Charity frauds reach upper echelons as $500 million in contributions for Haiti lost in bureaucracy

As consumer watchdog groups follow in the footsteps of the great Ralph Nader, the realization that non-profit charities are more about big business than in aiding people has for a long time been a question on the minds of many.  And at the highest level of domestic and local charities is that of the Red Cross, who in a new report from June 6 showed that the incompetence of the organization’s massive bureaucracy lost track of nearly $500 million in donations that were supposed to go directly to the people of Haiti after the earthquake that totaled the island.

According to an investigation by NPR and ProPublica, $500 million in charitable contributions that were made immediately after the disaster, and that were publicly announced by the Red Cross to go for the rebuilding of hundreds of homes to provide shelter for close to 130,000 displaced residents, was squandered and ‘lost’, and they have no answer for what happened to most of that money.  And in five years time, only six homes have been built out of the promised 700 publicly announced by the organization.

An investigation has found that the American Red Cross wasted $500 million in its bid to help Haiti, underperformed in its programs, and then tried to cover it up. Despite the NGO’s celebrated success, insider accounts point to failures.

When a devastating earthquake struck the Western hemisphere’s poorest country in 2010, the American Red Cross was one of the organizations at the forefront of the humanitarian effort to rebuild it a year later, launching a multi-million-dollar effort.

The main program – LAMIKA (a Creole acronym for ‘A Better Life in My Neighborhood’) – was to build hundreds of permanent homes to house some 130,000 people living in abject poverty after the quake.

An investigation by NPR and ProPublica gained access to “confidential memos, emails from worried top officers, and accounts of a dozen frustrated and disappointed insiders” familiar with how the NGO broke its promises, misspent millions of dollars, and then issued self-congratulatory progress statements. – Russia Today

For years many contributors to non-profit charities have asked the question of where the money actually goes, and in what evidence have they provided for the mission of that given charity.  However, the sad fact is that nearly all major charitable organizations are really about big business, and accomplish next to nothing while paying board members and crony contractors billions of dollars out of your charitable contributions.

Sounds like the Clinton Foundation (slush fund) doesn’t it?

Charity fraud

Fraud and misuse of charitable donations goes back a long time in America.  In fact, even when the formal mission of a charity is accomplished, many simply morph into something new to keep the money coming in.  For example, the March of Dimes started out as a simple charity to fight Polio, but when the cure was found in the 1950’s the non-profit morphed under a general umbrella of fighting ‘birth defects’.  And instead of simply saluting the achievements of Dr.’s Salk and Sabin, the leadership realized there was money to be made and re-created their charity to where they knew ‘birth defects’ would never fully be cured, and they could run their charity forever.

Non-profit charities are a multi-billion business, and the number of them in the world are like grains of sand on the beach.  And if even 75% of the money received from donations were used in a realistic and truly humanitarian manner, many ills in society would actually be taken care of without the need for governments to spend even more taxpayer dollars fighting an unwinnable fight.  And the next time you feel the emotional need to donate your hard earned money to a charity, ask yourself this… if their organizations are older than 10 years, how many actual cures or projects have they really achieved, or are they simply spending their money to fill the coffers of their cronies, or putting out common sense information that even a five year old could discover in two minutes on the internet?

Kenneth Schortgen Jr is a writer for,, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.

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