Felix Salmon of Reuters is one of my favorite bloggers but respectfully, I think he is off base in his post last Friday about Haiti, especially the headline: Don’t give money to Haiti.
Disclosure: NYSE Euronext last week announced we were making a contribution through the American Red Cross, French Red Cross and UNICEF. I write this not to defend our action (though I think it is correct), but to argue against the “don’t give” idea, which oddly puts Felix in league with others who are advocating the same inaction for reasons of bigotry and politics. I know Felix from his writing to be a volunteer to good causes. I think his intent here was good but his piece misses the mark.
Here are excerpts from his post, with my annotations:
Don’t give money to Haiti
Grabby headline,but not really supported by Felix’s main point, which is that we should give money effectively, and selectively, not indiscriminately.
Between the Twitter campaigns and the telethons and the corporate donations and the record sums raised through text messages, you can be sure that an enormous amount of cash is going to end up being raised to help Haiti. This is not necessarily a good thing.
For one thing, right now there’s very little that can be done with the money. There are myriad bottlenecks and obstacles involved in getting help to the Haitians who need it, but lack of funds is not one of them. For the next few weeks, help will come largely from governments, who are also spending hundreds of millions of dollars and mobilizing thousands of soldiers to the cause. But with the UN alone seeking to raise $550 million, it’s going to be easy to say that all the money donated to date isn’t remotely enough.
Just because all the money cannot be employed immediately doesn’t mean we shouldn’t give now. To wait is to run the risk that public attention will move on to other causes, and in the end there wouldn’t be sufficient money for the sustained effort that Haiti needs. Various organizations will employ the donations as they can. I discussed this issue with my colleague Steven Wheeler, who directs the NYSE Euronext Foundation, and he pointed out: “There is relief, and then there is recovery.” After the emergency, there is infrastructure to be rebuilt — roads, schools, medical facilities, sanitation systems — a process that will take years and continued effort.
The problem is that Haiti, if it wasn’t a failed state before the earthquake, is almost certainly a failed state now — and one of the lessons we’ve learned from trying to rebuild failed states elsewhere in the world is that throwing money at the issue is very likely to backfire.
The failure of the Haitian government to help its people both before and after the disaster is all the more reason to support the efforts of charitable organizations to help people in a direct manner outside the government’s channels.
What’s more, charities raising money for Haiti right now are going to have to earmark that money to be spent in Haiti and in Haiti only. For a Haiti-specific charity like Yele, that’s not an option. But as The Smoking Gun shows, Yele is not the soundest of charitable institutions: it has managed only one tax filing in its 12-year existence, and it has a suspicious habit of spending hundreds of thousands of dollars on paying either Wyclef Jean personally or paying companies where he’s a controlling shareholder, or paying his recording-studio expenses. If you want to be certain that your donation will be well spent, you might be a bit worried that, for instance, Yele is going to be receiving 20% of the proceeds of the telethon.
Meanwhile, none of the money from the telethon will go to the wholly admirable Medecins Sans Frontieres/Doctors Without Borders, which has already received enough money over the past three days to keep its Haiti mission running for the best part of the next decade. MSF is behaving as ethically as it can, and has determined that the vast majority of the spike in donations that it’s received in the past few days was intended to be spent in Haiti. It will therefore earmark that money for Haiti, and try to spend it there over the coming years, even as other missions, elsewhere in the world, are still in desperate need of resources. Do give money to MSF, then, but if you do, make sure that your donation is unrestricted. The charity will do its very best in Haiti either way, but by allowing your money to be spent anywhere, you will help people in dire need all over the world, not just in Haiti.
Now Felix is arguing that we should give money, but to the right causes, and that we should not restrict our donations to address specific events. No argument on either point, but both conflict with the headline.
The last time there was a disaster on this scale was the Asian tsunami, five years ago. And for all its best efforts, the Red Cross has still only spent 83% of its $3.21 billion tsunami budget — which means that it has over half a billion dollars left to spend. Not to put too fine a point on it, but that’s money which could be spent in Haiti, if it weren’t for the fact that it was earmarked.
We shouldn’t let the perfect be the enemy of the good. To use Felix’s numbers, the Red Cross has spent $2.66 billion in connection with the Asian tsunami — no small amount of money. The remainder will be spent as new and ongoing projects merit. I called the American Red Cross, and spokesperson Carrie Housman echoed what my colleague Steve said: rebuilding is a long-term process. The Red Cross has been in Haiti since the 1930s, and is very familiar with how to get things done, she said. She also acknowledged, to Felix’s real point, that the Red Cross prefers to get untrestricted donations to its International Relief Fund, to give the organization flexibility to address multiple priorities.
It’s human nature to want to believe that in the wake of a major disaster, we can all do our bit to help just by giving generously. And if there’s a silver lining to these tragedies at all, it’s that they significantly increase the total amount of money donated to important charities by individuals around the world. But if a charity is worth supporting, then it’s worth supporting with unrestricted funds. Because the last thing anybody wants to see in a couple of years’ time is an unseemly tussle over what happened to today’s Haiti donations, even as other international tragedies receive much less public attention.
Here Felix makes writing a check to charity seem like just a way to ease our conscience, to check a box that we’ve done our duty. I see it as doing what we can, which is to support the organizations that are in the best position to help Haiti. The process and the results might not be perfect, but that doesn’t mean they won’t be to the good.
