Investigation shows inconsistencies in how Red Cross spends donation money

Posted June 22

Haitians set up impromptu tent cities thorough the capital after an earthquake measuring 7-plus on the Richter scale rocked Port au Prince on Jan. 12, 2009. (Deseret Photo)

A Senate investigation released last week found the Red Cross spent 25 percent of the donations it received for Haiti in 2010 on internal expenses. The organization previously said all but 9 percent of donations go directly to humanitarian aid.

NPR reported Thursday that after a massive earthquake struck Haiti’s capital, the Red Cross collected close to $500 million in donations. The group had initially said it provided shelter for 130,000 people affected by the earthquake, but an investigation by ProPublica and NPR found only six permanent homes were built.

That investigation prompted Senate Judiciary Committee Chairman Charles Grassley, R-Iowa, "to look into the Red Cross and its spending records, a process he told NPR was "like pulling teeth."

His report addressed to the judiciary and finance committees found that about $125 million of the total donations was spent on management and further fundraising. A large portion of the remaining $375 million was sent to other charity groups on the ground in Haiti that, according to the Senate investigation, took up to an 11 percent cut of the money for themselves. Grassley’s report went on to say the Red Cross spending system is “complex, yet inaccurate.”

Grassley also found that, despite previous promises of transparency, the Red Cross declined to discuss its own process of internal oversight or disclose information gathered after Hurricane Sandy in 2012.

The Red Cross responded with a statement that said “at no point did the Red Cross refuse to provide requested information.”

But NPR also pointed out that the Red Cross previously tried to stifle an investigation by the Government Accountability Office this past year, saying that the GAO’s “requests for internal decision-making, internal oversight, and internal funding allocation are outside of GAO's authority.”

Grassley’s investigation went on to say that the Red Cross severely cut its own ethics department in between Hurricane Katrina in 2005 — it had 65 employees — and the earthquake in Haiti, when the department was staffed by three people.

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