The world reached out in grand fashion when a massive earthquake struck Haiti five years ago. Former President Bill Clinton raised millions of dollars. Celebrities organized high-profile benefits.
The American Red Cross joined in the effort in a big way, promising to rebuild homes, schools and infrastructure in a country that was in desperate shape before the earthquake. The Red Cross raised almost $500 million, more than any other group.
Where did the money go? That has come under question in an investigation by ProPublica, a nonprofit news organization, and National Public Radio.
The chief executive of the Red Cross said in 2011 that the agency would “provide tens of thousands of people with permanent homes.” The actual number of permanent homes built through the Red Cross in Haiti is six, according to the ProPublica/NPR investigation.
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Overall, reporters found “a string of poorly managed projects, questionable spending and dubious claims of success.”
The reporting has prompted an inquiry by U.S. Sen. Charles Grassley, R-Iowa. In a letter to Red Cross officials, Grassley said he had been “assured that the Red Cross had made substantial steps forward in improving efficiencies and reducing waste, fraud and abuse within the organization. However, the recent news articles cast doubt on some representations made by the Red Cross.”
The Red Cross’ initial plan, according to the ProPublica/NPR reports, was to build roughly 700 homes with toilets and showers — luxuries in Haiti. They would start in Campeche, a hillside neighborhood in Port-au-Prince where residents lived in mud and sheet metal shacks.
No homes were built there.
According to the reports, the Red Cross was unable to deliver on many of its projects in Haiti. Red Cross leaders were reluctant to rely on the Haitian people or native speakers for help navigating the cultures and politics of a complex, poverty-stricken nation. So the Red Cross gave millions to outside groups, didn’t properly track the money and spent too much on overhead and bureaucracy.
The Red Cross continued to raise money for Haiti “well after it had enough for the emergency relief that is the group’s stock and trade,” ProPublica/NPR reported.
The Red Cross has challenged the reporting.
In a letter to Grassley, Red Cross officials said they spent $400.5 million of the $487.6 million raised. They used the money to repair homes, provide rental subsidies and shelters. They also trained Haitians on first aid and jobs skills, and provided soap, buckets and rehydration packets during a cholera outbreak. The money bought mosquito nets. It helped toward rubble removal efforts. And it helped repair infrastructure.
“For a disaster of the scale of the Haiti earthquake, the needs were so great that we could not in good conscience halt donations or imagine at the outset what precise amount of donations would be needed,” the agency wrote to Grassley. “We are confident that those donations were needed and we spent and committed them well.”
But Grassley’s frustration has only grown. The senator has criticized the Red Cross for not being more transparent about how it spent the money it raised for Haiti.
“It’s unclear why the Red Cross enters into contracts with other organizations stipulating that details of grants can’t be disclosed to the media or donors,” Grassley said in a statement reported by NPR. “Who’s driving the lack of disclosure, the Red Cross or the grant recipients? What’s the rationale for it?”
The Red Cross has faced accusations in the past that it is heavily bureaucratic and intently focused on its public image. ProPublica/NPR reporting raised questions about its response to hurricanes Sandy and Isaac in 2012.
After the Sept. 11, 2001, attacks, then-New York Attorney General Eliot Spitzer said the Red Cross “raised hundreds of millions of dollars that was intended by the donating public to be used for the victims of Sept. 11. I see those funds being sequestered into long-term plans for an organization.”
Red Cross frontline workers over the decades have done tremendous work, often under extremely difficult conditions. Few situations have been more challenging than Haiti, where the earthquake took tens of thousands of lives and displaced some 1 million people.
But it’s essential that not-for-profit fundraising organizations be utterly transparent to donors, to recipients, to the broad public. They deal with disaster. But first they have to earn trust.