I cringed when I read the news of U.S. Senator Chuck Grassley’s scathing report based on a year-long investigation into the Red Cross’s handling of the Haiti earthquake response.
Not only did the mishandling of the situation mean that thousands of Haitians in need didn’t get assistance, the Red Cross’s actions add fuel to the fire for those skeptical of the international development sector. And I don’t blame the skeptics—it’s easy to get cynical about philanthropy when you see such inefficiencies and lack of transparency.
While there are plenty of things to criticize about the Red Cross’s Haiti work (as well as their response to the Grassley investigation), a portion of the blame should also rest at the feet of donors.
Now, I can’t be too hard on the donor who texts a $10 donation in the aftermath of a disaster; they aren’t experienced donors. But for foundations, corporations, and philanthropists who give large donations and—in many cases—hire professionals to maximize the impact of their giving, this should be a wake-up call. This is an opportunity for grantmakers to reflect on whether they are playing a role in raising the standards in the humanitarian sector.
If it were me, in the aftermath of the Haiti earthquake with the desire to give a large donation to help with relief work, here’s what I’d do:
DEEPLY UNDERSTAND WHAT A COMMUNITY NEEDS AND WORK THROUGH THEM
From the accounts that the Red Cross had little interaction with local residents, to the criticism that Mark Zuckerberg’s efforts to reform the Newark school system were hampered by a lack of engagement with the community, there are numerous examples of donors failing to meaningfully engage with and understand the people and the situation they are trying to help.
What I find really surprising is that this type of thinking rarely happens in the business world. Companies live and die by whether or not their product or service meets the needs of the buyer. It’s in the company’s best interest to use techniques like design thinking to observe user behavior and tailor their offering to fit what’s needed.
Yet in philanthropy this sort of human-centered design is sorely lacking. Perhaps it’s because the beneficiary is not the one actually “purchasing” the service—the donor is. But to really help people, philanthropists need to listen to what the community needs, and work with organizations and leaders located within that community in order to do the most long-term good.
Among many of the lessons we’ve learned from managing disaster responses on behalf of clients, one of the most important is that community-based organizations offer tremendous value as innovative, cost-effective partners who can act swiftly and strategically compared to large, international NGOs. Community-based organizations are immensely resourceful, using innovative methods to overcome local limitations, which is even more necessary in the aftermath of a disaster.
DON’T RELY ON A BRAND NAME
It’s increasingly difficult to separate good marketing from good impact. And it’s easy to think that an organization must be good if they’re receiving support from prominent, respected funders.
We’ve fallen into that trap ourselves. Many years ago, we helped a donor put money into a campaign to empower women’s groups in, coincidentally, Haiti. There were a lot of reports, workshops, and talk about what was going to be done. But as time went by, nothing seemed to be happening. We recommended the donor stop funding the program at the end of the first year. As we investigated where we had gone wrong, we realized that part of the decision to fund the nonprofit had been based on the fact that they had received funding from a major international organization. If this organization thought the proposal merited support, we’d reasoned, then it must be good.
From that setback, I’ve learned that there’s no substitute for doing your own digging and having a very solid process in place for due diligence. If that’s not a core skill you have, that’s an area where hiring a philanthropic advisor to do that on your behalf is worth it.
ASK QUESTIONS AND GAUGE THE WILLINGNESS TO TALK ABOUT FAILURES
There can be no trust if there’s no transparency. Ask a lot of questions during your due diligence process and gauge the organization’s openness and how they respond to your questions.
One of the things I look for is how willing an organization is to talk about past failures and what they learned in the process. After all, it’s incredibly rare that everything always goes according to plan, especially in the context of international development. Be skeptical if you don’t get a solid answer and probe more. Organizations may feel that they’ll lose funding by admitting mistakes, and there aren’t a lot of incentives for them to admit when something went awry. Our sector overall would be a lot better if there was more analysis around failures, and you as the donor can help advance that mentality by encouraging that transparency. Just as you are searching for signs of trust in the organization, make sure you are signaling that the organization can trust you not to pull funding the moment things go wrong. Be committed to an iterative learning process and constant improvement.
FOCUS ON THE RIGHT METRICS
One of the biggest criticism over the Red Cross’s Haiti response was how much went to overhead; the organization claimed 9% while the investigation found it to be 25%. Regardless of the true number, a singular focus on overhead is misguided for a few reasons.
First, it’s a number that can be manipulated in various ways. By allocating certain expenses to program work (for example, a portion of a CEO’s time can be attributed to a program), there are creative ways to bring down an overhead number.
Second, because of this fuzzy and flexible math, it’s often hard to understand what percentage of a donation goes to the local project on the ground. This to me is the only good metric to use when trying to compare various organizations and evaluate how much of your money will impact the beneficiaries.
Third, an overhead number doesn’t tell you about the organization’s efficiency in its work. I’d much rather support an organization with above-average overhead if it’s generating more impact than its peers.
You also want to understand what metrics will be used to evaluate impact. There’s a difference between counting and measuring, and it requires experience to recognize what are the right measurements that will indicate a successful program, and whether the program has the correct tracking mechanisms in place to get the right data over the long run.
PAUSE
In the aftermath of a disaster, it’s tempting to give right away. Unless you have a vetted organization that you know will use the money well, don’t rush. Take the time to assess who is doing what, and where your money can do the most good.
There’s typically a big drop-off in funding after the immediate disaster needs have been met. This is the time when communities need help rebuilding infrastructure and systems that could make them more resilient to future catastrophes. Providing funds for rehabilitation and recovery allows you to fill a gap that most others overlook, and can lead to a great return on your social investment.
I’m sure this won’t be the last time that we encounter a controversy like Red Cross’s handling of the Haiti earthquake. But if donors advocate for and demonstrate better practices, we may see fewer situations like this in the future.