Inflation, the dropping dollar and finances

This may be a somewhat long one so if you're in a hurry feel free to scroll to the bottom for the gist and then reread the text later.

I debated posting on this subject lest it might be viewed as a criticism of Global Action but I finally decided that my readers are smart enough to read this post correctly and understand the spirit in which it is intended.  The entire stateside staff is dedicated to getting the word out, contacted potentially interested partners and just flat out busting their butts to keep vital programs going all over the world.  They are constantly fighting against the external factors discussed below that none of us can affect.

Since we have been here, finances have been alternately tight and downright dire.  There are many reasons for that which I won't really address (the financial issues in the US from whence the majority of our funding comes is a major one), but I thought it might be instructive to elaborate a little on the factors on our side of the world.  It can really be boiled down to inflation and currency exchange.

I'll do the latter first since it's the easiest.  When we first got here (and last summer when I came for camp) the exchange rate hovered right around 5.05 hrivna to the dollar.  This was pretty stable and didn't fluctuate very much.  Now it can float between 4.55 and 4.75 depending on the day and the bank.  That is a decrease in value of around 7-10%.  Think about how that affects an institution that is primarily funded in US dollars.  Without any change in the donation patterns of our very generous partners, we have in essence lost 7-10% of our funding.  I wish I could say that this was the more difficult of the 2....

Inflation.  Last year at this time gas was between 3 and 4 hrivna per liter (about 13 hrivna to the gallon) and right now it runs around 7 hrivna/liter (about 26.50 hrivna/gallon).  Tanya told us that a year ago bread was 1.20 hrivna/loaf and now its around 2.60.  Last year to schedule a marshrutka (Russian for minibus... learn the term people!)  from Kerch to Simferopol and back was around 600 hrivna and as of last week the price had skyrocketed to 1800 minimum.  The same price jump is true of in-town routes as well.  All of these represent annual inflation rates of around 100%.  We had similar increases in food, electricity and property taxes.    Obviously it isn't this pronounced across the market but it does represent staple items for daily life.

Here is where this gets brutal.  For us, both components combine to create some serious funding problems. If you take the example items above and mesh the two changes you get this:

Bread (in USD); bought in massive amounts during summer camps.

2007 - $0.24/loaf

2008 - $0.56/loaf

Gasoline

2007 - $2.57/gallon

2008 - $5.70/gallon

Public transport

Kerch-Simferopol-Kerch, full marshrutka

2007 - $120

2008 - $390

In-town routes, per person

2007 - $0.30

2008 - $0.65

Sadly, these don't just affect the HopeCenter and our project budget.  As we lose funding through a dropping exchange rate, we can't afford to give the necessary cost of living wage increases to our staff who must deal with the astronomical inflation.

Please pray for our folks here as some of the staff are looking at having to choose between the ministry they love and providing for their families.  

Also, I have resisted using this blog as a platform to raise funds but if we do not develop a larger base of dedicated donors (of any amount), our programs and staff will be seriously threatened.  At the top of the right hand column there is a link to the Global Action online donation page for those who are interested.