The current financial infrastructure and ecosystem does not allow for much transparency by regular customers. Institutions keep all information locked down on their centralized systems, and only communicate with other parties whenever it is needed. But as a customer, once you make a transaction, there is no way to see where your money goes. And sometimes, that can cause a major issue.
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Red Cross Donations Go Astray
Back in 2010, disaster struck Haiti when a major earthquake shook up the nation. Nearly one-third of Haiti’s population was affected by this earthquake, and the death toll was staggering. According to the estimates we have received, between 100,000 and 160,000 Haitians have lost their life during this tragedy and its aftermath.
It didn’t take long for international aid to get underway. Charitable organizations such as Red Cross, 12-12, Doctors Without Borders [and others] started preparing to send down teams of specialists to help wherever they could. On top of that, bank accounts were opened so people from all around the world could send a donation to these organizations, which would then be forwarded to those in need.
In total, the Red Cross society raised nearly half a billion US dollars, a staggering amountthath could have been put to good by the Haitian people. However, this is where the story takes a turn for the worse. With so many people in need of a new home, plans were drawn up to provide homes to at least 130,000 Haiti earthquake victims. Unfortunately, that never happened at all.
To this very day, the Red Cross has built a total of six permanent homes in the region, which is a far cry from the original plans they had in mind. Furthermore, Red Cross CEO Gail McGovern had unveiled plans to develop “brand new communities” in the affected area. None of these have ever been built either though.
And this is one of the major concerns when donating money through a charitable organization, even if it is one as reputable as the Red Cross. Once your money has been sent over to them, there is no way to keep track of how it is being used, or in which hands it will end up. In the case of Red Cross donations for Haiti, a lot of information has been exchanged through confidential memos.
Lack of Transparency Does Not Eliminate Accountability
From the information provided by Pro Republica, it appears that a lot of information regarding spending these donations has been relayed through internal confidential memos. In fact,these confidential memos mention topics such as “failed results”, which does not bode well for the Haitian society or the Red Cross.
There are various reasons as to why the Red Cross faced certain difficulties while trying to set up relief efforts in Haiti. Relying too much on foreigners – who did not always speak French or Creole, the local languages – is never a good idea. However, sometimes that is your only option, and you have to make it work somehow.
All of this begs the question as to how all of the donation money has been spent, as it is clearly not reaching the areas in need. Despite the allure of the Red Cross, they still have to rely on other groups to do the “hard work”. As you would come to expect, those third parties take out a small cut of every dollar being given to them. Plus, the Red Cross teams themselves also have to pay for overhead costs and expenses, which ended up costing them one-third of their total budget.
A Red Cross spokesperson told Bitcoin.com that:
“Like many humanitarian organizations responding in Haiti, the American Red Cross met complications in relation to government coordination delays, disputes over land ownership, delays at Haitian customs, challenges finding qualified staff who were in short supply and high demand, and the cholera outbreak, among other challenges.”
Call For Transparency – Adopting Blockchain Technology?
What this story tells us is that there is a clear need for more transparency in the financial world, even if it regards donations to a charitable organization. Even though some people may not value the idea of letting the world see how much money is coming in exactly, it would give everyone a clearer view of what is going on behind the scenes.
The best part about using an “open ledger”, such as the blockchain
for example, is that we can also see how fund sare being moved in real-time. For instance, if a part of the money is sent to someone else, everyone in the world would be able to track that payment and see what happens to the funds next.
On top of that, it would become easier to see where things start to go astray, in case that would happen again. Not just for us, the everyday person, but also for the Red Cross management themselves. There would no longer be a need for internal memos, keeping this classified and trying to hide behind excuses. Everyone can see where the fault lies, and who is responsible for mismanaging funds.
No one is saying the Red Cross should adopt Bitcoin as the only currency to accept donations, as that would not be the best business decision at this time. But any charitable organization can benefit from using Bitcoin – and blockchain – technology in terms of accountability and logistics. Plus, it would also show an unprecedented transparency in the financial world.
What are your thoughts on the Red Cross and whether or not charities could benefit from blockchain technology Let us know in the comments below!
Images courtesy of Pro Republica, Red Cross,and Shutterstock