Well Rounded Investor

My journey of becoming financial independence by 35 years old

The Spooky Maths That Don’t Add Up with Charity

One of my biggest reason not to call it quit for another year and a half because I want to line everything up. One of the item that concern me the most is medical care. While I am sitting here, trying to figure out ObamaCare for myself, sifting through website like gocurrycracker.com as Jeremy attempted to model ObamaCare optimization. It is still not clear to me yet. I have a doctoral degree, with several advance math courses like Calculus I and II, and various statistic courses.

Paul Ryan, the newly elected Speaker of the House is getting a huge pay raise. (you can look at his disclosed income statement). But it is not just him 100% of all the US Senate and House Representative are millionaires. Their health insurance math is super easy. Everything is paid for 100%. You get it? Most people who are in ObamaCare are low income earners, most of them don’t hold a college degree, yet, the math for the, to get on the health plan is super complicated. This is some spooky maths.

On the side note : **Paul Ryan even mentioned that he will not work weekends and he’d go home to Wisconsin every week, you know what that means. Private jet, at the very least, first class fly on our taxes dollars. And they are talking about “cutting cost”. Haha!!

If you’ve been listening to the news lately, you barely hear anything about the Red Cross scandal, I’ve just now heard it from NPR, but in June, the Washington Post had a post on it. Red Cross has come out with their own defense. So what is the story?

The American Red Cross received $488 million in donations in response to the Haiti earthquake

That’s the quote from Red Cross website. And here is the breakdown of their spending:

Emergency Relief: $66 million

Shelter: $173 million

Health: $73 million

Cholera Prevention: $25 million

Water & Sanitation: $47 million

Livelihoods: $48 million

Disaster Preparedness: $56 million

What does Red Cross Claim of how much of the fund go to overhead?

91 cents of every dollar the Red Cross spends is invested in humanitarian services and programs including disaster relief and recovery. Items such as food, shelter, purchasing supplies, training volunteers, and staff costs needed for the relief and recovery operation are included in these costs. Only 9 percent of the funds raised for Haiti are allocated to Management, General and Fundraising (M,G & F) expenses.

Hey, 91 cents of every dollar is pretty effective right? But NPR did an interview with the ex Prime Minister, Jean-Max Bellerive, who was prime minister until 2011.

That all the money went to help 4.5 million Haitians get “back on their feet.” According to Red Cross

“No, no, not possible,” Bellerive says. “We don’t have that population in the area affected by the earthquake.”

But people in Haiti did not see any changes, no Red Cross people on the ground, nata, zil, nil, zero, other than … the infamous 6 houses they they had built.

We built 6 new homes for a pilot project outside of Port-au-Prince

So, where do I think the money go?

According to Snopes.com:

The second worst offender this year is Marsha J. Evans, President and CEO of the American Red Cross… for her salary for the year ending in 2009 was $651,957 plus expenses. Enjoys 6 weeks – fully paid holidays including all related expenses during the holiday trip for her and her husband and kids. including 100% fully paid health & dental plan for her and her family, for life. This means out of every dollar they bring in, about $0.39 goes to related charity causes.

That was only the 2009 data, with the inflation of 3-20% we are looking at $1M of salary and expenses. Expenses, I mean, private jet, private car, private cook, private everything. Anyhow, Red Cross has changed CEO several times, from Elizabeth Dole to whoever, each time, the organization is generously provide health insurance and their family for their whole entire life. It looks like Red Cross is only generous to its executive but not to the victim they are trying to help??!! Yikes!!

There is always cover up. It is much easier when you said that is the board decision to raise salary, or approve private jet. Here is the board, all 16 of them. Check out their website.

If there is only 16 of them, it wouldn’t be as bad,

30,000 employees of the Red Cross

You see, all the expenses are paid for to all Red Cross employees each time they go oversea to do work. Another big Yikes!

Remember a few years ago, some organization crack down on Federal employees were using iPod as “storage unit”. When  a regular USB cost $4-20, the iPod at the time was costing upward $300/piece? No?!! If the upper management are wasting money, do you think the little guys will hold back?

If you think it only happens at Red Cross, think again, because it happens across the board. Every time there is a natural disaster, there are a lot of scammers out there. Red Cross is “legit”, but there are many “legit” organizations that are staining the humanitarian effort.

Okay, I’m not going to say anymore in this regard. But if you donated money to the Red Cross, mad and confused. You want to be a good Samaritan. What should you do instead?

  1. Narrow your giving. It’s more efficient, for you and for the causes you support, if you donate to five organizations each year rather than 75. Your time and money will go further, you’re more likely to understand what those five groups do and they may become long-term relationships.
  2. Look for verifiable impact. Really check what the organization do with the money- How  much is it really on overhead, a true transparent non-profit organization. Red Cross refuses to be audited, because they are not a government entity. How many people does the charity help? Does it cite metrics of success? Does it cite outside evaluations or comments by scholars or journalists that can be verified on the Web? When an organization doesn’t back up its claims and relies on vague feel-good anecdotes, it’s probably because that’s all it has to offer.
  3. Volunteer, get involved, or do something more than just writing checks. Think about the skills and passions you have and how they could be put to good use. Do the charity work yourself – I have a friend from my high school class. He worked a physician in the SF area. But every couple month, he’d travel down to South America Country to provide free service. He lives on $5/day – sleeping on hammock, cold floor and occasionally someone gave him a room with a bed. He’s happy to eat rice and bean, and he said that’s more than what a family of a coffee grower there spend on themselves.
  4. Make a gift in someone’s name that will truly have a transformative impact. It is easier to see the impact when you only donate to a specific person or specific cause.

So please, go out there, donate your time, your money responsibly.

Have you been on a missionary trip?

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7 comments on “The Spooky Maths That Don’t Add Up with Charity

  1. middle_class
    October 30, 2015

    Senators and congressman should get the same medical coverage as the average American. Then they’ll make greater changes..

    Like

    • Vivianne
      October 31, 2015

      Thank you for stopping by.

      You are right about congressmen and senators need to be in the plan, so the law can be a bit simpler. 🙂 there is so much corruption in the government, not to mention the abuse of power. Then the two parties keep fighting, a great bill was sent to them, by the time it got the approval, Obamacare has clauses for painting the road side?! Just so some private companies could get kick back on the project. *sigh

      When Obamacare rolled out, it has so much problems, people couldn’t sign up. It causes a lot of public distrust. Even the lady in charge didn’t know how it works, she said she wasn’t qualify.

      Like

  2. B
    November 1, 2015

    Hi Vivianne

    I share the same thoughts as you.

    I think volunteering makes better than simply writing cheque and ensuring that we provide more emotional support than money alone. Of course, money is still key and that can help them to survive better but as a contributor, we don’t really know if the money reach the end user at the end of the day. I prefer the more direct way of helping people.

    Like

  3. Jeff
    November 1, 2015

    I am always hesitant to donate to these infomercials that I see on the television not because I don’t believe in the cause but because I am almost certain that a large amount of the donations do not actually help the cause. Anyhow, I am thankful that there is free healthcare in Canada but the federal taxes just keep increasing and healthcare here may not be as high quality as it should be.

    Like

  4. Investment Hunting
    November 1, 2015

    Thanks for this post Vivianne. It sums up how I feel about large charities. Its a business not a charity. I give money and donate my time to small local charities in my community where I can see exactly where my funds are put to work.

    Like

  5. Tawcan
    November 2, 2015

    Many of these large charities are simply businesses. I think I read somewhere the United Way CEO gets paid like over a million dollar? I’d rather see 100% of my donation going to work rather than putting to administration fee.

    Like

  6. Pingback: Good Reads – Series 3 – Investment Hunting

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