American Red Cross

While nobody can dispute that the American Red Cross does some incredible work both at home and abroad, when the Haitian earthquake struck in 2010 and left millions displaced and over 100,000 dead, the American Red Cross came under intense scrutiny. For it had received an outpouring of support from generous people and raised half a billion dollars — only to have built six permanent homes, an investigation by ProPublica and NPR published in 2015 found.

The American Red Cross began its work in Haiti almost immediately after the earthquake in 2010. Their immediate concern was saving lives, of course. Providing food and water, medical supplies and sanitation systems, rubble removal and providing other essential life-saving needs to the Haitian people. Great! Fantastic work by the American Red Cross… Unfortunately, they also made promises they could not keep and in fact, showed gross negligence in their failures to deliver those promises. There are several reasons for this, according to the investigative reporting done by NPR and ProPublica, the first of which is outsourcing.

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 allegation that internal spending took up a third of the Red Cross’ budget would apparently be corroborated by reporting from NPR, citing a report conducted by the office of Senator Chuck Grassley of Iowa, which states:

Grassley’s inquiry found that of the $487.6 million donated for the Haiti relief, the Red Cross spent $123.9 million or 25.4 percent on three categories: management, general and fundraising expenses; program costs; and a contingency fund. The remaining funds — approximately $363.7 million — was provided to partner organizations, which took their own cut for administrative expenses.

That $363.7 million that was provided to other agencies to do the leg work on the ground? Each of those agencies took their own cut — some as high as 11 percent, according to the NPR report. Further evidence of the problems of outsourcing came in a report issued by Judith St. Fort, the Red Cross’ Program Director in Haiti, published in May of 2011. The report says two damning things about the problems faced by the ARC when they outsourced work to other agencies:

Serious program delays caused by internal issues that go unaddressed– the directly implemented programs for WatSan, Cholera and DRR are severely delayed, apparently due to lack of staff and training on procurement and HR… There is a clear lack of foresight and planning to ensure that ARC has the capacity to implement programs that are approved. This lack of ability to ensure implementation of programs will present a major credibility risk to the partnership, especially when partners are making much faster progress.”

The report continued: “The lack of relationship development with the critical players (key officials) on the ground has exposed this organization to liabilities and vulnerabilities. Specifically, the lack of demonstrated leadership has exposed ARC to liability in the press, with the HRC and key governmental officials, and an overall perception from the Haitians that we are squandering the donated money.”

In December of 2011, the Red Cross released this paper, detailing the scope of its work in Haiti and its goals in building housing for the Haitian people affected by the earthquake. This paper mentioned building “batches of up to 100 houses” and laid out criteria for each of the houses that were to be built. Here is an interesting related document that accompanied the release of the Red Cross’ goals, which outlined the timeline for completion of the projects. Construction of these houses was scheduled to be completed on in January of 2013…

Fast-forward to 2015 when ProPublica and NPR published their findings — if the proposals were that “batches of up to 100 houses” were to be built, just how on earth did the Red Cross only manage to build six homes in five years, especially when it claimed to have built 130,000 homes for people in the stricken country?

There is a certain level of trust placed in the hands of aid organizations, such as the Red Cross. That trust is manifested in monetary donations by the public to such organizations, but perhaps the greatest amount of trust in the Red Cross was placed in their hands by the people of Haiti. And while they have doubtlessly done incredible work there, as you can see, there have also been gigantic failures, broken promises and a rapidly-deteriorating trust.

According to the United Nations Office of the Special Envoy for Haiti, on their website they monitor international aid organizations and their work in Haiti, stated the following “According to data collected by the Office of the Special Envoy for Haiti, multilaterals and bilateral have allocated $13.34 billion to relief and recovery efforts in Haiti for 2010-2020. Of this $13.34 billion, an estimated 48.2 percent ($6.43 billion) has been disbursed.”

While there are many challenges when operating in a country stricken first by a hurricane and then by cholera – and while those challenges mean greater expenditure by aid organizations- one must question how on earth the American Red Cross took five hundred million dollars, promised to be over a hundred thousand homes and left Haitians with only six. Investigations like those conducted by NPR and ProPublica only leave people questioning why they still give to aid organizations — which should never be the case. Unfortunately, the failings of the Red Cross in Haiti outline why greater transparency is needed and greater public scrutiny placed upon NGOs to ensure that the public’s money is going to those who need it most. The product of five hundred million dollars should not be six homes.

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