In Search of the Red Cross' $500M in Haiti Relief

The biggest revelation to me in that article, which I feel should be highlighted more, is that the Red Cross provides almost zero information about how it spends its money.

It refuses to provide more than very vague information about how the money was spent in Haiti (information like "35% of $488 million on shelters"), with no specific details about what projects they spent the money on, how those projects went etc.

When the author challenged the general counsel of the Red Cross to provide more detailed information ("because clearly you must have it") he just gave her some evasive boilerplate spiel about having provided the summary information he'd provided already.

How can anyone donate to a charity that's so stunningly opaque about how it spends its money?

I stopped giving to 'big charities' twenty years ago and since then have only helped people locally where I can see what happens to the money. That's a real pity because of course on a relative scale those are probably much less in need than the people in Haiti (and Nepal and other areas devastated by natural disasters). But the red cross - once a paragon of virtue - and a number of other big time charities that were very successful at raising capital but extremely poor at spending it well - if at all - except on themselves are directly to blame for this and I'm pretty sure that I'm not the only person that feels that way.

They'll never get another cent out of me until at least one of their large scale disaster responses works out well. If they can't spend a few million in a direct, useful and efficient way then I don't see how they could spend orders of magnitude more.

Governments are similarly inept at spending their money efficiently (well, maybe not quite this inept but there is plenty of incompetence there too), but we can't avoid paying into the tax coffers and where applicable we do get roads, healthcare, education, national defence, a police force and social security in return.

Because of the total lack of end-to-end accountability with organizations like the red cross and others like it there is nothing to stop them from squandering what they rake in. It would be a lot more efficient to mail an envelope with cash to a random address in a disaster area than it is to expect these organizations to make a go of it. They really ought to be ashamed of themselves rather than belligerently defensive such as illustrated in the article.

Security situation indeed, I think he meant 'job security'.

My wife and I worked in some Red Cross shelters in Lake Charles, LA in the immediate aftermath of Katrina. I wrote a bit about what I was doing here: http://arstechnica.com/security/2005/10/disaster-livecd/

My take-away from that is that I would never, ever donate a dime to that organization. The people in the local chapters who were the first to respond immediately after the disaster were fantastic. But when the national org eventually came in (and brought layers of on-site bureaucracy with them) it was a train wreck, and they started throwing their weight around cluelessly and got in the way of everyone and everything. If the full-time, paid staff of the Red Cross had just left things entirely in the hands of the local volunteers and had stayed out of the area entirely, things would have gone much more smoothly.

Private companies did so much more than many of the relief orgs. Sprint, for instance, gave us free event phones for the shelter residents to use to try to contact family. No worries about billing, or even if they'd get the phones back. Home Depot's efforts in the aftermath have been well-documented. And I believe it was IBM (my memory may be faulty) who donated thousands in computer equipment to the shelters where I was working, which the shelter residents used to track down friends and family who they'd been separated from by the storm.

I don't know if I'll ever have another experience like talking to some lower-level person at a big company, telling them that I'm there from a Katrina shelter where I just showed up to volunteer and have no formal association with any org, then immediately being escalated all the way up the chain to someone who makes decisions and that person says, "just tell us what you need from us and we'll do it. Don't worry about any cost or billing issues. Tell us what and when and where." That was awesome.

It was also a stark contrast, to be totally empowered by the likes of Sprint and IBM on the one hand, and then ignored and pushed aside by the Red Cross on the other. Pretty crazy.

The Salvation Army was maybe the one aid org that had their act together. Red Cross national staff and FEMA were worthless. Anyway, I regret that I didn't write all this down after it happened. Between my wife and I there's a great book -- or at least a really long magazine article -- in there somewhere.

There is a good analysis of this on skeptics stackexchange.

http://skeptics.stackexchange.com/questions/27927/has-the-re...

>TLDR: The article has accidentally or deliberately confused the earthquake relief project with the much smaller neighborhood renewal project, and attacked them both for not doing things they weren't intended to do. The Red Cross did much more in Haiti than build six houses.

TL;DR (the informational bits):

> First the Red Cross took a customary administrative cut, then the charities that received the money took their own fees. And then, according to the Red Cross' records, the charity took out an additional amount to pay for what it calls the "program costs incurred in managing" these third-party projects.

> In one of the programs reviewed by NPR and ProPublica, these costs ate up a third of the money that was supposed to help Haitians.

[...]

> said that a fifth of the money the charity raised would go to "provide tens of thousands of people with permanent homes ... where we develop brand-new communities ... including water and sanitation."

> The charity built six permanent homes and, according to their own account, no new communities.

[...]

> the project manager [...] was entitled to allowances for housing, food and other expenses, home leave trips, R&R four times a year, and relocation expenses. In all, including salary, it added up to $140,000.

---

These are the only factual bits I can find. I'm not saying the rest is untrue, but they include statements from locals who "cannot see that $24 million has been spent here," whatever that means.

Another example is where it says "first, the plan was to build houses," then going on to describe that people are still living in tents. But how many people live in tents? What percentage? How many houses were actually built? Or did they build 10 villas and leave the rest in tents? There is no real information that I can find.

A bit further on, it does include this:

> The original plan was to build 700 new homes with living rooms and bathrooms. The Red Cross says it ran into problems acquiring land rights.

... so then out of the 700, how many were built? It doesn't say anything about that.

We could fund 83,000 homes in Haiti with $500,000,000.

We're Newstorycharity.org - a current YC nonprofit working in Haiti to crowdfund homes - 100% of public donations go to home construction - donors see exactly who they give to before they donate and a video of the EXACT family they funded in their new home after

We're launching a summer campaign "100 Homes in 100 Days" [newstorycharity.org/100] in Haiti, and would love for the support of this community in showing how the future of philanthropy is built on transparency and technology.

This organization is doing good work in Haiti, check it out: http://mohhaiti.org/

They get a stellar rating; to my recollection, 96% of donated funds go to the cause (4% overhead).

They're an overtly Christian organization, which may or may not be your thing. But they're doing good work.

Disclaimer: A company I worked for did some work for them a couple of years ago. I'm no longer affiliated in any way.

$500M sound like a large sum. It is if that is you personal wealth. However for Haiti with a population of over 10M it is only $50 per head.

According to the article the Red Cross built shelters for 130,000 people. The would be $384 per shelter if that was all the Red Cross did. But they also fed people, provided clean water, medical aid...

It is easy to attack big charities. You get support from people who feel guilty for being mean bastards, for people who don't like foreign organisations, from big business who want to profit out of natural disasters...

NPR is targeting ARC, but this is actually a bigger, more difficult problem for the charity industry than one organization not disclosing where it spends its money.

I used to work for a large ($500 million+ annual revenue) NGO fundraising department, both in major gifts and direct response marketing (digital), and I have colleagues who now work for similar organizations (including ARC). We would all tell you that most organizations, even (maybe especially) the largest ones, are absolutely horrible at having any idea whatsoever of the impact of their programs. Even worse, the leadership in these organizations are ambivalent at best at assessing the impact.

Why? Because organizations simply don't have much, if any, incentive to do so. And perhaps more shocking to me, the vast majority of donors don't care. Most people are content to give and reap the warm/fuzzy feeling they get, then not think about it again until year end when taxes are due. Simply put, most people treat giving like buying a product at the store: they hand over money in exchange for the warm and fuzzies. Transaction over.

The people who actually demand some sort of accountability are a minority who are often treated as anti-charity, as in, "Why would we spend money on assessing impact when we can spend that money helping more people?". The result are token 'watch dog' groups like Charity Navigator that latch on to red herrings like 'efficiency' ratings which non-profits have learned to manipulate to the point that they are functionally useless.

ARC is simply the product of a rotten system, and it is far from the only one. If you want to help cure this sickness, only give to organizations that can demonstrate the impact your dollars are having on the cause you care about. Ignore the so-called efficiency splits that say charity Y gives z% of your dollars to programs. These are accounting shenanigans, and nothing more

Sadly this kind of mismanagement and questionable decision-making isn't new [1] [2] [3].

It really seems like a lot of big charities are simply in the business of raising money rather than helping people. One wonders how that money is actually spent.

It seems very much like good local charities are a far better conduit for charitable gifts.

[1] http://en.m.wikipedia.org/wiki/American_Red_Cross#September_...

[2] http://www.cbsnews.com/news/red-faces-at-the-red-cross/

[3] http://usatoday30.usatoday.com/news/nation/2005-09-28-katrin...

Just think the impact that would have had if it had been divided up and given directly to each Haitian adult. The adult population of Haiti is roughly 6 million, so we're talking about almost $100 per adult Haitian. Roughly, it's about 1/8 of the per capita GDP of Haiti.

Imagine what you could if you were a poor American and received 1/8 of the American per capita GDP after a disaster (~6000 USD). That's a new roof, or a replacement vehicle, etc.

It's not life changing, but it would have been very significant, and massive in scale.

For those wanting to help, I highly recommend Givewell[1]. I imagine many of HN readers are (were) also lesswrong readers. This article[2] gives you some insight how Givewell evaluates organizations that they support.

[1] http://www.givewell.org/

[2] http://lesswrong.com/lw/cbs/thoughts_on_the_singularity_inst...

I've spent years working in sub-Saharan Africa with defense, security, oil firms etc. and have spent a fair amount of time interacting with non-profit, NGO, microfinance orgs. Not only do they operate with the weakest of reporting requirements, taxation burdens and investigatory/compliance statutes, but the people they employ are usually doing so out of a desire to help people, often taking seriously sub-standard salaries for similar work. So the top brass at these orgs are killing it and raking in money, while most of the grunt work is done by hapless bleeding hearts who are seriously underpaid for the work they do. It's a win at both ends for management.

Here is the Red Cross's response, http://www.redcross.org/news/press-release/13-Facts-about-th...

I just finished reading The Big Truck That Went By [1] by Jonathan Katz. It's an amazing account on what happened after the earthquake has hit and why most development help didn't have the impact we had hoped for.

One of the reason he touches is that emergency relief groups like the Red Cross (and other, e.g. MSF) aren't setup to do the nation-building Haiti actually needed, but for more rapid and short term support as is needed in war zones, refugee camps or rural disaster areas (tents, water, food etc.).

I can only recommend the book. I found it through his article on the NYTimes [2] which touches most points.

Most embarrassing for a journalist, they were wrong in ways that would have immediately been made clear had we taken the time to ask some basic questions.

Food and water, for example. When I was in Haiti two years later, to research the relief effort for a book, I was shocked to discover that no one could tell me with any precision if there was ever a food or water shortage in the first place. No one among the responders had even contacted the Coordination Nationale de la Sécurité Alimentaire — the Haitian government agency overseeing food security — to find out what might be needed. Indeed, earthquakes tend to inflict the worst damage on cities, not farms — especially in countries that already have limited infrastructure — and Haiti’s urban areas didn’t have any sewers or piped drinking water to begin with.

People indeed lost their homes and incomes, and markets closed. But the World Food Program had enough supplies in its Port-au-Prince warehouses — which survived the quake — to feed 300,000 people one full meal for three weeks. There was no acute food or malnutrition crisis after the quake; that much we know. But it seems very likely that the city could have avoided one even without the frenzied aid push.

[1] http://www.amazon.com/The-Big-Truck-That-Went-ebook/dp/B009O...

[2] http://www.nytimes.com/2015/04/28/magazine/how-not-to-report...

My antecdote about corruption in Haiti.

Went to a friend's wedding in 2007. One of the guests worked at CIDA (Canadian International Development Agency). I asked the guest as many questions as I could. There was a preliminary research trip before a Canadian official made her visit to Haiti. The purpose? To geolocate and photograph the facilities. And when I say facilities, think toilets. Making sure the white Canadian could poo-poo comfortably counted as aid.

Sure Haiti is incredibly corrupt, I remember that one of the ex-president's (Not Aristide) was head of the local kidnapping ring in Port Au Prince. But that's just small stuff. America and Canada use Haiti like it's their own toilet and want it to remain that way, in spite of the intentions of a select few and the limited posturing to the contrary.

One of the most disturbing things for me is to look at Hispaniola on Google Maps. The Dominican Replublic is lush and green. Haiti is a greyed out ####-hole.

I could go on and on, but reading up on an actual humanitarian in the region, Dr Paul Farmer, and his publications is a good start: https://en.wikipedia.org/wiki/Paul_Farmer

At the end of the story, they mentioned that local Haitian organizations were building lots of homes. It was also mentioned that there is lots of money still unspent. It seems that the Red Cross (or the US Gov) just needs to fund those organizations with a proven track record.

Sometimes I think news organizations are (unintentionally) exacerbating the root cause of these problems. They report on incompetence but don't report on how the public can fix it. I don't think the Red Cross will fix it without public pressure. It leaves the audience with a sense of helplessness that leads to cynicism and apathy. It would be better to end the story with suggestions on how the average citizen can fix these issues.

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VICE on HBO did a good piece on the failure of USAID in Haiti: https://nonprofitquarterly.org/policysocial-context/26018-hb...

I'm building an app that utilizes people giving to charities - red cross seemed like an obvious choice to include, but now there's no way.

This has been helpful in sleuthing out reputable charities: http://www.charitynavigator.org/

Wow .. could their PR be any more defensive?

NPR and ProPublica were "creating ill will in the community, which may give rise to a security incident," the email says. "We will hold you and your news organizations fully responsible."

No security incident happened — but residents did ask if they could keep the brochure.

OH man this infuriates me. I’ve spent time volunteering in two different locations (Bolivia and Haiti), both were great experiences for me, but I only feel that my time in Bolivia really benifited the people there in the long term.

I spent about three months on the ground in Haiti after the earthquake. I wasn’t a first responder or anything, I actually arrived 6 months after the earthquake, so most of the emergency relief was over. I left during some unrest and was told not to return by the nuns there for fear of my safety. I regret not going back to this day.

After that I went to Bolivia for 6 months. There I was a teacher and mentor to some of the more rural communities. Again, both were great experiences but we actually helped in the Bolivian community in a long term manner, where as in Haiti, we didn’t really help anyone, we just floundered like fish out of water. Which is what I think most people were doing.

The reason I think this was the case for most NGOs in Haiti is because of the bias that is expressed in the article. NGOs come to work on the Haitians not with them. I was there to sell them a bill of goos, and not to ask what they needed.

This was made very clear by one example. I was shown a “groundbreaking” new technology, where you could assemble a house from simple materials made of compressed wood that would stand up to hurricane force winds. The issue is that it wasn’t something the Haitian people wanted to use. When we showed it to them they seemed baffled as to how this was a permanent house. They all aspire to the same things we do, that is a solid 4 walls and roof over our heads, not just temporary shelter.

The shelters ended up being a dead end project that floundered because we couldn’t get Haitian support, and I left feeling that I had been more a burden then a support for my friends in Haiti.

In contrast my time in Bolivia was focused and intense. We were working for the nuns in Bolivia, not on them. The goal of this project was to build up a school on the shoulders of American volunteers and then leave the community when it was stable, and when the nuns said they didn’t need us anymore.

In the beginning of the program the volunteers taught core math and science courses and they were integral to the operation of the school. 10 years later (during my time there) we taught basic English classes and visited the neighboring communities. It was rewarding work, but we could see that soon they would no longer need volunteers. After about 20 years of volunteers in this community the school was self-sufficient and the nuns let us know that they didn’t need any more volunteers.

The main difference between our success in Bolivia and relative failure in Haiti was customer buy in. In Haiti we were working on the people not for them. The trust (as stated in the article) wasn’t there and the Haitian people were not leading the effort. This led to some very beautifully created architecture that the people didn’t want to live in.

In my opinion the goal of any NGO should be to build self-sufficiency in a community so that it can stand on its own. The Red Cross didn’t do that. There are organizations out there that have (even in Haiti) if you’d like some references on how to donate to a meaningful charity read Mountains Beyond Mountains and help Paul Farmer out, or just donate to Partners in Health. Note: I have no affiliation with him or his foundation.

I do have more anecdotes, but I’ll leave it at that for now.

Edit: Re-Wrote the whole thing. Thank you nate_meurer, I hope this is clearer, if not please let me know where I can clean it up and I’ll try to get it right. The original in comments in my response to nate_meurer.

Their defense is pretty weak. Essentially they're claiming the reason houses didn't get built was because they didn't know how to build them, or that there were land disputes. All of which are true. But that should have prevented them from spending any significant amount of money.

Where 100% of http://newstorycharity.org donations go: (1)http://newstorycharity.org/roseline *be sure to click on the home cost breakdown.

The 33 families we've funded in 6 months: (2) http://newstorycharity.org/families-page#funded-families

Example of a video every donor gets: (3) http://newstorycharity.org/maria-rose

I find it interesting that no one here has mentioned the Clinton Foundation, they raised a LOT more money and we have the same problem. They did build a hotel though... And they're getting more involved in gold mining.

This makes me think if they will repeat this all over again in Nepal.

We need totally transparent charities across the globe. A lot of my friend here in US prefer to support small local charities that they exactly know how money are going to be spent, even more, they can donate time and participate in those activities. Unfortunately for the charities of a large scale other concerns comes to play, especially here in US - taxes.

I always like to research a charity a bit, because of this fear. Charity Navigator is a good one: http://www.charitynavigator.org/index.cfm?bay=search.summary...

This story reminded me of the Pink Ribbons [1] documentary, which exposes the money-making charities behind breast cancer. Worth finding and watching.

[1] http://www.imdb.com/title/tt2035599/

One of the best and most transparent charities I've ever donated to - https://www.charitywater.org/ I heard the founder speak at a company event a while back and it's truly inspirational.

Sorry for the plug - but that's why I invested in https://publicgood.com - I think they can make it easier to donate to more nimble, locally focused and potentially more effective organizations

Does anyone know anything about the effectiveness of other Haiti efforts like Mercy Corps?

Any charity that doesn't give you a detailed list of what the money was spent on shouldn't get your money.

Red Cross is notoriously corrupt, yet after every disaster they get so much free publicity.

this is the exact scenario in envision whenever someone asks for donations, which happened /a lot/ when i was living in London, where it appears to be a thriving "industry"

imo, working for charitable organizations is unethical

Just listened to the NPR piece the other day and it does really sound shady.

Wait. Didn't VICE do an excellent expose on this very topic, relief capitalism? edit: they call it disaster capitalism, but relief capitalism is also a real thing.

Pretty sure it's not the full episode, but this is a summary of the episode. https://www.youtube.com/watch?v=BNM4kEUEcp8

America's dirty little secret is that the majority of our "aid" is really not aid at all an not really meant for aiding and assisting. This is not really a new thing. It's actually a very old and disastrous thing.

Never Donate to the Red Cross..... There are far far far far better organizations out there.

"The original plan was to build 700 new homes with living rooms and bathrooms. The Red Cross says it ran into problems acquiring land rights. Their internal memos, show there were other serious problems, including multiple staffing changes and long bureaucratic delays. And then there was a period of almost a year when the whole project appears to have sat dormant."

Haiti people was claimed as one of the worsts enemies of Haiti.

A lot of projects were stopped for months by bureaucracy. Some volunteers even claimed to had been menaced with a trial if they dare to move a single rock blocking the street without papers (that often never arrived). Volunteers and doctors did what they can, and it was a lot (thousands or probably hundreds of expensive chirurgical interventions). Finally, tired to sit and wait for months, volunteers spend their last pennies and started returning to their homes and former lives. Other big disasters with hundreds of lifes in danger occur, and Haitians just lost traction and their opportunity to use all those talented people.

Red Cross provides information about how spends the money and pass external audits from independent companies. Each year. In all countries. Local finances are published in red cross bulletins that are available each six months to all people supporting the red cross with their money or time. Maybe this periodist just didn't knew how to use google:

http://www.redcross.org/images/MEDIA_CustomProductCatalog/m4...

Or maybe some of the promised money from donors was just this, a nice promise, and now they need a scapegoat.