Sunday, May 16, 2010

Haiti ... More than $1 billion mobilized ... way less than half disbursed!

Dear Colleagues

In retrospect, there is a huge disconnect between why the public donated money to the Haiti earthquake disaster relief and the way in which the recipients of the money are using the money. This is highlighted in the CEPR blog today at URL which relates to a story by CBS on the web at

I have been asking "accountability" questions of the major NGOs since a few days after the Haiti earthquake in January ... but none of these organizations wants to have a dialog about the subject. I hope this will change in the not too distant future!

In a previous posting, I have talked about the money raised by the NGO community and noted that there are data about the money mobilization but little about the money utilization Clearly there is something going on ... but it is not clear what it is!

Experience from the South Asia tsunami suggests that big organizations maximize their fund mobilization whenever they can ... and run their humanitarian relief operations almost independent of the fund mobilization performance. The big organizations doing work in the humanitarian relief sector are usually seriously constrained by lack of funds contributed to the periodic "appeals" and it is quite unusual for them to have abundant financial resources.

After the tsunami, it is fairly clear that a lot of the funds that were mobilized eventually were used for other purposes ... maybe as much as $2 billion out of a total that was reported to be something more than $6 billion. The accounting is confusing ... and there was never any accountability of any substance.

As in any emergency, including in this present Haiti situation, there are questions about performance. Have resources been used appropriately to handle all the relief needs or not? Data to answer this question is not, it seems, available ... in fact, it seems that there is nobody that is in a position to answer this question. It looks like the availability of financial resources is not the key constraint on relief performance ... but something else. The question is exactly what!

I have been in the middle of humanitarian relief operations in the past ... as well as official development assistance (ODA) ... as a consultant funded by the World Bank, the UN and others. My prior experience was in corporate management. There was a stark contrast between the operational experience of the staff I worked with in the corporate sector and the people I was involved with in relief work. The relief workers had big hearts ... but worked in a different world where bureaucracy was the norm and little appreciation for enterprise, innovation and cost effectiveness! Concepts of management and accountability ... responsibility ... that are commonplace in the corporate world are missing in relief organizations. In the end performance suffers.

Up to now, with respect to the Haiti relief and rebuilding program, I have only been involved from the outside. I am aware how big the job is going to be, and how difficult it is going to be to get the available resources used in the most useful way.

While Community Analytics (CA) is about metrics ... performance is also about know-how and organization and supervision and the mobilization of people and their leaders as well as about money. Planning using a CA people centric community centric data centric approach can be helpful ... and in due course I hope it will be embraced. It is not too late!

The text that initiated this posting follows!

Peter Burgess

This is text of the CEPR blog posting which is based on the text of a CBS news story
Why Don’t They Spend the Money Now, When People Need It?

As described in a CBS News investigation last night, some of the large NGO’s that have received millions of dollars in individual donations – and, we would note, in some cases, U.S. taxpayer money via USAID – have spent relatively little of it, despite the urgent crises facing many Haitians during the rainy season, and with the hurricane season just around the corner.

CBS investigated 5 major charities: CARE, the American Red Cross, Catholic Relief Services (CRS), the Clinton-Bush Haiti Fund, and the Clinton Foundation Haiti Fund. Of these:
Only the Clinton-Bush fund and Clinton Foundation refused to answer our questions, despite repeated e-mails and phone calls. Their websites say they've received $52 million in donor dollars, and have spent only about $7 million: less than one-seventh.

The Red Cross has raised $444 million and spent about 25 percent ($111 million) of it, including $55 million for "emergency relief," such as food and kitchen items, and $42.9 million for shelter including tarps, tents and blankets.

CARE has raised $34.4 million and spent about 16 percent ($5.75 million), $2.5 million of that on "shelter."

And at Catholic Relief Services: of $165 million committed to Haiti, it spent no more than 8 percent ($12.2 million), including $2.5 million on food $1.28 million on emergency shelter.

This blog has previously reported on the questioning of the Red Cross’ spending priorities here, here, and here. The slow spending by CRS is all the more troubling considering that it has received over $21 million from USAID (PDF) specifically to provide shelter and sanitation in Haiti. If it has only spent $1.28 million on emergency shelter, what is CRS waiting for? Should U.S. taxpayers, and the many donors who have given to CRS for Haiti relief, be content that CRS is letting their money sit in the bank?

The charities argue they've already helped millions of people and would get criticized if they spent too much up front instead of addressing the long term.

"At the same time we move quickly, we move also prudently with spending the funds so that we ensure that the investment is made prudently," said Gary Philoctete, CARE Assistant Country Directory Haiti.

Of course these 5 are not the only NGO’s that have raised significant amounts of money for Haiti relief, and not the only ones that appear slow to spend it. The Chronicle of Philanthropy has an update on the totals of funds raised so far. Other major charities, including World Vision, which also has raised over $103 million worldwide, and has received over $19 million from USAID (PDF), have spent only a small portion of that on shelter, based on distribution data from the Shelter Cluster. Hopefully CBS or other major media will begin to question these other NGO’s about their spending priorities as well.

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