
Red Cross Raised Half a Billion Dollars for Haiti ­and Built Six Homes (2015) - wallace_f
https://www.propublica.org/article/how-the-red-cross-raised-half-a-billion-dollars-for-haiti-and-built-6-homes
======
nabla9
Article talks about The American National Red Cross. American Red Cross has
controversial reputation. It's unfortunate that the reputation of American Red
Cross can tarnish the good reputation of The International Red Cross.

Another point, not related to this case:

Money from fundraisers for large charities does not necessarily go to the
cause they are collecting it. It often comes too late over weeks and months
and you have budged and organize everything ASAP. If the money collected goes
to fund the next big catastrophe and not the current one, there is nothing
wrong with that. People are just emotional and irrational givers. Money is
given as function of lobbying effort, not as function of need.

~~~
mongol
Same with the Swedish Red Cross. A couple of scandals showing poor use of
donated money. Huge salaries to board members and also a previous "CFO" was a
criminal and sentenced for embezzlement.

------
grecy
After three years moving through 35 countries in Africa, this sums up my
experience and thoughts on aid money. I have spent considerable time with a
ton of UN and NGO people in many different countries, and heard plenty of
great first-hand accounts of how things actually work on the ground.

It sounds great, and the people giving the money really think they're helping.
Unfortunately, it's rarely the case.

~~~
tkmunzwa
> It sounds great, and the people giving the money really think they're
> helping. Unfortunately, it's rarely the case

I don't think your experience driving around Africa gave you a enough
information to adequately support your conclusion (which I could not leave
unchallenged). I mean this in a non-disparaging way: you got breadth, but not
depth. I, an African, on the other hand, have depth, but not breadth.

I have some experience with both sides of the NGO coin: I've seen communities
and individuals positively. From disease eradication in whole communities to
people regaining their vision. People giving money _are_ helping in most of
the cases. On the other side of the coin - I agree that NGOs have a lot of fat
they could cut in terms of expenditures that do not directly go to their
mission, but this depends entirely on which NGO it is and what their culture
is, not all of them are the same. This is an industry ripe for disruption by
leaner setups, too bad VCs aren't really geared for this.

Donors are helping, but maybe not as much as they think they are (per dollar).
It would be great if they would research the org they are donating to to find
how many cents per dollar are going to the cause. More transparency in this
area is needed.

~~~
grecy
> _I don 't think your experience driving around Africa gave you a enough
> information to adequately support your conclusion....you got breadth, but
> not depth. I, an African, on the other hand, have depth, but not breadth._

That's a great point I had not thought enough about, and I think you are
correct.

Certainly your examples of health (disease and sight) sound very positive.

Also examples where NGOs or World Vision or whoever bring in massive
quantities of food appear very positive on the surface, though the long term
consequences are extremely unhealthy, and just create more of a dependence
loop than ever before, until locals are utterly unable to help themselves.

> _Donors are helping, but maybe not as much as they think they are (per
> dollar). It would be great if they would research the org they are donating
> to to find how many cents per dollar are going to the cause. More
> transparency in this area is needed._

More transparency is absolutely the key, but I also think it's really
important to take a step back and really think about if and how any donor is
actually "helping" at all. We in the west have this funny idea that money is
the answer to everything and more money = a better life. Certainly it's
important to have healthcare and clean drinking water, but after that a lot of
times I saw money degrading African society, not making anything better at
all.

I'm terrified we'll turn many special countries into "little America" or
"little Europe" complete with high cancer rates, stress, 9-5 jobs, pollution,
lack of care for our community and neighbors, high crime, rampant greed and
inequality ,etc. etc.

~~~
mruts
I live in Tanzania and the only people who don’t want the country turn into
“little America” or “little Europe” is foreigners who just want to go on
Safari. I and everyone else would love skyscrapers, 9-5 jobs, money, IPhones,
etc.

~~~
grecy
> _I and everyone else would love skyscrapers, 9-5 jobs, money, IPhones, etc._

Of course you do. What you don't want is skyrocketing cancer rates, heart
disease, spousal abuse, a severe lack of time, people who are so poor they
can't feed themselves, high crime rates and all the other things that come
along with the "shiny" stuff like 9-5 jobs, money & iPhones.

The thing is the developed world hasn't figured out how to get one without the
other, and if I were you, I would think long and hard if you _really, really_
want what you're asking for.

I lived that life of the developed first world city, and frankly, it's
horrible. I recently spent time in one of the world's most livable cities,
supposedly a great place to live. After three years in Africa I would rather
die than live in that "great western city".

~~~
mruts
I moved from NYC to Tanzania and spousal abuse, cancer, poverty, and crime is
way higher here than there. The only tangibly better part of the culture is
the sense of community.

I love Tanzania, but I recognize that it’s because I have the money to live a
very good life here.

Unfortunately, I’ve gotten a little addicted to the power of having a cook,
housekeeper, and gardener for under $15/day total. I miss NYC, but I also
realize how hard it will be to go back to just being an average joe.

~~~
grecy
Sure, but you live in a city in Tanzania, which is already going the way of
"Western City", so it already has all the bad stuff.

Get out into a town or village, or better yet, get to a country that isn't
overrun with tourists like Tanzania is. Gabon is simply breathtaking, Congo is
wild, Burundi really is the heart of Africa, Djibouti is like a different
planet! There is a lot to explore, a huge part of me wishes I could turn
around and drive south right now!

------
ncmncm
Giving the money to other organizations actually competent to do the work was
a good idea. Skimming 9% and then allowing those to skim 24% off the top, less
so. (But we don't even really know about the remaining 67%.)

Probably they should have identified groups actually doing work, and let them
skim off 0%. I.e., let them submit bills to reimburse expenses for shipping,
materials and local labor. Well-run organizations can achieve more when they
don't need to scrounge for material expenses. Then, you can apportion
according to tangible results.

But what do I know?

~~~
fyfy18
> Probably they should have identified groups actually doing work, and let
> them skim off 0%. I.e., let them submit bills to reimburse expenses for
> shipping, materials and local labor

I worked for a UN aid organisation a few years ago that worked like this. They
have teams in the country that work with local suppliers to procure whatever
goods or services they need to complete projects. The local supplier submits
estimates that will be paid upon completion (the local supplier usually
receives a bank loan for the funding, rather than being paid in advance).

Even so there is still a large amount of overhead. As with any government-
esque organisation there is plenty of red tape and beuracracy at every level.
The employees at this organisation are paid a very good salary, tax free, and
get a whole host of other benefits and great pension. A lot of people don't
seem that great at their job, but once they are in, they stay for life as it's
rather cushy. The teams in charge of projects will fly a few times a year to
the country, first class. Worst of all I heard rumors of projects being
carried out that weren't needed, but were just done for whoever was in charge
to get their promotion.

------
drilldrive
Stories like this are why I cannot in good faith donate to large charities.
There needs to be more details on the inner workings on these charities, and
even if they are in good faith it seems that smaller (and likely religious)
organizations do the work more efficiently.

~~~
door5
Issues like distaster recovery should be handled by governments, not
unaccountable private charities. The issue is that the U.S. has systematically
destroyed Haiti's infrastructure for nearly a century and overthrown any
leader that isn't a puppet regime.

~~~
mjevans
This directly runs counter to the idea I was going to pitch.

Send in the troops and have the Core of Engineers actually build out
infrastructure and cities to bring them up to modern code in a maintainable
way. Also pull in some locals for education in how that stuff is done in the
process and try to do knowledge transfer of "This is how you build
civilization that does not get flattened by a hurricane."

Given the political history, I doubt that would go well. Is there a foreign
military power with a similar skill set that could do this task?

~~~
Joakal
Why does it need to be military? IIRC, Australia sent police, specialists as
part of post Iraq war efforts.

US could send in fact send non military; engineers, etc, but it will viewed
with local suspicion and may make things worst (assaults, sabotage by either
side or third party). Even US is suspicious of foreigners building US
infrastructure (ie Huawei).

When there's so much distrust of US by Haitians and US likewise doesn't trust
Haitian government with funds, there are quasi government organisations such
as UN:
[https://www.un.org/un70/en/content/70ways/index.html](https://www.un.org/un70/en/content/70ways/index.html)

Even they have had issues in Haiti.

~~~
tialaramex
Armies are portable civilisation.

If you task most civilian forces with going somewhere that has disaster level
problems there will be blockers. Oh, we can't go there until they have: power,
clean water, working telecoms, physical security, etc.

In contrast your military forces can, if necessary, bring everything. A US
army deployment can make its own electrical power, make water safe, deploy
radio communications, and of course it can provide its own physical security.
It is not cheap, but it works.

~~~
kaybe
Is there something like THW in the US?

[https://en.wikipedia.org/wiki/Technisches_Hilfswerk](https://en.wikipedia.org/wiki/Technisches_Hilfswerk)

The only thing they don't do is the physical security.

~~~
CydeWeys
We have FEMA, which is similar:

[https://en.m.wikipedia.org/wiki/Federal_Emergency_Management...](https://en.m.wikipedia.org/wiki/Federal_Emergency_Management_Agency)

They did a pretty shit job managing Hurricane Katrina though. Bush's political
appointee to run FEMA had no relevant experience, and Trump now also has a
variety of incompetents running various agencies.

The military is bigger, better funded, and most importantly, more competent. A
lot of people in a disaster in the US, upon hearing that FEMA is coming, would
rather wish it were the military (just based on track record).

------
superkuh
>The Red Cross said it has to scale back its housing plans because it couldn't
acquire the rights to land. No homes will be built.

The article's second half spends most of it's time describing the unreported
management overhead that probably has to do with trying to navigate the
infeasibly complex and ill-defined land ownership and transfer system of
Hati's government.

~~~
shard972
And yet the clinton foundation had no issue building a 5 star hotel. Maybe
they could have just asked them for some help dealing with the government?

Nah not worth it, it's just half a billion.

~~~
makomk
Apparently plenty of people had no trouble building 5 star hotels:
[https://www.pri.org/stories/2013-11-25/does-haiti-really-
nee...](https://www.pri.org/stories/2013-11-25/does-haiti-really-need-luxury-
hotels) Maybe the Haitian government was simply more open to hotel-building
than home-building?

------
harshreality
I would like to see a requirement for tax-exempt charities (maybe even any
organization, tax-exempt or not, that acts like a charity, collecting
donations to help with
healthcare/shelters/residences/infrastructure/education) to report pass-
through granular summaries of material expenses and labor for lowest-level
contractors, per project. Each project should state clearly its scope, budget,
expected outcome, and final outcome once available.

As far as I can see, not even more honorable NGOs like the Gates Foundation do
this. I see their annual report, and I see their financial statements, but
neither really gets at what I'm looking for.

As generic examples, "Haiti earthquake recovery" and "malaria program" are not
valid project scopes. They're vague umbrella categories that could have tons
of unnecessary overhead with many levels of "contractors".

~~~
charlesdm
Don't disagree, but what you're proposing is also overhead. Not a problem for
the large players, but perhaps harder to do for the small tax exempt
charities.

------
cschep
[https://my.charitywater.org/](https://my.charitywater.org/) has done an
amazing thing in recognizing that a lot of people see this corruption and give
up on the whole thing. They donate 100% of what you give. They get separate
donations to cover operating costs, even using separate money to cover visa
fees so that if you give 100$ on your credit card, 100$ goes to getting water
to people. I find their work very impressive!

~~~
benj111
I'm not sure that's an improvement.

Charity X: 95% of money donated goes to the cause.

Charity Y: 100% of money donated goes to the cause ( but we get an extra 20%
from some where else).

Charity X, incentives are aligned to minimise administration spend. Charity Y
obscures that link.

~~~
falsedan
Who cares if their admin spend is high if as a individual donator none of my
donation goes to that spend?

I imaging the admin is covered by corporate donors/payment processors waiving
fees and claiming it all back on tax

~~~
benj111
Because those corporate donors would have donated anyway. In fact just like
people they probably want their money going to good causes rather than admin.

And you start getting all kinds of perverse situations. What happens if they
have funding to take $1 million in donations, but they get $2 million? Do they
return donations?

What happens if they can't get enough admin donations? Do they stop work?
Regardless of how much money they have in the bank, waiting to go to good
causes?

Then there's the issue of splitting your fund raising efforts. Instead of
telling everyone 5% of their donation is going to admin. You have to have a
distinct team of admin fund raisers.

So to answer your question _I_ would care if their admin spend was high. And
the current set up obscures what that spend is.

------
concernedaboutu
Did this article get help to actual people on the ground in this particular
relief area?

What proceeds did you earn from ads on this article? Did you donate those?
Where did you donate those proceeds?

Did this article minimize overhead of relief efforts anywhere?

Are you suggesting that ARC should not have collected donations at all?
Because they do not have an established presence in the relief territory and
are thus unqualified to determine how best to allocate donations, they
shouldn't have collected and donated hundreds of millions of dollars to help?

Here would be a better way to use this time:

\+ Develop a list of actionable suggestions for improving efficiency and
allocation of relief aid

\+ Develop solutions for problems in resource-constrained areas

\+ Establish rapport with the people who you think are actually helping

\+ Develop a transparent and accountable international transaction network
that operates with minimal resources (on devices powered by hand crank and
solar power)

\+ Develop clean energy production capacity, storage, and a resilient power
grid in order to produce 3D-printed homes (with plumbing and electrical to
code) where there is little timber, clean water, and plenty of sand

\+ Connect people in need of basic necessities with an efficient supply chain
that doesn't leave pallets of things undistributed

\+ Go hand out water and MREs and try not to get sick

\+ What is a reasonable MLR (Medical Loss Ratio)

~~~
imtringued
Writing that article probably didn't take more than a week so lets say 40
hours. Now compare that with the donation amount. 0.5 billion dollars.
Assuming very generously you paid $300 per hour per employee (just to drive
home how crazy the amount of money is) this is equivalent to 1.6 million man
hours wasted compared to 40 hours. Someone with only 40 work hours is unable
to solve the problem. An organization with millions of man hours should be
able to solve the problem. In other words criticizing the author for wasting
his time is completely crazy because unless he writes another 40000 of these
articles his inefficiency amounts to almost nothing.

------
sparkling
If you are looking for a charity that provides instant improvement in the
lifes for those on the receiving end and does not have huge bureaucratic
overhead, i suggest:
[https://www.onedollarglasses.org](https://www.onedollarglasses.org)

They provide cheap, affordable glasses that can be
manufactured/repaired/adjusted locally. They train people in the villages and
provide the material needed.

I have no affiliation with them.

------
kc1116
The comments here are very funny. Lots of finger pointing at Haitians,
“corruption”, “land ownership system”, “send the army”. Let’s not forget and
please acknowledge real facts. Haiti’s slave revolt the only successful one in
history saw African people pummel Napoleons French army, the British army and
the Spanish army. From 1804-1825 there was a economic embargo on the country
(similar to what we do to North Korea). It only stopped when Haitians agreed
to pay French slave owners reparations for the money they lost and property
(slaves and land ). “In 1838, France agreed to reduce the debt to 90 million
francs to be paid over a period of 30 years to compensate former plantation
owners who had lost their property. The modern equivalent of $21 billion was
paid from Haiti to France.” So, French banks actually loaned Haiti money with
very high interest to pay the French government and avoid sanctions thus very
deliberately stifling the growth of the country almost haunting it altogether.
Note also this was the colony that made the French more money than all 13 of
its colonies put together. Therefore the predicament we have today is due to
the pure wickedness and greed of the French coupled with natural disasters.

Ps: recently us mercenaries were captured in Haiti deliberately inciting
violence and instability. They have since been released to the US.

[https://www.google.com/url?sa=i&source=web&cd=&ved=2ahUKEwiY...](https://www.google.com/url?sa=i&source=web&cd=&ved=2ahUKEwiYve2o-q7hAhWliOAKHd2UBMwQzPwBegQIARAC&url=https%3A%2F%2Fnationalpost.com%2Fnews%2Fworld%2Ffive-
heavily-armed-u-s-mercenaries-were-captured-in-haiti-why-were-they-allowed-to-
fly-straight-home&psig=AOvVaw2QMbJN3QTItNoJbxdUHFWo&ust=1554210201201474)

Yes these things are not reported.

------
Dowwie
One thing that requires clarification here is that there aren't shady
characters at the helm of the American Red Cross collecting a billion dollars
in grant money to develop housing. The money donated to the ARC isn't
squandered by executive compensation. The Red Cross isn't even in the business
of building houses. It helps provide housing through hotel voucher financial
assistance or manages shelters. So, it's no wonder that mistakes were made.
The ARC does a lot of things right. If people in the ARC actually committed to
housing development, it wouldn't build the houses. It would partner with
developers who did.

I'm a disaster response volunteer, although inactive since Katrina.

------
threeseed
> The Red Cross says it has provided homes to more than 130,000 people. But
> the actual number of permanent homes the group has built in all of Haiti:
> six.

I don't understand what is wrong with this situation.

The priority was to stop people dying not necessarily to solve a future
inequality problem.

~~~
nerdponx
Do you really want to donate a charity that lies about what it's doing with
your money? I definitely don't.

~~~
joesb
Did they lie, though.

Providing homes as in places to stays during disasters does not neccessary
means "permanent" homes.

~~~
yakshaving_jgt
I think what you’re insinuating is actually _worse_ than the reality.

I can understand “we genuinely wanted to help but we’re too incompetent to
action on our promises”. That’s morally much better than “we intended to
deceive from the outset and other people’s suffering is just the cover we need
to line our own pockets”.

------
breakpointalpha
Want to get rich in Haiti?

Work for an NPO ->
[https://www.averagesalarysurvey.com/haiti](https://www.averagesalarysurvey.com/haiti)

You'll likely earn 3x what a Doctor would earn.

------
arisAlexis
transparency could be enhanced by a public ledger such as blockchains

------
eecc
Ah ok. I’d have interjected with a scathing comment about how ideological
market liberalism dooms these projects. Asked why couldn’t the Haitian
government and legislature take over land plots and run the rebuilding
projects; with logistical help and training from more advanced FEMA-like
agencies from USA or other countries.

But then again, I remember how the Protezione Civile made a mess in L’Aquila,
Italy and I wonder if Haiti would have fared better

------
math_random
people should just give money to bill gates. he gets things done

------
rawmodz
There are so many other organizations worthy of donations - UNICEF, Oxfam,
Partners in Health, and tons of local NGOs. Maybe it's time for Red Cross
donors to look elsewhere, until they clean up their act.

~~~
steve19
Oxfam was literally banned from Haiti due to staff exploiting locals for sex
after a natural disaster.

[https://www.theguardian.com/world/2018/jun/15/timeline-
oxfam...](https://www.theguardian.com/world/2018/jun/15/timeline-oxfam-sexual-
exploitation-scandal-in-haiti)

~~~
BubRoss
Sure, but how many permanent homes have they built?

------
onetimemanytime
Instead of donating to feel good, wish it was easy for people in rich
countries to buy someone a cow, change the roof, pay for a kid's school etc
etc. Things that costs as little as a few hundred dollars but can change a
life.

Red Cross should shunned by all, no TV time during emergencies.

~~~
precisioncoder
There is an organization that focuses on this which has been quite successful
as far as I know.

[https://www.kiva.org/](https://www.kiva.org/)

The idea is micro loans directly to people who want to do something like buy a
cow.

"Kiva loans have a historical repayment rate of about 97% (this number
fluctuates slightly so check Kiva's homepage for the current rate)"

When you receive the money back you can then make another micro loan to help
someone else out.

~~~
onetimemanytime
easier said than done, but imagine the satisfaction of a US middle class
person spending $480 to cover the yearly tuition to a poor but bright student
in X country? Nothing goes to support a gazillion "charity" managers.

I understand that fraud, nepotism etc etc all get in the way.

~~~
smileysteve
> US middle class person spending $480 to cover the yearly tuition to a poor
> but bright student in X country?

So, the U.S. has its own student loan bubble, that many economists believe is
related to the increased availability of student loans AND/OR charitable
donations to scholarship funds;

Is there evidence that covering 3rd world tuition doesn't create further class
divide, and/or increase the cost of tuition in general? And that perceivably
"bright" students are already often the best off.

Also realize that in many places in the world with $480/year tuition are
receiving education from sources that get at least some of their funding or
staff from NGOs; and that in many cases, "education" is in many cases
separating children from their families -- and potentially (though the result
dithers morally) decreasing the entire family's ability to be self sufficient
by removing productive workers (in a culture where minimum, age of laborers in
lower than the U.S. 16)

------
irrenhaus
Serious question: The article says that there are roughly 10 million people
living in Haiti. It also says that the Red Cross collected roughly 500 million
dollars in donations. To me this sounds like it would have been a better idea
to take whatever they wanted for themselves and give the remaining lets say
400 million in equal parts to the people of Haiti. Even if only 50% of that
money would have reached its destination, each of the Haiti people would now
have 20 million dollars to built up new lives. So why would these
organizations try everything to buy land there and build houses and stuff -
instead of just giving the money to the people who need it. Except for taking
the money for themselves, obviously.

And I'm sorry but I cannot believe that one would actually need more than 300
million dollars to get an arbitrary amount of money to 10 million people.

~~~
shabda
> each of the Haiti people would now have 20 million dollars to built up new
> lives.

Isn't your math way off?

50% of 400MIllion = 200MIllion

200Million/10Milion = 20

So each person gets 20$, not 20 million dollars.

~~~
irrenhaus
Ha, damn, now that's quite some error there! Thanks for correcting :)

