(Updated January 20, 2015, 12:10 p.m. to include a response from the American Red Cross - see below.)

Two years ago, we noted that the American Red Cross’ (ARC) annual update on its response to the Haiti earthquake raised a number of questions, and seemed to provide less detailed information than earlier updates that the ARC had released. This year is little different: The ARC’s five-year update [PDF] is big on saying how many people have been “helped,” “reached” or are “benefiting” due to ARC activities, but few details are offered to explain exactly what this means. Since the ARC is far and away the top U.S. recipient [PDF] of funds for disaster response, and notably served as the go-to organization for millions of Americans who wanted to donate in the aftermath of the earthquake, transparency from the Red Cross is especially warranted.

The Red Cross’ update is overwhelmingly glowing and positive, and certainly the organization has had an impact through helping to build or repair hospitals and waste-water treatment facilities, among other concrete examples. While it may not be surprising for an organization to tout its achievements while downplaying (or ignoring) its shortcomings, considering past questions about its spending and documented problems with some of the ARC’s post-earthquake work in Haiti, an acknowledgment, at least, of “lessons learned” might not be out of place. Yet the ARC response to past criticism of its Haiti response has often been strongly defensive.

In her introductory note, ARC President and CEO Gail McGovern writes that the organization has or is now spending all of the donations it has received for the Haiti earthquake response: “We have spent or made commitments to spend all $488 million of these donations for the Haiti earthquake for projects and programs impacting more than 4.5 million Haitians.” What should be the final breakdown, then, of the ARC’s original earthquake response spending is only slightly different than the percentages the ARC reported two years ago [PDF]: 35 percent for shelter, 15 percent for health (excluding cholera), 14 percent for emergency relief, 11 percent for disaster preparedness, 10 percent for livelihoods, and 5 percent for cholera (which, as we have noted, continues to be a major health emergency in Haiti, killing hundreds of people last year). Yet how exactly these funds have been used, and how effective they have been, is unclear from the update. “4.2 million people benefiting from hygiene promotion activities,” and “3.5 million people benefiting from cholera prevention and outbreak response services” are just two examples of big numbers that the ARC mentions in the report, but “benefiting” is undefined. Further, there is little information provided as to whether these millions of people continue to benefit, whether the ARC’s investments are sustainable, and how the Haitian beneficiaries of joint projects the ARC has engaged in with other groups are counted (and whether each organization working in collaboration on such projects also counts each “beneficiary” its respective impact assessments).

We contacted the Red Cross and they explained further. Where the update states: “the American Red Cross has helped 132,000 Haitians to live in safer conditions—ranging from providing temporary homes and rental subsidies to repaired and new homes,” the ARC explained:

The 132,000 shelter beneficiaries are tallied from a number of housing and neighborhood recovery projects, not all of which were explicitly described in our 5-year report. As is a standard practice in counting shelter beneficiaries of international development projects and disaster response operations, the American Red Cross uses a multiplier of five people to estimate the average size of a typical Haitian household. The 15,000 housing units mentioned in the report, therefore, have benefited about 75,000 people.

In addition to the 27,000 people who have benefited from rental subsidies, the following indicators also feed into the 132,000 figure:

  • Households provided with repaired or retrofitted shelters
  • Households reached as part of a relocation support program
  • Community members trained in proper construction techniques

As for your assumption that our shelter figure includes “tents, tarps, and other types of emergency shelter” that we distributed alongside the global Red Cross network in the earthquake’s immediate aftermath, it does not.  

As with all of the numbers that we report, we always take the most conservative counts possible in order to reduce the risk of double counting beneficiaries.

Regarding the “3.5 million people benefiting from cholera prevention and outbreak response services,” the ARC replied:

There are several facets to our cholera work, and those 3.5 million people are tallied from nine different projects including activities ranging from administering cholera vaccines to providing treatment for symptoms. Each of these projects counts beneficiaries differently due to the diversity of beneficiary engagement. For instance, one project trained cholera response teams which were deployed into 50 camps in Port-au-Prince and the surrounding areas in order to help train camp residents on proper sanitation practices and educate them on how stem the spread of the disease. Additionally, the project set up oral rehydration points
which offered clean water and oral rehydration salts to help treat patients suffering from the disease. This particular project counted each person engaged in the sanitation education and each person that received rehydration salts. As with all of the numbers that we report, we always take the most conservative counts possible in order to reduce the risk of double counting beneficiaries. 

About the 4.2 million people benefiting from hygiene promotion activities, the 551,000 people "covered by disaster preparedness and risk reduction activities," or the 867,000 people "benefiting from community health services"? Here the ARC didn’t break things down much further, although they did note that multipliers are used in some calculations, such as “development of family emergency plans,” while stressing, again, that estimates are “conservative” to avoid “double counting beneficiaries”:

As you can imagine, each sector’s beneficiaries are counted differently – depending upon the type of beneficiary engagement and the nature of the program. For example, disaster preparedness programming is rolled out through a spectrum of inter-related activities (designed to work in tandem) including various levels of training and community sensitization, household response planning, school-based programs, micro-mitigation projects, etc. While training activities—like risk assessment trainings—generally count heads, activities such as development of family emergency plans use a multiplier based on average household size. Each activity counts beneficiaries in specific ways with the intention, as stated above, to take the most conservative counts possible in order to reduce the risk of double counting beneficiaries.

If we compare the ARC update with their 2013 report, we can further measure some of the Red Cross’ reported achievements. The 2015 update states: “To date, we have enabled the construction, upgrading or repair of more than 15,000 transitional and permanent homes, and have helped more than 27,000 people by subsidizing their rent.” This would mean 1,000 “transitional and permanent homes” in the past two years, and 7,000 more people helped through rent subsidization. As we noted in our “Haiti by the Numbers, Five Years Later” post last week, and as described in detail in new reports from Amnesty International and Action Aid [PDF], some 80,000 people made homeless by the quake continue to live in tent camps, and the number would be much higher were it not for forced evictions carried out over the past five years. One thousand “transitional and permanent homes” in two years is not a big number compared to the need. Further, it would be useful to know how many of these homes were “transitional” and how many were “permanent” – numbers that the ARC should be able to provide. We know that the international response as a whole has managed to produce only a small number of new, “permanent” homes – less than 10,000.

Likewise, two years ago, the ARC wrote: “the American Red Cross has also spent more than $50 million on projects that have improved access to clean water and sanitation for 545,000 people.” The five-year update reports that “556,000 people [have benefited] from access to improved water and sanitation.” This would mean just 11,000 more people over two years, apparently at no additional cost to the Red Cross (the update describes, for example, money spent on the construction of the Morne-à-Cabrit waste-water treatment plant), since the amount the ARC says it has spent in this area is actually a smaller figure than in 2013 (the ARC says this is because “As needs and priorities change, we occasionally shift committed funds to a sector with the most need”). But, in fact, it appears to be 11,000 in one year, since the ARC reported the same 556,000 figure last year – meaning no additional people “benefited” from “improved water and sanitation” over the last year, according to the ARC’s updates.

As the Red Cross itself notes, “cholera is mainly transmitted through water and poor sanitary conditions” and the U.N. Office of the Coordination of Humanitarian Affairs reported a year ago that just “64% of the total population (77% in urban areas, 48% in rural areas), have access to safe drinking water 13; 26% have access to improved sanitation (34% in urban areas, and 17% in rural areas).” “Improved water and sanitation” are important, pressing needs in Haiti; if the Red Cross is no longer able to “benefit” people in these areas because it no longer has funds to spend on such clear, urgent needs, perhaps it should consider a new funding appeal.

The Haiti response update isn’t the only case of Red Cross opacity regarding its expenses. A recent ProPublica and NPR investigation found that while McGovern has publicly claimed that the organization spends 91 cents of every dollar donated on services, this is not true. Reporters Jesse Eisinger and Justin Elliott of ProPublica, and Laura Sullivan of NPR, write: “After inquiries by ProPublica and NPR, the Red Cross removed the statement from its website.” (While the ARC may have removed the 91 cents “donated” statement elsewhere from its site, its claim that “91 cents of every dollar spent by the American Red Cross goes directly to humanitarian services and programs” was still included in its update and its January 6, 2015 press release on its Haiti work; see the ProPublica/NPR article for an explanation of why that, too, may be misleading.)

Eisinger, Elliott and Sullivan write:

The Red Cross said the claim was not "as clear as it could have been, and we are clarifying the language."

The Red Cross declined repeated requests to say the actual percentage of donor dollars going to humanitarian services.

But the charity's own financial statements show that overhead expenses are significantly more than what McGovern and other Red Cross officials have claimed.

In recent years, the Red Cross' fundraising expenses alone have been as high as 26 cents of every donated dollar, nearly three times the nine cents in overhead claimed by McGovern. In the past five years, fundraising expenses have averaged 17 cents per donated dollar.

But even that understates matters. Once donated dollars are in Red Cross hands, the charity spends additional money on "management and general" expenses, which includes things like back office accounting. That means the portion of donated dollars going to overhead is even higher.

Just how high is impossible to know because the Red Cross doesn't break down its spending on overhead and declined ProPublica and NPR's request to do so.  

The questions raised by ProPublica and NPR have prompted Senator Charles Grassley to also demand answers from the ARC, and the Chronicle of Philanthropy has listed it as one of seven “non-profit groups to watch in 2015” because of its battered image.


 UPDATE, January 20, 2015, 12:05 p.m.: American Red Cross spokesperson Jenelle Eli sent HRRW the following response on January 20, 2015 (emphasis in the original):

The American Red Cross 5-year Haiti update provides an overview of our work in the country since January 2010. Rather than list the 100+ projects we’ve undertaken, the 8-page document offers a summary of how the American Red Cross has used generous donations to improve the lives of Haitians affected by the quake.

We are proud of our accomplishments in Haiti, while being keenly aware that there is still a lot of work to be done. That’s why we continue to invest in shelter, livelihoods, water & sanitation, disaster preparedness, health, and cholera treatment & prevention. We have fully committed and/or spent the funds allocated for Haiti, which doesn’t mean that the funds are “gone,” as articulated in Dan Beeton’s most recent blog post. Instead, it means that work continues and that, at this point, what is not yet spent is under contract or obligated for specific projects.

To date, more than 4.5 million Haitians have benefitted from donations to the American Red Cross. As the years pass, a decline in the number of new people benefiting from projects is to be expected. Why? Because many families benefit from our services day after day and year after year. For example, if a family received a toilet three years ago, they are still benefiting from that toilet – and they will continue to benefit from that toilet for decades. Likewise, if an amputee received services from a prosthetics clinic that we helped build in 2010, s/he is only counted once regardless of the number of times the clinic is visited.

It’s also important to understand that addressing the housing shortage in Haiti is not a matter of simply giving out more rental subsidies or building new homes. Haiti’s rental market is saturated and there is not land readily available for new housing developments where people actually want to live. Therefore, assumptions that rental subsidy or new housing numbers should have steadily increased are misguided. Instead, the American Red Cross has invested time, effort and funding jointly with other stakeholders in developing alternative durable housing options which include: camp transition projects, new settlements support, house retrofitting to increase safe rental stock, and integrated neighborhood renovations. These American Red Cross funded projects are contributing to steadily and permanently decreasing the number of people living camps.

Regarding lessons learned, there are many, including:

  1. Durable solutions take time. In the earthquake’s immediate aftermath, the global Red Cross network provided tarps and tents, life-saving medical care, food, water, and other temporary assistance. However, it was vital that we were able to ensure more permanent, durable solutions. Therefore, we undertook recovery projects that help make people more resilient to future disasters and health crises. The construction of medical facilities, the comprehensive rehabilitation of heavily affected neighborhoods, the integration of water and sanitation, livelihoods, risk reduction and community health activities take intensive consultation and negotiation with residents, local authorities, community-based organizations and other stakeholders.
  2. Choices must be made. There are many needs in Haiti and no organization can possibly address all of them. Therefore, the American Red Cross made choices to focus recovery programming on durable housing solutions, community health, cholera partnerships, livelihoods, youth and disaster risk reduction.
  3. Partnerships are extremely important. From small local community-based groups to large international organizations, it is essential to locate the best partners available. American Red Cross does not work alone in planning, implementing, and monitoring projects. Close collaboration with partners has been extremely valuable to maximizing efficient use of resources and ensuring technical rigor.

As American Red Cross’s work in the country continues, anyone interested in following its progress can get regular updates at redcross.org/Haiti.
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