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How the Red Cross Raised Half a Billion Dollars For Haiti and Built 6 Homes

Posted by Soulskill on from the bad-work-if-you-can-get-it dept.

An anonymous reader points out an investigation from NPR and Propublica into how the Red Cross spent the $500 million in relief funds they gathered to help Haiti after the country was devastated by an earthquake in 2010. They found "a string of poorly managed projects, questionable spending and dubious claims of success." While the organization claims to have built homes for 130,000 people, investigators only found six permanent homes they could attribute to the charity. The Red Cross admitted afterward that the 130,000 number included people who had attended a seminar on how to fix their own homes.

"Lacking the expertise to mount its own projects, the Red Cross ended up giving much of the money to other groups to do the work. Those groups took out a piece of every dollar to cover overhead and management. Even on the projects done by others, the Red Cross had its own significant expenses – in one case, adding up to a third of the project’s budget." The Red Cross raised far more money for Haiti than any other charity, but is unwilling to provide details on where the money went. In one case, a brochure that extolled the virtues of one project claimed $24 million had been spent on a particular area — but residents of that area haven't seen any improvement in living conditions, and are unable to get information from the Red Cross. The former director of the Red Cross's shelter program said charity officials had no idea how to spend the money they'd accumulated.

22 of 235 comments (clear)

  1. They throw money at shit they don't need... by kiphat · · Score: 5, Insightful

    Having witnessed first hand how the Red Cross spends its money on IT infrastructure it doesn't need, I refuse to give them a single dime.

    1. Re:They throw money at shit they don't need... by ErikTheRed · · Score: 5, Interesting

      Having witnessed first hand how the Red Cross spends its money on IT infrastructure it doesn't need, I refuse to give them a single dime.

      This! I've seen this in other large "non-profits" as well. It's like they don't even know how to do more with less (I own two businesses and could speak volumes on the subject) - they just declare that they "need" more money, fundraise, and then blow it out the way their high-priced consultants tell them to. I don't think they're necessarily evil, but they are run by people whose good intentions far outweigh their management skills (to be charitable, pun intended).

      --

      Help save the critically endangered Blue Iguana
    2. Re:They throw money at shit they don't need... by Anonymous Coward · · Score: 5, Informative

      Though not about the Red Cross, I have two anecdotes about Haiti relief efforts. A 20 year old friend of mine wanted to help so he signed up with a charitable organization to travel to Haiti and help. He used all of his savings to pay for plane tickets, housing, meals, and to donate to the program. He also did it using his 2 week vacation time for the year. They were assigned to teams of about 10 each of college aged Americans. They were given shovels, rakes, and wheel barrows and told to clean up the destroyed shanties. They worked morning until night while the locals watched them. Each week part of the group left and a new group arrived. Some stayed for one week, some for two, others for 2 months. This was going to be a year long project or more to clean the ruined shanties from the valley and hillside. A bulldozer and backhoe could have done it in a month or less, then they could begin rebuilding. The big question is why were the locals that would benefit from all this work not helping? They just stood around and watched. This was unskilled labor anyone could do it.
      The other is our local university has a charitable student org that was also getting students to self pay to go help "Rebuild Haiti". All they ended up doing was teaching English.
      Waste, waste, everywhere.

    3. Re:They throw money at shit they don't need... by ShanghaiBill · · Score: 5, Insightful

      All they ended up doing was teaching English. Waste, waste, everywhere.

      How is teaching English a waste? Haitians speak a creole, that is unintelligible to even standard French speakers. This isolates them from the world economy, and is part of the reason they have 15% of the per capita GDP as the neighboring Dominican Republic, where standard Spanish is spoken. English lessons should be very useful.

    4. Re:They throw money at shit they don't need... by Applehu+Akbar · · Score: 3, Informative

      Something similar just happened in Nepal. The UK raised a huge food and materials drive that positioned hundreds of tone of relief supplies at a military base in Yorkshire, ready to be sent in. It's still all sitting there. Apparently Nepal wants to charge customs duty of 30% on all the relief supplies that are coming into the country.

  2. Debunked already. by Anonymous Coward · · Score: 5, Informative

    This has already been debunked on skeptics stackexchange http://skeptics.stackexchange....

    1. Re:Debunked already. by amicusNYCL · · Score: 4, Informative

      I wouldn't call that "debunked". People are certainly throwing around the $500 million number assuming that all went to housing, which is not correct (only about $100 million did), but the Red Cross still failed at their own stated goals, and their lawyers refuse to provide any accurate accounting of where the money went beyond lumping large sums into large buckets (e.g., $24 million went into development of Campeche). The Haitians living in Campeche are equally curious about where the money went, because they haven't seen much done beyond some sidewalks and a wall painted with the Red Cross logo. The Red Cross specifically said they were going to build hundreds of homes and rebuild entire neighborhoods, and they've done neither. Even though it's true that they did not budget $500 million to that single effort, they still have failed to accomplish what they said they were going to do, and they have still failed to account for where that money went.

      --
      "Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
    2. Re:Debunked already. by PRMan · · Score: 3, Informative

      Not when they claim that a large portion of the $500 million they raised was spent on building houses.

      --
      Peter predicted that you would "deliberately forget" creation 2000 years ago...
  3. Not donating to private charities is easy by mi · · Score: 4, Insightful

    That's the advantage of benevolence based on private charities — the mismanaged ones lose donations and disappear. I too stopped donating to Red Cross long ago — my charity money goes to the IRC.

    I refuse to give them a single dime.

    Try that attitude with public charities — financed by monies taken from you and me at gunpoint (taxes)... Whatever you may feel about their goals and methods, you can not simply stop paying them — your only recourse is to raise awareness hoping for the eventual healing to begin.

    Oh, and they are unconstitutional too, but that stopped bothering anybody long ago.

    --
    In Soviet Washington the swamp drains you.
    1. Re:Not donating to private charities is easy by kenj123 · · Score: 5, Insightful

      you could move to a paradise country with no taxes. I think Somalia doesn't have a national tax.

    2. Re: Not donating to private charities is easy by thesupraman · · Score: 4, Insightful

      No.. He was quite clearly attacking the idea of taxes as a source of charity and wealth redistribution.. Not all taxes.
      If you cannot see the difference then you have no place in any discussion about taxes.. Except as an example of the problem.
      The point is very clearly that poorly run private charity is easily fixed (move your donations). Publicly run charity is next to impossible to fix and rapidly devices into a self serving politically motivated disaster.

    3. Re:Not donating to private charities is easy by Anonymous Coward · · Score: 5, Interesting

      you could move to a paradise country with no taxes. I think Somalia doesn't have a national tax.

      And you could move to north korea, where the government knows what's good for you.

      Sure, and if you drink too little water you die and if you drink too much water you die - so therefore it's impossible to drink a healthy amount of water.

      The interesting thing to me is that there are also countries where people have it pretty good. And it's not just about race, culture, religion, etc.. For example, there are huge differences between North and South Korea.

      In the countries at the top of the world happiness report (e.g. the Scandinavian socialist countries), an ordinary person can have a secure comfortable life even if they make the occasional mistake, have a nice work/life balance, and aren't particularly smart or lucky. On the other hand, in the countries at the bottom of the list, even people who don't make any major mistakes in their lives, and work really hard and are even quite smart - are often still trapped in insecure lives without basic necessities.

      Now, I'm not necessarily in favor direct wealth or income redistribution (taking tax money from rich people and giving it directly to poor people to spend however they like). But there are a lot of indirect things that governments can do - that really do work to insure that ordinary people have secure comfortable lives. Some things are even a bit outside the box - such as functioning as an employer of last resort during major recessions and depressions.

      Anyway, I'm not an expert but, for Slashdotters who are genuinely concerned about inequality, there's a really good YouTube video of a discussion with Paul Krugman and Robert Solo that's quite inspiring.

    4. Re:Not donating to private charities is easy by nbauman · · Score: 4, Interesting

      Another good one is MSF (Doctors Without Borders).

      http://www.doctorswithoutborde...

      Yes, and as the original Pro Publica article said, MSF collected money for Haitian operations, and then told people not to send any more money because they had enough money. They don't need money. Their main need is for competent personnel. When a crisis hits, MSF is swamped with volunteers, and they have to separate the competent volunteers with experience in crisis work, from the well-meaning inexperienced volunteers who will just create more problems.

      When's the last time you heard a charity say they had enough money?

      The Red Cross OTOH had meetings where the executives referred to it as a great fund-raising opportunity.

      The Red Cross is a parking lot for incompetent, ideologically biased political appointees, like Elizabeth Dole, who among other things edited the AIDS education manuals to eliminate anything that would offend the Christian right, like homosexuality. http://www.thenation.com/artic... http://www.nytimes.com/1996/05...

      OTOH, the staff below them includes a lot of dedicated, competent people, which is why they're always blowing the whistle to the press.

  4. Re:Haiti government by frovingslosh · · Score: 5, Funny

    Absolutely. they could have built more than 6 homes for Haiti government officials with it, and very nice homes too.

    --
    I'm an American. I love this country and the freedoms that we used to have.
  5. Local charity by vivaoporto · · Score: 5, Insightful

    This and many other examples like

    - PETA euthanizing more animals than they shelter
    - UNICEF expenses of 52 million dollars (pdf) in expenses related to management and fundraising (out of a 600 million dollars budget, and that's one of the best managed ones out there)

    show that it is much more efficient to donate time or money locally instead of to big organizations.

    Donate to your local food bank, soup kitchen, volunteer some time in the retirement home, the satisfaction will be the same and the effects will be much more efficient. Or, at the very least, don't screw people over, it is more than enough if you can do that.

    Why should you donate anything to help someone in the other side of the world while people needs your help in your own neighbourhood?

    1. Re:Local charity by grcumb · · Score: 5, Informative

      - UNICEF expenses of 52 million dollars (pdf) [unicefusa.org] in expenses related to management and fundraising (out of a 600 million dollars budget, and that's one of the best managed ones out there)

      (I'm not even going to comment on PETA because they have jack shit to do with the current conversation.)

      You are actually complaining about an administrative overhead of 9%? Seriously?

      For comparison, Apple's OPEX was a little over 25% of revenues as of March 2015. Google's was a little less than 25%. Microsoft's was 22%

      These are all operations that have significant global logistical operations, and involve a combination of scale and skill in their day-to-day operations.

      I assisted UNICEF (as a local 'fixer') with their operations when cyclone Pam hit Vanuatu. (See here for a blow-by-blow account.) It is emphatically true that costs are very high in the immediate aftermath of a disaster. Spending time nickle-and-diming over expenses can cost lives. We needed phones, cars, room to work (their local HQ was damaged), food and water, and sufficient staff and infrastructure to move hundreds of tonnes of food and supplies at a time.

      For the record: The Red Cross and UNICEF were the first organisations to deliver emergency supplies, because they had the foresight to pre-position materials and equipment in-country prior to the disaster. That was money well-spent.

      And yet... and yet the biggest problem we faced was middle management second-guessing the people at the operational level, failing to support them because of the expenses they were incurring. And this fear continues to permeate precisely because of stories like this.

      Let's be perfectly clear: It was the AMERICAN Red Cross that screwed up so royally here. Not the International Red Cross, which provides unique and necessary services throughout the world.

      You wouldn't tar every single technology company with the same brush as games maker Electronic Arts (who really do deserve their own special circle in Hell). So why, when one NGO manages their way to disaster, does giving to charities suddenly become unwise?

      I have witnessed—up close and in more detail than anyone could ever want—the effects of disaster. I'm still working to document the many successes and failures of cyclone Pam. And I will say without hesitation that the mantra here in Vanuatu was 'we will not be another Haiti'. Haiti really was a clusterfuck from start to finish, mostly because of the local government's inability to control and coordinate the response. In Vanuatu, government officials stayed on the front foot, and were unafraid to take NGOs to task when they first refused to cooperate.

      People need to be reminded: Disaster zones are shitty places to work. They are in fact some of the worst places in the world. And on top of this there are indeed thousand-dollar-a-day careerists who descend on them as a matter of course. But for every one person like that, there are hundreds of dedicated professionals who have devoted themselves simply to helping out. Many of them work on a purely voluntary basis. Mistakes get made every day, for countless reasons, but not least because in a post-disaster situation, you're working with whatever information you've been able to gather by word of mouth; you've got virtually no means to coordinate your efforts, and you cannot know what the worst-affected areas look like until you go there yourself. On top of all that, you're working as much as 20 hours a day, resting for maybe 10-15 minutes at most, and eating whenever someone stuffs an emergency ration into your hand.

      Not to put too fine a point on it, It's really fucking hard.

      So yes, rag all you like on the American Red Cross.

      --
      Crumb's Corollary: Never bring a knife to a bun fight.
  6. I am shocked, shocked. by Just+Some+Guy · · Score: 4, Interesting

    In my hometown, Red Cross kept raising the rates they charged to local hospitals for donated blood. Eventually it became so expensive that a local coalition founded their own blood bank and began distributing blood products for much lower prices.

    I don't begrudge the Red Cross selling donated blood. Supplies, equipment, refrigeration, etc. all cost a lot of money and even a 100% volunteer organization can't wave that stuff away. I begrudge them charging so much that another, much smaller group without the same national recognition or economies of scale can set up a parallel system offering the same services for far less money.

    --
    Dewey, what part of this looks like authorities should be involved?
  7. Re:Haiti Money went through the Clinton Foundation by sheetsda · · Score: 4, Insightful

    This is the woman people want for president

    Here in the USA we do not have the luxury of voting for the person we want for president. We have to vote against the person that we don't want to be president.

    See also

  8. Re:Haiti Money went through the Clinton Foundation by amicusNYCL · · Score: 5, Informative

    I don't have any love for Hillary Clinton, but before I accept your claim that she is the personification of evil, do you mind providing a source for any of the claims you're making there?

    I was watching an interview

    What interview?

    with this minister

    Which minister?

    there is nothing to show for it but a couple projects that were photo ops

    Do you really believe that? Over 9,000 homes were built, at a minimum, not to mention consumables like food and water, as well as temporary shelters, repairs to existing structures, and money for rent.

    This is the woman people want for president

    Are you trying to say that she personally approves or disapproves of all Clinton Foundation work in Haiti, which in turn somehow oversees all international efforts? That everything that happens is traced to Hillary personally? Her husband founded the thing, that's why it was originally called the William J. Clinton Foundation. Hillary joined the thing in 2013 (which is several years after the 2010 earthquake, in case you're curious), and she said she was going to work on issues concerning women, small children, and economic development.

    Or, is this what you wanted to talk about:

    The 26-member international Interim Haiti Reconstruction Commission, headed by Bill Clinton and Haitian Prime Minister Jean-Max Bellerive, convened in June 2010. That committee is overseeing the US$5.3 billion pledged internationally for the first two years of Haiti's reconstruction.

    The commission was critiqued by Haitian groups for lacking Haitian civil society representation and accountability mechanisms. Half the representation on the commission was given to foreigners who effectively bought their seats by pledging certain amounts of money. An international development consultant contracted by the commission was quoted as saying, "Look, you have to realize the IHRC [commission] was not intended to work as a structure or entity for Haiti or Haitians. It was simply designed as a vehicle for donors to funnel multinationals' and NGOs' project contracts."

    Because, for a minute there, you sounded like just another political idiot taking any opportunity to bash whoever you don't like. But surely that's not the case, right?

    --
    "Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
  9. Don't give money to big charities by Karmashock · · Score: 3, Interesting

    ... And don't give to any charity unless you can audit to some extent how the money is spent.

    The waste in these things is beyond unethical. Huge salaries for management, lots of money funneled to things that have NOTHING to do with what they raised the money for...

    The Red Cross pocketed most of that money. In their minds they need that money for their other good works. So tehy show up at a disaster say "oh look at teh poor people, give to the red cross to help them"... and then basically just put all that money into their general fund.

    There's no compartmentalization. So money donated to help Haitians could actually go almost anywhere... including the CEO's yacht/hooker/cocaine fund.

    --
    I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
    1. Re:Don't give money to big charities by koick · · Score: 3, Interesting

      A great, objective resource is charitynavigator.org. Only give to charities with a 4 rating.

  10. Re:Ask a Vet by Gim+Tom · · Score: 4, Informative

    In my case it was when I was trying to get home from South East Asia on emergency leave after my mom had a cerebral hemorrhage with a poor prognosis for survival. I landed at Travis AFB near San Francisco after being awake for most of 3 days travel with only a little cash, but a good balance in a Bank America checking account and the Red Cross at Travis said it would take them 3 or 4 days to get an ok to cash one of my checks. I gambled my last cash on a bus ride to San Francisco International Airport and fortunately Delta was happy to take my check for a ticket and I got home in time to see my mom in the hospital. That is my personal experience, I have heard GI's tell of much worse.