A report released Wednesday reveals multiple discrepancies in donation allocation by the American Red Cross during disaster relief efforts for the 2010 Haiti earthquake.
The Red Cross previously told the public that it only spent 9 percent of donated funds on internal expenses, a number the report reveals to be closer to 25 percent — almost $125 million — in reality, NPR reported.
The report is the product of a year-long investigation spearheaded by Iowa Sen. Chuck Grassley (R), chair on the Senate Judiciary Committee. Sen. Grassley became concerned about discrepancies in the Red Cross’ funding in 2015. After a year of back-and-forth with the Red Cross, Grassley and his office took matters into their own hands, claiming “we did not get satisfactory answers. It was like pulling teeth.”
The unwillingness to cooperate was a red flag that the Red Cross may be trying to elude the public about its internal operations and funding allocation.
“It seemed as though ARC had failed to live up to its responsibility to be a standard-bearer of transparency, efficiency, and good-will among the charitable community,” the report said.
“One of the reasons that they don’t want to answer questions is it’s very embarrassing,” Grassley added.
This is especially true since the charity raised nearly $500 million for relief efforts – more than any other nonprofit – gathering donations from “major corporations, customers who gave at the cash register, people who donated $10 by text and school children who took up collections,” according to a report from the ARC. All funds donated were intended to be used for the ARC’s Haiti Assistance Project (HAP), providing medical attention, shelter, food and other basic necessities to Haitians in need.
A lack of transparency is concerning given that the ARC is a non-profit with a tax exempt status and is a congressionally chartered instrumentality of the U.S. government, receiving some special government benefits. This status means that the ARC has a heavy responsibility “to be as honestly, efficiently, and transparently operated as possible.”