Get ready to use your reserves, NGOs told

Get ready to use your reserves, NGOs told
Wednesday 1st June, 2005
POLLY HUI and QUINTON CHAN,South China Morning Post

Welfare groups will be eligible for funding to top up their wages for two more years, but after that they will have to "turn to their own pantry", the social welfare director has warned.

The funding proposal, to be discussed in the Legislative Council's panel on welfare services tomorrow, will see the existing "tide-over" grant replaced by one-off two-year grants that will total $826 million.

The five-year tide-over grants, which run out next March, were introduced when the administration began allocating resources to non-governmental organisations in a lump sum, based on the midpoint salaries of their staff, in an effort to wean them off government funding. Covering 163 NGOs and amounting to $1.47 billion between 2001 and 2006, the grants help NGOs pay staff who earn more than the midpoint level, which is determined by the number of employees and their grading.

"This is the best offer we can give," Social Welfare Director Paul Tang Kwok-wai told the South China Morning Post yesterday. "If the NGOs do not have enough money, they should go back to their reserves. In the same way, if people are hungry, they should turn to their pantry."

The welfare chief warned organisations against over-reliance on the government. "They should not just look at the government for money," he said, adding that they should instead improve communication with staff, create new services and look for other income sources. "If an organisation cannot balance its books after 10 years, then we really have to look into the problems of its operations."

The latest proposal consists of two options. Welfare groups that are not prepared for the cessation of the tide-over grants can apply for financial assistance for two more years, during which they will be required to undergo "organisation restructuring and service re-engineering" to achieve financial viability. But those ready for change will be given funds based on initiatives that will benefit staff, as well as priorities for new services.

Both options provide applicants with an amount capped at two years' worth of their tide-over grant for the current financial year.

Fernando Cheung Chiu-hung, the legislator representing welfare groups, said the new scheme would force NGOs to choose the second option to avoid being labelled as having operational problems.

"We believe over 50 per cent of the NGOs are having problems meeting their budget and fulfilling their obligation to pay their staff because of relatively large numbers of senior people. This means that they are doing well in retaining talented and experienced people. In that case, it is extremely unfair to punish them."