Updated: May 29, 2020
BY: BIANCA BARDEN
FEBRUARY 3, 2020
WARNING: Lengthy read, but necessary to highlight the systemic lack of integrity of overall mismanagement that appears to exist within the Red Cross, both internationally and here in Australia.
"Australian Red Cross has been one of the most trusted not-for-profit health service providers in Australia for over 90 years – for good reason. You'll benefit from our ethical practices, deep experience, large network and professional team", reads the self promotion blurb from their website.
The reality though is very different.
The Red Cross has a particularly nasty reputation of raising good money after natural disasters only to continually find itself questioned over the whereabouts of the money and being asked for a breakdown of where the money has been spent.
In the United States, after Hurricane Katrina, the Red Cross raised $2.1 billion dollars. After the earthquake in Haiti, the Red Crossed amassed a total of $500 million from generous people from around the globe. It was one of the most successful fundraising events ever. Five years after the earthquake, the Red Cross' legacy in Haiti is not new roads, schools or hundreds of new homes. It's difficult to know where all the money went.
The NPR and ProPublica went in search of the nearly $500 million and found a string of poorly managed projects, questionable spending and dubious claims of success, according to a review of hundreds of pages of the charity's internal documents and emails, as well as interviews with a dozen current and former officials.
The Red Cross says it has provided homes to more than 130,000 people, but the number of permanent homes the charity has built is six.
It's not unheard of for the Red Cross to make such a claim. Not long ago, the charity hired a group of consultants to review one of its projects in the north of the country. They found the charity's math unreliable when it came to counting people it helped. There was double-counting, undercounting, and in one instance the Red Cross claimed to have helped more people than actually lived there.
David Meltzer, the Red Cross' general counsel and head of the international division, says the Red Cross took the almost $500 million and split it into sectors. For example, the organization spent $69 million on emergency relief, $170 million providing shelter and $49 million on water and sanitation efforts.
But the charity will not provide a list of specific programs it ran, how much they cost or what their expenses were.
Any wonder, when you read Employee Reviews. They paint a scathing picture of the corruption and dishonesty that seems to be just a part of the everyday culture.
And it isn't just America that has problems within the Red Cross. The UK revealed that some of the executives are pulling in salaries of up to 184,000 pounds (AUD $357,260). The number of executives earning in excess of 100,000 pounds ($194,127) has soared from 19 to 30 since 2010.
In 2017, the UK Red Cross was forced to apologise for more than $5m pounds of aid money that was lost to fraud and corruption during the Eboloa epidemic. Auditors found overpriced supplies, salaries for non existent aid workers and fake customs bills.
As Ebola spread across Liberia, Sierra Leone and Guinea, the Red Cross Federation in Geneva was dispersing cash donations to the national Red Cross societies in each of those countries - altogether a sum of about $100m.
An investigation by Red Cross auditors has revealed that in Liberia $2.7m disappeared in fraudulently overpriced supplies, or in salaries for non-existent aid workers.
In Sierra Leone, Red Cross staff apparently colluded with local bank workers to skim off over $2m while in Guinea, where investigations are ongoing, around $1m disappeared in fake customs bills.
Hoarded money again seemed to be the problem for the Red Cross when it came to assisting the residents of the doomed Greenfell Tower. 4.7 M pounds was donated to the Red Cross, of which only 16 people received help that totalled 158,000 pound, a small fraction of the total.
Now it appears the same level of questions are being raised at The Australian Red Cross.
The Australian Red Cross is registered with the independent national regulator of charities, the Australian Charities and Not-for-profits Commission.
During the current bushfire season with the promotion of the publicly funded ABC, the Red Cross raised $127 million, raising twice as much as any other organisation.
That is in addition the $47M in grant money that the Red Cross receives from the federal government.
Then there is the $36M from the state government.
Don't forget the Community contributors, made up mostly of large corporations, that are honoured with a mention on the Red Cross website if they have donated more than $50,000 in cash or in kind. There are 30 corporates on the list, and at a minimum of $50,000 per corporate, that's a tidy sum of 1.5 million.
Then there's the added little fringe benefit of 223 corporates who are part of the Red Cross giving program, enabling employees to donate $900,000 through their payroll system. The top ten workplace giving partners there were ANZ, Telstra, NAB, Lion, King Wood & Mallesons, IAG, Price Waterhouse Coopers, St George Bank and Orara Business Services. How many people that donated to the current Bushfire Appeal forgot that they already give to the Red Cross through their wages, and gave again?
To date, the Red Cross has only distributed to bushfire victims $30 million out of $127 million raised.
On the 22nd January, The Australian media started to question why the Red Cross were withholding so much money compared to what had been donated. At that time the Red Cross had paid out $30M by way of $10,000 in emergency grants for those whose homes were destroyed. $20,000 bereavement payments were amiable to the next of kin so someone who is bereaved for funeral and related expenses. The Red Cross outlined that they were planning on withholding the money for a minimum three year recovery program.
However, on the 3rd February, their website was amended to announce an additional $10,000 payment on top of the $10,000 already available for people who have lost their homes, $7,500 for people that were hospitalised as a result of the fires and $5,000 to repair structurally damaged homes, bringing it to a total of $61 million spent on immediate relief, well short of the $127 million that the Red Cross has taken in.
Why were two separate lots of $10,000 given? Why not just a one of $20,000 payment? Surely double payments mean more administrative work? It's almost as though the negative media exposure forced their hand in making the second additional payment.
Recently, the Red Cross conceded that up to 10% of all donations would be set aside for administration costs, a total of $12.7 million, claiming it had always been upfront about this. St Vincent De Paul, in comparison, said it would not take administrative fees for its emergency appeal.
The Red Cross is also at odds with its own promise last year to put 100% of donations from its "HELP AUSSIE FARMERS" towards helping severely drought-affected farmers.
It would appear that $12.7M isn't enough to cover their administration costs, as The Red Cross are still advertising in JB HiFi stores under the pretence of assisting bushfire victims, only now they are advertising their intent to take an administration fee out of your donation. They just won't specify exactly how much that administration fee will be, and they have labelled it as "supporting our volunteers and covering their expenses". The public becomes annoyed when hearing that 10% of donated money is going in administration, but who can get angry at volunteer's right? The Red Cross are nothing but sly when the it comes to exploiting the publics emotions for their own person gain.
As it currently stands, the Red Cross has stated that the remaining two-thirds of the money will be kept for long-term emergency management.
Most people that donated to the Australian Bushfire Appeal would have done so believing that 100% of their money was going to help victims of the bushfire, and in fact probably believing that the Red Cross' main work is helping out in a national emergency.
This is far from the truth.
The Red Cross has an intent focus on assisting refugees and reconciling with the Indigenous. So when one donates to the Red Cross, how is one assured that their money is going specifically to help bushfire victims and not refugees?
While bushfire victims wait for the money that was donated to the Red Cross for them, the Red Cross has already moved on to its next humanitarian mission - The Coronavirus. In keeping with its faltering reputation, problems have already surfaced with the Red Cross in China. This is nothing new. In the wake of the 2008 earthquake in Sichuan province, the Red Cross was criticised for allegedly misusing public donations .
How is this level of mismanagement allowed to go on time and time again and emergency after emergency? It's almost as though there is nobody to oversee the corruption that is occurring on what can only be described as a world wide systematic level, and if there is, that they are following suit by turning a blind eye.
The Australian Charities and Not-for-profits Commission (ACNC) is the national regulator of charities. The ACNC was established in December 2012 to achieve the following objects:
maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector.
As part of our compliance role, and in investigating concerns raised about charities.
The ACNC regulates charities under the ACNC Act by:
providing guidance, education and advice to help charities meet their legal obligations
monitoring charity compliance and managing non-compliance
The ACNC monitors how registered charities comply with their obligations as set out by the ACNC Act.
The ACNC works across the whole of government to address risks that pose a threat to trust and confidence in the charity sector. They use tools and approaches to proactively identify trends and emerging risks in the sector.
When charities do not meet their obligations, the website states they take appropriate action proportionate to the problem they seek to address.
It would appear that this regulatory agency is nothing but a toothless tiger at best, put in place to give donors reassurance of accountability, when in reality, they appear to do nothing more than turn a blind eye. In fact, at best they only seem capable of acting when the general public have already lost complete faith in the charity, instead of preventing the public from losing faith to begin with.
People have become extremely sceptical about donating to charities, particularly the Red Cross, and after examining the world wide systematic cases of corruption, mismanagement and outright fraud, it would seem they have every right to be sceptical. The Red Cross website states that the Red Cross has long experience in managing donations with integrity and undertaking effective distribution. That's a bold statement when thus far all evidence is to the contrary.
It's ironic that the very charity, chartered with assisting with epidemics and emergencies, is the same charity that has its own epidemic and systemic levels of corruption, mismanagement and in some cases outright fraud.
The ongoing trust issues that lies with the Red Cross need to be rectified as a matter of priority before the public can even think about donating again. The public demand better, but more importantly, the victims deserve better.
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