Report: Red Cross stumbled in Haiti relief

Five years ago in January, a magnitude-7.0 earthquake rocked Haiti, damaging nearly 300,000 homes and killing 150,000 or more people. In response, hundreds of millions of dollars in private and government donations poured into the country, earmarked to provide food, medical treatment, and shelter for the survivors.

Much of that money appears to have been misspent, according to a report the investigative news organization ProPublica, in partnership with NPR, published on Wednesday. ProPublica said its review of the work of the largest aid organization investing in Haiti, the American Red Cross, found a pattern of failed projects, unfulfilled or delayed commitments, and turnovers in leadership positions.

The American Red Cross collected more donations for Haiti relief than any other charity—$488 million—and says it provided housing for 132,000 Haitians. But according to ProPublica, the group has built just six permanent new homes in Haiti since the disaster. Many of the funds have been allocated for temporary structures, build with plywood and expected to last three to five years. Other financial resources have been gobbled up by executive salaries and administrative costs.

And even the six new homes were built by laborers not affiliated with the Red Cross. Although not directly revealed in the ProPublica report, WORLD has learned the six homes were constructed by a Christian housing charity, The Fuller Center for Housing. The Red Cross paid for the buildings through a $48,000 grant, and was not directly involved in their construction.

The revelations demonstrate the challenges faced by large aid organizations that fundraise successfully but sometimes struggle to implement programs on the ground level.

“You have a huge bureaucracy with Big Aid,” said Joe Knittig, CEO of The Global Orphan Project, which has worked in Haiti. “By the time the money gets down to the point of implementation, there’s a fraction of the money left.”

According to ProPublica, Red Cross CEO Gail McGovern in 2011 unveiled plans to “build brand-new communities” in Haiti. The organization outlined a yearlong initiative to build hundreds of permanent homes—complete with showers and toilets—in a neighborhood called Campeche in Port-au-Prince, Haiti’s capital.

But today, none of those homes have been built, and many residents of Campeche still “live in shacks made of rusty sheet metal, without access to drinkable water, electricity, or basic sanitation,” ProPublica reported.

Jean Jean Flaubert, a local community leader, expressed his frustration at the uncompleted project.

“What the Red Cross told us is that they are coming here to change Campeche. Totally change it,” he told ProPublica. “Now I do not understand the change that they are talking about. I think the Red Cross is working for themselves.”

One former manager of the Red Cross’ Campeche project said it ran into delays because the group “didn’t have the know-how.” Another official involved with the project told ProPublica, “Everything takes four times as long because it would be micromanaged from DC, and they had no development experience.”

Ultimately, the Campeche project was downscaled to involve the construction of a new road, installation of solar streetlights, and repairs to homes and schools.

The Red Cross says difficulties obtaining land titles, a common problem in Haiti, have derailed some of its housing and infrastructure projects. It partnered with USAID in 2011 to build roads and other infrastructure in Haiti, but the $30 million deal was ultimately canceled over a land dispute.

Another $12.5 million Red Cross project to improve roads and provide water and sanitation also has been snagged by delays, ProPublica said. An internal evaluation from March found local Haitians frustrated because the project had produced no “contributions of any sort to the well-being of households.” A Red Cross hand-washing awareness campaign was “not effective” because “people had no access to water and no soap.”

The Red Cross said it has carried out more than 100 projects related to Haiti aid, including building a hospital, donating $44 million for food aid, providing temporary housing for thousands of families, and repairing 4,000 homes.

But the ProPublica report cited current and former Red Cross employees who said the charity’s Haiti work relied too heavily on expatriate staff who couldn’t speak French or Creole. Some employees hired locally were paid far less than expatriate executives: One budget document allocated $140,000 a year in compensation, allowances for housing and food, and travel expenses for the Campeche project’s non-Haitian manager. Meanwhile, the top Haitian employee position was entitled to $42,000.

Some of the $488 million the Red Cross raised for Haiti relief also helped pay down a $100 million budget deficit, ProPublica said.

The Red Cross has committed to spending 91 cents of every dollar in donations directly on program expenditures, with just 9 cents taken out for overhead costs. But ProPublica said more ultimately comes out because once the Red Cross takes its cut, it often grants the remaining money to other aid groups carrying out work on the ground. Those groups in turn take out their own cut for management expenses. According to The Chronicle of Philanthropy, the Red Cross has given $171 million of its Haiti funds to partner organizations.

In a statement, the Red Cross said the report from ProPublica and NPR contained a “lack of balance, context, and accuracy.”

“These funds have helped build and operate eight hospitals and clinics, stem a deadly cholera outbreak, provide clean water and sanitation, and move more than 100,000 people out of makeshift tents into safe and improved housing,” the charity said. It added that its staff turnover and salaries were consistent with other aid groups, and that more than 90 percent of its Haiti relief staff has consisted of Haitians.

When it was unable to obtain land in Port-au-Prince to build homes, the Red Cross said it instead invested in “rental subsidies, repairs and retrofitting of existing homes, as well as teaching people how to repair their homes.” It noted a social obstacle to building new homes outside the city: “Haitians don’t want to leave the neighborhoods where they lived, worked and went to school before the earthquake.”

The six homes the Red Cross did build—actually three duplexes—were part of a larger housing project called Lambi village, in the Gressier region, west of Port-au-Prince. The Fuller Center partnered with a Haiti-based nonprofit, Grace International, to build 28 permanent duplexes on a seven-acre plot acquired through local partners. A $48,000 Red Cross grant paid for three of the buildings, and the rest were funded by other private donations.

Fuller originally approached the Red Cross with the idea of a housing partnership. The Red Cross at first declined the proposal, but later agreed to fund three duplexes, according to Ryan Iafigliola, the international field operations director for the Fuller Center. Volunteer teams from the United States and paid Haitian laborers built the duplexes, without the involvement of Red Cross representatives.

When the Fuller Center approached the Red Cross again with a housing proposal, the Red Cross declined, saying its funds were already allocated for other projects. “We were told by the Red Cross a number of times they didn’t have any funds available” for additional houses, Iafigliola said. “We would have been happy to build more.”

The Fuller Center finished its duplex project at Lambi in October. It also has constructed about 70 homes in Croix-des-Bouquets, just outside the capital, building them on family properties rather than in pop-up neighborhoods.

In all, the Fuller Center has built 175 permanent homes in Haiti, spending a total of a little more than $1 million, according to the group’s spokesman. It relies on Haitians to oversee its housing projects and to purchase local materials.

Knittig, the orphan nonprofit director, said relying on indigenous leaders helps avoid “aid inflation,” where desperate, impoverished locals mark up the price of goods coming from apparently wealthy aid organizations.

“I see a lot of effectiveness through bottom-up, indigenous, grassroots efforts,” said Knittig, whose own organization relies on local Haitian churches to provide orphan care. But bottom-up aid doesn’t always “look good on a postcard in the donor world.”

The alternative is a Big Aid bureaucracy, in which money flows in at the top and is allocated by policymakers in offices. Knittig believes that approach is “utterly inefficient, ineffective, and disabling to those who are at the point of need.”

But even bureaucratic aid organizations have many hardworking people on the ground doing the best they can in difficult circumstances, Knittig said. In defense of the Red Cross, he said, “At least they’re in the game.”