An update on ICRC’s financial situation
This Q&A was last updated on 23 May 2023 and was created to explain the reduction in ICRC's 2023 budget. It is no longer being updated and further financial updates will be provided as part of our 2024 budget and planning exercise as well as our annual report.
On 30 March 2023, ICRC's governing board approved a plan to reduce 430 million CHF in global costs over 2023 and early 2024. This was a difficult decision as the core ambition of our appeal to donors for 2.8 billion CHF in 2023 was to deliver roughly the same level of humanitarian services to communities as last year.
We count on and appreciate the support of our donors. With a revised overall budget of 2.4 billion CHF, we still need significant financial support this year to cover our humanitarian operations and enable us to be where we are most needed and make a difference in the lives of tens of millions of people.
The plan to reduce costs in 2023 is now being implemented both at headquarters and in delegations worldwide. While some of the details and timelines are still being worked through, the main changes to ICRC's operations globally include:
- Approximately 1,800 people worldwide will lose their jobs in the coming months. This figure does not include other staff members who may be impacted because fewer assignments will be available globally, and as a result of a recruitment freeze on some positions.
- 26 of our 350 locations around the world will close and others will be substantially reduced, where, for example, the area can be covered by another ICRC office, or where other humanitarian or development partners can take over. Our delegations in Mauritania, Malaysia, and Greece will close during the course of 2023 - 2024. In addition, our presence in Dakar, Nairobi, Amman, Bangkok, Panama City and another 21 locations will be significantly scaled back and we have also made programmatic reductions in areas such as direct cash assistance.
These changes reflect a stronger focus on the ICRC's core activities, such as programmes in hard-to-reach, frontline, and contested areas. It also includes efforts directly connected to our mandate to promote international humanitarian law and uphold the rights of people living through armed conflict.
Our priority is always to have the most effective, positive impact we can for communities living through armed conflict and violence.
What changed in our funding environment?
The ICRC has a proven and robust financial approach in the humanitarian sector in which we work to meet the humanitarian needs where they are, with donors funding our efforts in parallel and in conversation with us. It is not unusual for the ICRC to have its annual appeal not fully funded early in the year.
This year we are experiencing simultaneous challenges. First, several end-of-year pledges did not come through at the level we had anticipated. At the same time, our costs during the fourth quarter of 2022 were higher than anticipated partly because of inflation, even as our teams delivered a high rate of assistance and protection services to those in need. Because of these factors, we started 2023 carrying forward a deficit of approximately 140 million CHF.
At the same time, we operate in the same financial environment as the rest of the humanitarian sector and are therefore impacted by the same difficult global financial and economic trends. It is also proving increasingly challenging to raise unearmarked funds, which means that our work in many crisis situations is underfunded.
How do you calculate your annual appeal?
The ICRC's annual appeal represents the organisation's realistic ambition to address humanitarian needs around the world. It seeks to balance our demonstrated ability to deliver the support affected populations require with the financial constraints the ICRC and all humanitarian actors face. Our 2023 appeal of 2.8 billion CHF was our largest ever but only represented a 0.3% increase on what the ICRC carried out in 2022, including the scale-up of our programmes due to the escalation of the Russia-Ukraine international armed conflict. This modest increase concealed the hard decisions already made by the organization to absorb additional projected inflation costs of 160 million CHF this year.
How many people will no longer receive aid and support from the ICRC?
The expected changes will be reflected in the ICRC's revised annual appeal, which will be available in June
What will staff who lose their jobs be entitled to?
We will do as much as we can to help staff members who are impacted and are committed to put in place relevant social responsibility measures to mitigate the impact of job losses across the institution.
This article has been updated for clarity and accuracy.