Red Cross Under Fire

The American Red Cross has been getting lots of criticism over the years for their lack of transparency over where donations go, due to a policy of putting disaster-specific donations into their general fund. They got a bad reputation after Hurricane Sandy, for squandering their funds and not offering any help on the ground. And now they’re in trouble again, due to problems with their response to the Haiti earthquake.

They raised half a billion dollars to build houses, and built six houses. These aren’t the sort of opulent palaces that would normally cost $80 million each, either. Just ordinary houses. The sort that makes you think they could have got the whole job done for half a million instead of half a billion… probably considerably less, given the low cost of labour there.

It’s not at all clear where the rest of the money went… that same lack of transparency that’s hurt them before. Perhaps all but a paltry few thousand were redirected to some other natural disaster, but if that’s the case, why would they hide it?

I’ve been thinking for years that private charity is a poor substitute for government. An inefficient, unreliable, and biased substitute. Not least because you can fund charities at cross-purposes… one charity to educate and one to misinform, for example. Or one to increase voter turnout and one to suppress it. This is my go-to argument whenever I’m told that people are more charitable in conservative countries than in liberal countries.

I had thought disaster relief was largely immune to this phenomenon. Nobody is out there supporting the disasters. Surely the charities, though not as effective as good government, must come close to being as effective as mediocre government?

I have some hope that the Canadian Red Cross doesn’t have the same problems as the American. But it’s not much hope… after all, the blood donations that are most of the American Red Cross’s business were stripped away from the Canadian Red Cross after their shocking negligence in spreading Hepatitis. Perhaps that was the shock to their system they needed. But I doubt it.