasters will be ignored and the follow-up, the vital part that turns relief workinto self-sustaining recovery, will be abandoned.

The DEC meets on 19 January to finalise new rules about fund-raising and co-operation,in the knowledge that one piece of bad publicity will ruin the business. They have strong competitors. Medecins Sans Frontieres launches its UK branch in the spring with a fund-raising appeal. MSF's frontline activities have made it a household name in Britain. It will have no difficulty raising the £5m qualification to join the DEC. But does it need to? A spokesman said no decision had been taken yet.