New year, New Budget!

by Dr Raymond Perrier · January 11, 2020

It’s January. You are feeling the aftermath of the excesses of Christmas, New Year, gift-buying, partying and summer holidays. Your pocket and bank account are probably feeling rather depleted. You are not the only one.

The shops — in an attempt to keep us buying things we don’t need with money we haven’t got — are having sales, trying to lure us back with the promise of discounts and offers and special deals.

And these days we cannot avoid this commercial onslaught by staying at home since Internet shopping means that we are never more than a few clicks away from spending money.

For many, it is even rougher since there are still new school uniforms and supplies to buy, and fees to pay.

January is clearly not a good time to be talking about money.

But for those of us running NGOs and parishes, it is a time when we have to think about money. Many of us who create formal budgets start them with the new year.

We look at what we are likely to spend money on in the 12 months ahead and where the income is going to come from to cover those expenses.

At the Denis Hurley Centre, we have just been through that budget-planning cycle. Each year we start with the basic question: What services will we be offering and at what level?

Our core activities—feeding the homeless and providing healthcare — continue because that is what we know we are good at and where there is urgent need.

In fact, the need gets bigger each year, and so does our response. In 2018, we served over 100000 meals to the homeless, a figure which has increased each year since we started. In 2019, we will have seen almost 30000 poor patients in our clinic, an increase of 11% on the previous year.

We then look at our other activities (like training, rehab, skills development) and assess what we can afford and importantly what we can implement cost-effectively.

An important test that we apply — and we would encourage all NGOs to do so — is not to duplicate what others are doing, especially if they do it well and efficiently. Our approach instead is to partner with other organisations from across the faith and NGO communities.

But even if every year we just did the same things and at the same level, our costs would still go up. That is for the same reasons that each us will see our domestic costs go up in the new year.

With inflation at 5%, all suppliers are seeking to increase prices. That of course becomes self-fulfilling: their suppliers increase prices and so they in turn have to increase theirs.

And some prices increase by more than that: in eThekwini, we are looking at a planned increase of 15% in utility bills this year.

One of the clearest ways of seeing this is in the price of fuel which has gone up 60% since we opened the DHC five years ago. That affects not just transportation costs but the costs of everything else.

Among the reasons for the increase in fuel prices is the decline in the value of the rand (7% in 2019). That in turn has a knock-on effect on the prices of anything which has an imported component.

I suspect I am not telling you anything you do not already know and which you already feel in the rands in your pocket. But just as you have to find more money to simply cover your basic costs, so do the NGOs you support and your local parish have the same pressure from increased costs.

At the DHC, we work really hard to keep our costs low. We have no choice but to absorb cost increases from utilities and other suppliers; we also increase staff rates each year at least in line with inflation (knowing that already they are paid less than what they’d earn in the private or public sector).

But I am proud to say that in 2019 we increased our services without increasing our overall costs; and that for 2020 we are again budgeting no overall increase in expenses. Each year we have found cost-savings and efficiencies to offset the cost increases that we cannot avoid.

But that still means we need to find almost R5 million in 2020 — or R13000 per day. And, like most NGOs and all churches, we get no cash help from government to provide these services. While most of us in the Church world benefit from lots of volunteers and donations of goods to help reduce the amount of cash we need, we still need to pay bills in real money—and that has to come from somewhere.

So even though this is a terrible time to raise this, can I on behalf of your parish and the NGOs you support, ask that you to think about increasing the amount that you give them?

If you believe that we are providing valuable services and doing God’s work — and we hope that you do — we need not just your continued support, but each year an increase in your financial commitment to what we do.

So now is a good time to look at the amount you give to your parish or chosen NGOs and ask yourself when you last increased that.

I may suggest that you get through the pain of January and set up the increase in your EFT to start in February. (And if you do not have these regular donations set up as an EFT, let me recommend it; it is much less painful than taking cash out of your wallet).

Of course, if you have not spent all your bonus, perhaps you can make a one-off donation before you do spend it.

Let me offer two extra motivations. If you are giving to an NGO and you do so before the end of February, you can reduce your tax bill for 2019/20.

The other motivation is a bit more spiritual. Remember Proverbs: “Whoever is generous to the poor lends to the LORD, and he will repay him for his deed” (17:9).