Red Cross Dispels Financial Woes, Reveals Haiti Efforts

WASHINGTON – American Red Cross President and CEO Gail McGovern outlined accomplishments and future goals on the one-year anniversary of the earthquake that devastated Haiti.

McGovern put off accusations that the Red Cross was not spending Haiti relief money fast enough with a full report detailing last year's efforts to provide food, shelter, and clean water despite mass devastation and an unexpected cholera outbreak.

Speaking at the National Press Club Wednesday, she shared with members of the media that the Red Cross received donations totaling $479 million for relief in Haiti. So far, she said, Red Cross has spent over half of that money supplying tents, cots, latrines, medical supplies and personal grants.

In just a year, the American Red Cross supplied enough ready-to-eat meals and food program subsidies to feed 1 million people, clean drinking water for 317,000 people, emergency shelter for 860,000 people and latrines for 265,000 people living in camps.

Despite their efforts, McGovern recalled being questioned about whether the Red Cross is spending the money fast enough to meet the needs of impoverished Haitians.

She replied that at its current rate, the Red Cross is spending an estimated two-thirds of a million dollars each day to supply the needs of Haitians. However, she said the response group is electing to spend the money wisely, not hastily, in order to ensure a lasting impact.

"Whenever I make decisions, I try to imagine that our donors are sitting right there at the table with me and I ask [myself], 'Would they be happy with the way we're spending the money?' 'Would they approve?' and 'Will it help people in need?'" McGovern said of her decision-making process.

A year ago Wednesday, Haiti was rocked by an earthquake 7.0 magnitude in scale. The quake pancaked thousands of houses throughout the country but particularly in Haiti's densely populated capital, Port-au-Prince. An estimated 316,000 people were killed. Another 1.3 million people were left homeless.

Before the disaster, Haiti was already an impoverished nation. Before the quake, only one in three people had access to pumps with clean drinking water. Also, only 20 percent of the country had access to latrines or toilets.

McGovern recounted that when she first visited Haiti no one smiled. Now, she said, because of the assistance that the Red Cross has provided, the people are smiling again as they try to rebuild their lives.

During the talk, McGovern assured donors of the American Red Cross that it had tightened its financial practices and that money was going directly to those in need. This is a crucial point for the American Red Cross.

For years, news swirled over its head about financial mismanagement and, in some instances, downright fraud among the organization's local chapters.

In 2002, fraud cases in two different Red Cross chapters revealed that the corporate office enforced little control or oversight over local chapters. In 2005, fraud allegations at a privately-run Red Cross call center set to help Hurricane Katrina victims get subsidies renewed donors' hesitation to give to the organization.

However, McGovern shared at the meeting that it was taking steps to create a leaner organization focused on fiscal responsibility.

"I'm very pleased to let you know that after a great deal of cost-cutting, consolidation and streamlining that we closed our fiscal year this past June and we did so with a moderate surplus," she outlined.

On the field, the Red Cross is making the effort to track all of the money. McGovern revealed that it is being choosy of the local partners it gives to. The response group is also making sure it gets detailed information from its partners to ensure that all money spent is spent properly.

In addition to that, McGovern divulged American Red Cross efforts to reach out to donors and show them transparency.

It raised $42 million last year in text donations. The Red Cross then used those to issue text alerts updating members of how the money was being used in Haiti. It also reached cellphone donors with subscriptions on further updates to hopefully enlist lifelong givers.

"We are continually seeking ways to be efficient in order to be outstanding stewards of our donors' dollars," she said of the organization's efforts.

Having re-established itself financially and in the eyes of its donors, McGovern revealed future plans to use the second portion of the funds raised for Haiti's long-term recovery.

The Red Cross seems to now be focused on creating jobs among the Haitians and building and rebuilding permanent shelter.

After the Haitian government prohibited further food aid, the group created a work for food program for Haitians. It also worked with a local micro-finance group to give residents money to do things such as return to school or rebuild collapsed businesses.

In the coming months and years, the Red Cross will focus its efforts on rebuilding the country's infrastructure. This includes an investment of $100 million in permanent housing, according to McGovern.

She also announced a planned partnership with the U.S. State Department through the U.S. Agency for International Development to spend as much as $30 million to build homes with water and sanitation in two locations to be identified.

The Red Cross also plans to spend as much as $15 million to construct homes on land being identified by the government of Haiti in partnership with the Inter-American Development Bank. This project is expected to include roads, sanitary systems, electricity service and other infrastructure.

Despite the focus on Haiti, she also reminded the audience that the American Red Cross responded to 70,000 disasters in addition to the earthquake in the small French-speaking island. These disasters included domestic challenges such as floods and forest fires.

McGovern said of these disasters, "These seemingly ' small' disasters may seem small, but if your family is impacted, there are epic proportions."

McGovern could not project when Haiti would become self-sufficient. But she conjectured that it likely would take several years.

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