Sanjay Rawal, Yele Haiti's founding executive director, resigned in 2005 citing Wyclef Jean and his fellow board members' "lack of financial commitment" to the organization. Here is his full resignation letter:
Strategic Forecast for Yéle Haiti
It is always difficult writing something to friends that might be perceived as negative, but I feel that as more than a friend, as a brother , for the sake of your future charitable endeavors, some very important issues be brought to light right away.
I gave you guys 14 months of my time. I know this letter is long. I am just asking for 8 minutes of your time. I think it is in your best interest.
I love you guys, but my reasons for participating have always been for the children of Haiti, not for the glamour, not for the people, not for the parties or the lifestyle. As Wyclef and Jerry know, I am more than happy being a "monk".
It is time that the Board make a serious financial commitment to Yele instead of depending on others. Without this commitment (of just $50k per person) no one will take your charitable endeavors seriously (believe me, I deflect a lot of these comments). I realize that you have spent money Haiti, but that is not necessarily charity. Some of your spending has been good, but none has been strategic. You have to forget all of that and lose your sense of entitlement. Charity is charity. It is not a way to be paid back for past charity.
Celebrity charities are run with the tax money of the celebrity founder. In 2005, when the IRS has allowed for a 100% donation of income due to Katrina, if the board cannot find money to donate to Yele, Burt should be fired. You may say there are back tax issues, but any real accountant knows that donations made in 2005 can help alleviate back tax issues. The board does not care about things like this, does not care about funding their own charity, and this makes their dedication very suspect, when it shouldn't be suspect.
I know your hearts and intention, but as one philosopher said, "execution of intentions lasts in people's minds not mere wishes."
Yéle Haiti has enjoyed tremendous project success over the past 10 months and is beginning to leverage its popularity in Haiti in the circles of development in the United States.
While Yéle's success in Haiti is due in good part to Wyclef's name being attached to the foundation, its inroads in the United States, other than in the entertainment community, have been based on the novelty, structure and administration of the projects themselves.
Wyclef's name has only begun to be leveraged in the United States entertainment community. Its full potential is a factor of Wyclef's personal success over the next 3 to 5 years.
It has also been clear that the foundation is very valuable to Wyclef's image and hence if leveraged very profitable to his career. Through the foundation's activities, he has received coverage in publications from which he has been absent for years, including People Magazine, US Weekly, InTouch, Celebrity Living and Star. True, he is in urban gossip rags but his last mention in People was from early 2004.
Seth has even integrated this charitable aspect into Wyclef's PR plan.
Yéle's administrative structure, comprised of one Executive Director, a consultant (Dina Parks) and Orsa Consultants has been overseeing all operations in Haiti as well as directing strategy in the United States.
Yéle's model of using the position of Executive Director to liaise between the project side (Orsa) and the Board (Wyclef et al) has ensured successful execution of the Board's directives as well providing background and context for issues and problems surrounding projects.
Every successful foundation is started with board capital. This under-utilization of Orsa shows a lack of financial commitment from the board especially considering the net worth of the board.
The board has never invested into Yele. True, the board has given to Haiti, but why continue giving to Haiti in such a haphazard manner when one's own foundation is suffering from lack of funds?
I realize Seth has plans to raise capital, but unless the board is willing to invest in their own charity, I doubt that anyone else ever will... I hope I am wrong.
Natabara Rollosson has left. I am leaving.
Limitations of Organizational Structure
With a new personal PR structure in place for Wyclef, Yele needs one dedicated staff person to liaise with Wyclef's PR machinery and to provide administrative services to the Executive Director.
Yéle also needs one person in charge of bookkeeping and legal administration/compliance.
Yéle's Executive Director should only be concerned with providing support and direction to the Board.
Normal corporate CEO's focus on the staff and operations. A foundation's Executive Director's focus should be only on the Board.
The director of a foundation needs to focus his attention on mobilizing the Board. A corporation's strength is in its staff. A foundation's strength is in its board.
Financial Impediments to Success
Yéle has been operating on a skewed fundraising strategy, seeking unearmarked funds solely from corporate donors and private individual donors.
With such basic operational needs, Yéle need not depend on outside sources.
With three wealthy directors, Yéle's entire operating expenses could be funded by a one time annual commitment from each Director. With that $150,000, the entire amount raised from outside sources could have been funneled to projects. Again, donations are TAX DEDUCTIBLE!!!!!
Does anyone realize that if the Board had invested into Yele we never would have had to do any fundraisers? We could have, but only to raise funds for projects. Staff would have been paid AND the music studio would have been built for the children!
Similarly, as Yéle grows, the Board should grow. There should be a financial commitment required of each board member. The norm for such a high profile foundation is $50,000.
Yéle can still commit to raising unearmarked funds from the public, but if the Directors do not make a strategic financial contribution, their interest and dedication will always be suspect to doubt.
Right now, the Executive Director has tremendous pressure, having to pay bills, solicit funds to pay those bills and satisfy vendors. As the Executive Director predicted, that model has become disastrous.
The role of the board is specifically to fundraise. The board did an admirable job for the Hampton's event, leveraging personal resources (Cary and via Cary, Peggy Siegal). Though the board sold less than 10 tickets personally to the event, Cary's name brought a number of people...
In Chicago, however, the board did not make any efforts to assist in preparations or ticket sales. They offered advice from time to time mostly about aesthetics but did not make an effort to see how they could help. It was like a Monday morning quarterback giving advice.
A legal dilemma presented a problem several days before the event, for instance. The board did not even assist in securing counsel. The accountant and his law staff appointed by the board misfiled paperwork and did a shoddy job overall, hampering the last minute hurdles presented by the Attorney General's office in Chicago. The Executive Director had to leverage contacts in Chicago (one lady in particular who was treated extremely rudely by a board member). This lady saved the event and prevented a huge fiasco from occurring.
The board did not show enough (if any at all) appreciation to the team on the ground in Chicago nor did they respect the fact that room and board charges were on the Executive Director's credit card. A number of incidental charges were wrongfully placed on his card as board members neglected to leave their credit cards at the front desk of their hotel for example even at the insistence of the hotel.
This attempt, even if unconscious, to saddle the Executive Director and/or their own foundation with illegitimate debts and charges in unpardonable.
When a person runs a foundation, people need to leave their sense of entitlement at the door. When Bill Gates goes to a charity event, he does not bill his hotel to his charity.
Having the charity pick up the tab for a wife being picked up at the airport is appalling.
Just because a person is paying for business expenses too, that does not entitle them to free trips on a charity. There can be absolutely no commingling of business and charity.
Outstanding invoices for the Chicago Fundraiser amount to over $70,000. The two planes were 60k (one of which is in dispute). Carol Ann Ross is owed 9k (she was brought in at the insistence of a board member. She did nothing other than bring in table cloths). Ogilvy PR (with which the Exec Director has a dispute) is technically owed 8k. The Executive Director will pass these accounts over to the board.
The board seems always to be focused on aesthetics not funds being raised. As in the Hamptons, the focus has been on style not funds raised (no auctions, etc.) In Chicago Seth only showed concern about the look and style and never assisted materially with ticket sales. The 3 board members also charged their plane fare and hotel bills and food to the charity and tried charging incidentals to the foundation as well.
The amount of press, however, was phenomenal. And one cannot discount the incredible value of this as Wyclef has not been in tabloids like US Weekly, InTouch, or People for sometime.
The strategic value of these fundraisers for Wyclef cannot be belittled.
The production success of the 2 fundraisers in such a short period of time also has built a brand for Yele's future events worth hundreds of thousands of dollars.
Adam Resnick ended up spending close to $30k out of pocket, by the way while the board planned on spending NOTHING. This is so ridiculous, I don't know whether to laugh or to cry.
If your name is attached, get involved. I made it very very clear to Seth before Chicago that I was not doing the Chicago event. I was only reporting to him and Adam. I did everything asked of me. I refuse to shoulder the blame for any of it as I did for GLO (which remember was done as an awareness event, as per Wyclef and Marcy Simon, but I took on all the expenses). Adam, again, spent 30k of his own money for this event. His time and effort cannot be belittled. He garnered contributions from all of his friends, brought in a foundation like Childrens Memorial Hospital (that has an 80 million dollar endowment).
When the top is not solid, there is a tremendous ripple effect on the bottom.
Creation of the Board
Last year's activities have introduced Yéle to a number of board-worthy individuals including Andrea Kerzner, Ben Bram, Laurence Bigio, Magic Johnson, Daphna Ziman, Ken Lombard, Pepe Fanjul and Ralph Isham.
Wyclef cannot repay their favors by serving on the board of their foundations, but he can offer appearances to them.
Yele should also have a lawyer on the Board or someone at a law firm. Jan Dubin has gone above and beyond her duty in procuring pro bono services from the 3rd largest firm in the nation, DLA Piper. She should be a non-paying member of the Board to ensure DLA's continued service.
Again, the board cannot be created at such a high level with Yele's current funding practices.
Yéle's fundraisers are an important awareness tool as well as powerful fundraising application. They can be used for a portion of unearmarked funds, but ideally, the funds should be used entirely for projects...
The success of foundations is based on a percentage, the ratio of administrative costs to overall costs. The smaller the percentage, the more trustworthy the foundation. Foundations that spend all the money they raise simply to pay expenses have a very low standing.
Yéle's fundraisers can raise $1 million each. The PR value of donating that entire sum to Haiti is too good to pass.
Yéle's operational/administrative costs should be paid by the Board (that is the reason for having a Board). Yéle's project administration is taken as a percentage by Orsa from earmarked funds.
This strategy of creating a Board to eliminate the constant need of Yele and Orsa to focus on collecting donations to pay their expenses will allow the focus of Yéle's staff to be on Haiti. The strength of the expertise of Yéle's staff lies in project adminstration and development strategy.
The strength of a Board always lies in its ability to raise funds.
I, Sanjay Rawal, am resigning as Executive Director as of October 31st and as a member of the board.
You know that I had never intended for this position to become full-time. When I had joined, the focus was on a December 4th 2004 concert. When that date had been delayed, I had advised that the foundation take on a more permanent focus and I stayed on to make sure the foundation made that transition.
I do feel that my role has finished. The foundation is in a wonderful place, project wise. Again, I have always done this for Haiti, not for Wyclef, not for Jerry, not for Seth, but for the children.
I do feel the children are much better off in Haiti and have figure they can look to for inspiration and hope and material support in Wyclef.
My most sincere wish is that the remaining 3 members of the board take the foundation as seriously, from a financial standpoint, as I have. I have put tens of thousands into operational expenses, all of which could have been avoided with nominal input from the other board members.
Last year I made 60k after dropping all my contracts to work on Yele. I was forced to spend 45k to keep Yele afloat. The board makes 60k in less than a week, if not in one day! Again, if the board had put in funds, I never would have had to take the GLO party on my shoulders.
In addition, I bear the brunt of all travel expenses for myself and sometimes for others as well as the burden of the Chicago fundraiser for which I put 40k on my personal card.
As far as I know, the board has only put in $12,700, plus Seth's unreconciled amount of about $1500. Jerry put in 10k for Orsa's initial fee last fall and $2700 in photography fees. Jerry might remember the 20k for Red Carpet Media who produced the Dec. 2004 GLO event, but that money came from the unearmarked 80k from ComCel.
Some board members might wish to count travel expenses as contributions and that is fine, but the more strategic method of that contribution would have been as a one time yearly contribution, out of which money could have been budgeted for travel.
Some board members may consider their business contributions to Haiti as part of their giving, which is fine. This only hurt me personally as I saw hundreds of thousands of dollars going to business needs and nothing going to the charity, when it seemed that part of Wyclef's new PR strategy focuses on his charitable endeavors. I felt Yéle was being suffocated.
Yéle has never been able to establish a budget for US operations because there has never been guaranteed cash flow.
The model of getting all of Yéle's funds from outside sources is not working and has never worked for any foundation.
I am deeply apologetic for leaving Yele at a time when the financial burden is so dire. I feel however that this is an excellent opportunity for Yele to take the next step and to hire an Executive Director with realistic expectations.
I feel it is an excellent time for the board members of Yele to shed their sense of entitlement. Stop thinking that Yele will pay you back for the money you put into Haiti. You must ask yourself why you are doing all of this. To be paid back? I do not think that is why you are doing any of this.
I realize that the studio is a pressure as is the whole music world. Everyone has pressures, but when you take on something, you need to take responsibility for it.
You need to shed this sense of entitlement. You need to put in money and then closely monitor the budget. With no money there can never ever be any budget.
I feel it is also time for Yele to restructure. Marc can help all of this.
My departure will only expedite this necessary process I feel.
My last word of advice is this: you lost Natabara Rollosson. I am leaving. Do not lose Hugh Locke. Treat him fairly. Do not take advantage of him like you have taken advantage of me.
I have not sent this to the board of Yele in Haiti because the facts are too embarrassing.
On a personal note, I really love all you guys and would like to keep the relationship open. But this can come as no surprise to anyone. I have intimated my feelings since last July.
I thank you for your brotherhood and love and concern and wish you all and Yéle, which will always be dear to my heart, God's very best.