Monday, February 8, 2010

Haiti Giving: More About Wyclef Jean's Charity and Scams

When the earthquake hit Haiti and news organizations began reporting on the charities responding, we at Charity Navigator were surprised that so many news outlets were recommending donors give to Wyclef Jean’s Yele Haiti Foundation. Yes, a celebrity founded the charity, but does that automatically make it worthy of your support? This charity is a relatively new organization and it has no experience dealing with a disaster of this magnitude. As we say in our tips, charities that haven’t done this type of work before, even those with the best intentions, will have a hard time providing efficient and effective aid. We’re not the only skeptics of this group as New York Times Philanthropy reporter Stephanie Strom points out in her article about Yele Haiti.


After the Haiti earthquake last month, we immediately began posting tips to help donors avoid scams. We knew from Hurricane Katrina that whenever there is a massive outpouring of generosity, there is also an outpouring of scam artists who attempt to steal well-meaning donors’ identity and money. USA Today’s Peter Eisler reports that the FBI has already received 170 complaints about Haiti fundraising scams. His article includes several warnings that all donors need to keep in mind.

18 comments :

Greymase said...

I think it is irresponsible to place a warning (which I believe contains material inaccuracies, in particular with respect to lack of experience with disaster relief) about Wyclef Jean's charity, which has broken no laws in the same post as a warning about scams. The implication is obvious and ill drawn.

http://www.hiwaar.com said...

I believe you are here to advice and suggest. You have the expertise and tools to analyse, watch, follow up and finally recommend. In charity giving field which is vital to people lives, especially during crises, donors, I suggest, should turn to you for advice and follow your recommendations. I am a regular reader of your blog/site and I am impressed by the ratings and evaluations you assigned to charities. Such activities would have an impact of best uses of donations.
Traig
hiwaar
http://www.hiwaar.com

Hugh Locke said...

NOTE THAT I'VE HAD TO BREAK THIS COMMENT INTO TWO PARTS. PART 1:

Charity Navigator is a well-respected voice in the vetting of reputable non-profit organizations, so to be criticized on this website in this way, especially at this time of extreme need in Haiti, threatens the work we are doing for the people of Haiti. While they have not formally rated our organization, they appear to have drawn some inaccurate conclusions based on an initial review of our publicly available materials -- specifically that we have no experience in disaster relief.

It’s important that we make clear that we are uniquely qualified to distribute the donations we’ve been entrusted with. It’s also important that you understand we have a clear vision of the way forward and a plan for the long-term rebuilding of this nation.

Yéle Haiti is an authentic, grassroots Haitian organization with unique access on-the-ground because it’s run by Haitians. Yéle Haiti is composed of both a 501(c)(3) charitable organization in the US and a related NGO registered with the government of Haiti. Both the US and Haiti organizations were founded by Haitian-born Wyclef Jean.

We have a five-year track record of consistently delivering services to the most disadvantaged communities in our country. Two days after the earthquake, Wyclef was in Haiti assisting in the process of recovering the dead, and on his subsequent two trips he has organized and helped serve several thousand hot meals in Cite Soliel and Place St. Pierre with orderly line-ups by local residents. No other organization is granted the type of community access that is given to Yéle, partly because Yéle is run with the cooperation of the communities themselves. Yes, we have paid staff and a large number of trained volunteers, but the people of Haiti believe in and are intensely loyal to Yéle. Whether it’s in response to civil unrest or to natural disasters like the earthquake in January, Yéle is at the forefront of rebuilding communities in times of crisis. Specifically:

• after Gonaives was severely damaged by Tropical Storm Jeanne in September of 2004, Yéle responded in January of 2005 by partnering with the Pan American Development Foundation (PADF) to rebuild 20 severely damaged schools; we also partnered with Fonds de Parrainage National to put 3,600 children back in school in Gonaives by sponsoring scholarships for families that had lost their income due to the economic disruption caused by the storm;

• in 2005, when Cité Soleil was under lockdown by gangs, no outside aid groups (or the UN) could enter. Yéle teamed up with the World Food Programme (WFP) and was the only NGO allowed to enter and deliver food.

• in mid-2005 we again partnered with PADF, this time in a program that employed up to 2,800 people a day cleaning the streets of Port-au-Prince; the program provided paid service for thousands, which in turn helped to stabilize a volatile period of extreme violence and political unrest;

• following the global food crisis in early 2008, Yéle organized large food distributions throughout Port-au-Prince on behalf of WFP;

• following the four tropical storms – Fay, Gustav, Hanna and Ike – that hit Haiti in 2008, Yéle was called on by WFP to organize food distributions in Gonaives and Cabaret and worked with PADF to distribute food in the Southeast and Jakmel;

• Yéle created a “food for work” cleanup program in Gonaives in early 2009 that employed some 500 local people to clear canals throughout the city, paying them in a combination of food from WFP and cash.

(CONTINUED...)

Hugh Locke said...

PART 2:
Yéle Haiti also has a history of very successful collaborations with other NGOs and organizations that need Yéle’s unique capacities on-the-ground in Haiti. Past and present partners include the World Food Programme (WFP), Pan American Development Foundation (PADF), Bureau de Nutrition et Developpment (BND), Fonds de Parrainage National, One Race Global Foundation, L’Athletique d’Haiti, Haitian Education & Leadership Program (HELP), Organization of American States, Holy Trinity School of Music and others. We are also an active participant in the Clinton Global Initiative (CGI), and as the president of Yéle, I currently serve as Chair of the Haiti Education Working Group for CGI.

Since the earthquake, Yéle Haiti has used $928,000 to get immediate relief to the earthquake victims. Specifically:

• We prepared and delivered approximately 52,000 hot meals to people in tent encampments and neighborhoods in need throughout Port-au-Prince from January 24th to February 7th, with the program now continuing with hot meals every Sunday;
• We purchased two million gallons of filtered water from a Haitian water company and starting today, we will we begin delivering up to 26,400 gallons a day throughout Port-au-Prince;
• We have developed a family ration kit that contains a wide range of food items designed to complement the basic rice, beans and oil being provided by other organizations. We tested the kit with 700 families between January 24th - 26th and are now planning for the large scale procurement, packaging and delivery of these kits on an ongoing basis in rural and urban areas;
• We created a network of community leaders and elders representing 16 neighborhoods and tent encampments, and are working with these leaders to determine their needs and then coordinate the delivery of food, water, supplies and services.
• We provided a grant to the Pan American Development Foundation (PADF) to distribute a “shelter package” to the earthquake victims in the port city of Jakmel. Included were tents, water purification tablets, canteens, blankets, gloves and personal items for approximately 500 earthquake victims.
• We also provided a grant to Airline Ambassadors, a non-profit organization that has already collected, airlifted and delivered more than 500,000 lbs of medical and disaster relief supplies to earthquake victims in Haiti.
• On January 23rd, we organized an airlift of supplies to Haiti in a partnership with Federal Express and working with both AmeriCares and Airline Ambassadors. The shipment included food, medical supplies and water – along with blankets and sheets from a community collection in Miami run jointly by Yéle and Federal Express employees there. We continue to play a role in facilitating the air shipment of medical supplies, personnel and food through various organizations.
(CONTINUED...)

Hugh Locke said...

PART 3:
Our plan for responding to this earthquake includes a phased approach, addressing needs from immediate to long-term. Phase one involves providing emergency relief in the form of food and water, combined with community mobilization. Phase two continues a scaled down version of these emergency programs and adds a job creation element to help in clearing the rubble and stabilizing communities. Central to phase two is the Yéle Vert program we’ve developed in partnership with Timberland, which will focus on tree planting, agricultural improvement and environmental restoration for Haiti. Phase three addresses longer-term rebuilding and growth, supported by Yéle programs focused on education, sports, environment and the arts.

The size and scale of this current disaster has tested both the strength and capacity of our organization and as a result we’re growing more quickly than we ever could have imagined, which provides both challenges and opportunities. In response to the opportunities, we’re working hard to build capacity, expand our networks and continue to meet the needs of our people as efficiently and effectively as ever – and in response to the challenges, we’re working urgently to make positive changes within our organization and to put best practice governance in place:

• In 2009 we hired the firm of Grant Thornton LLP as tax consultants, and an independent external audit gave us a clean bill of financial and reporting health.
• We are making shifts in our governance structure to include the addition of outside, independent directors to our board (to be announced in the next 30 days)
• We have appointed the highly respected accounting firm of RSM McGladrey (Washington, DC) as accountants for our organization. They have special responsibility for oversight and accountability of the funds used by Yéle Haiti in connection with all earthquake relief programs and activities. We will release a quarterly report on how much money we’ve raised and how it’s been dispersed.

We are in the midst of an unprecedented catastrophe, even for Haiti. Yéle is urgently scaling its efforts, from being a grassroots NGO that operates with limited means to a grassroots NGO that operates at scale. As we do so, we welcome scrutiny from Charity Navigator or any other organization that seeks to help in the building of a new Haiti.

Hugh Locke, president, Yele Haiti

Moses said...

I have yet to hear Wyclef or Locke give an adequate rebuttal to the damning articles in The Smoking Gun
http://www.thesmokinggun.com/archive/years/2010/0114102wyclef1.html

http://www.thesmokinggun.com/archive/years/2010/0119101wyclef1.html

And is Hugh Locke president or consultant to Yele? Google cache still has the page, now gone from the Yele website, identifying Locke as a consultant, not president

Greymase said...

Moses, Hugh Locke is the President of Yele Haiti. The Smoking Gun made much of what are referred to as "interested party transactions" - where a person involved in the charity receives, directly, or indirectly, a benefit by virtue of his or her association. Wyclef's companies received payments THAT WERE ENTIRELY IN CONFORMITY WITH THE LAW. The IRS rules indicate that interested party transactions are permissible so long as no more than fair market value was paid and services were actually rendered. Mr. Jean stayed well within those lines. So sayeth the IRS. AMEN. This was much ado about nothing, and cost the organization and potentially the people of Haiti money. Shameful. And AGAIN shame on Charity Navigator for putting Wyclef and "scams" in the same headline! CN is better than that. They should apologize.

Moses said...

Yet another unresponsive comment. When did Hugh Locke move from consultant to president?

If Yele Haiti is so concerned about donated money not reaching the suffering people in Haiti, why did Wyclef charge Yele 30,000 USD a year for a desk in the kitchen of Jean's studio in New York? Why did Yele move headquarters to an entire 40,000 square-foot floor of New York's Exxon Building? Why do you need an entire floor of a building in downtown Manhattan?

Shame on you.

Greymase said...

What proof do you have that Yele is renting 40,000 square feet in the Exxon building? Go there. You will see they are not renting space. That is nonsense put out in the media...also, the allegation that the office space is a desk in a kitchen is from a single, non-official source. Have you compared the office costs of other Haiti related charities before suggesting that amount is some sort of outrage? You must have a love of controversy above facts. I am through with you.

Moses said...

It's public knowledge. Gawker.com has the story: http://gawker.com/5475060/wyclef-jean-gets-shut-out-of-george-clooneys-telethon-money or http://bit.ly/d6nqBS

I have other questions: what other celebrity charges his or her charity for performing at that charity's benefits at inflated prices. Put another way, why did Wyclef Jean charge Yele 100,000 USD when at the time he was drawing about 40,000 USD per concert?

Greymase said...

Read the 990s Moses. The charges were to his COMPANY, that paid the staff and singers and musicians. He can't ask his band mates to perform for free.
Also, you assume Gawker is 100% correct. They are not. Period. Full stop. If you believe that, you are beyond saving. They report what they are told and do not always verify. Read the statement in CNN from the former head of IRS Charitable giving: http://money.cnn.com/2010/01/18/news/international/wyclef_haiti/index.htm: "But tax experts say it's routine for individuals to charge their own charities, so long as services are being provided in return. "The tax rules do not prohibit related party transactions," said Marcus Owen, former chief of the IRS unit that oversees non-profits." That is not hearsay as reported in Gawker. It is law and a view into ordinary practice from an expert.

Greymase said...

Some facts: "The Exxon Building" is 1251 Avenue of the Americas. I called Yele and learned that they ARE officing there - for FREE! Their pro bono (FREE) law firm, DLA Piper, had additional space and is letting them use the space without charge. Look up the address of DLA Piper in New York. Yep. It is 1251 Avenue of the Americas. Gawker is WRONG. Could it be that they are wrong about other things? YES!

Moses said...

"From: xxx@orsaconsultants.com
Subject: Hamptons on Aug 4
Date: June 21, 2006 6:12:33 PM EDT

To: [REDACTED]
We are set to go with Friday, August 4th for Wyclef to perform. Just want to check on the "deal":

- performance fee to Wyclef of $100,000 paid via Platinum Sound

- costs for band separate, probably in the $15,000 range (fees, equipment, etc.) to be paid to Platinum Sound"

---

That from an email from Orsa Consultants, where Hugh Locke used to work.

$100,000 for Jean =himself= (so much for his claim he never took any money for himself)and $15,000 for the band and other fees.

http://bit.ly/8P95oL

As I said: shameful

Greymase said...

Put the rest of the story in..."According to someone familiar with Yele, the event never ended up happening because it got "too expensive" to produce..." So Wyclef did NOT take that money. Also, they wanted Wyclef to give a performance worth MORE than $150k to raise $150K. In that case, he may as well just give the money! And any charity that reaches out to him for piddley events should just reach into his pocket. That is pure silliness. Wyclef has no obligation to spend his professional life working for all charities (who would then doubtless pay their staff from some of the proceeds), NOR for one he started. Just because he started and supports his charity does not mean he is obligated to forego income at the whim of that charity (opportunity cost or straight donation). Moses, you are too casual spending other peoples' money.

Greymase said...

That email also allegedly comes from someone who was not an original recipient. Not too terribly reliable. I am not saying I doubt it, but hardly the Gospel truth.

GreatDomainNow said...

I have watched a lot of footage on t.v. and read about the massive relief efforts in Haiti. However, I have not seen the implementation of atmospheric water generators in the relief efforts there. These systems that harvest water from the air use UV light, Ozone, and a multi-step Water Filtration and Water Purification process. These systems produce very clean and purified drinking water from the air on a daily basis. It would seem that access to fresh water and the availability of water would be of vital concern to relief efforts, and I just thought I would post this in reference to that.

Kent Dorfman said...

I just wanted to say that I really appreciate the work Charity Navigator does. I am a Rotarian (a charity) and appreciate the way our organization keeps tabs on projects in a rigorous manner. While not impossible to circumvent, the system of international and local checks and balances Rotary uses may be a good archetype for this and other charities (or not, just my opinion).

David Warner said...

The impersonating charities is especially popular following major disasters, when concerned citizens attempt to support relief efforts but get fooled by phony emails, telephone calls, or websites pretending to be legitimate charities collecting donations for victims. Therefore, we should thoroughly scrutinize while giving the charity
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