With Hurricane Rita now making news, it's time for Americans to take a more
disciplined look at their tremendous generosity. As of last week, the
American Red Cross reported that it had raised $826 million in private funds
for Hurricane Katrina victims. The Chronicle of Philanthropy has the
total figure at more than $1.2 billion for all relief groups reporting. So the
Red Cross received about 70% of all giving.
This percentage was no doubt bloated by the Federal Emergency Management Agency's
mystifying release to the media of the names of 19 faith-based charities (plus
the Red Cross, Humane Society and three lesser-known groups) to which the public
should donate — rather than the much wider group of established relief
This skewed giving to Red Cross would be justified if the organization
had to pay the cost of the 300,000 people it has sheltered. But FEMA and the
affected states are reimbursing the Red Cross under preexisting contracts for
emergency shelter and other disaster services. The existence of these contracts
is no secret to anyone but the American public. The Red Cross carefully says
it functions only by the grace of the American people — but "people"
includes government, national and local. What we've now come to expect from
a major disaster is a Red Cross media blitz.
The national Red Cross reports it spent $111 million last year on fundraising
alone. And it's hard to escape the organization's warning of Armageddon
if you don't call in a credit card number or send a check or donate blood (which
it resells to the tune of more than $1.5 billion annually, part of its $3 billion
In Southern California, we have had the spectacle of "drive-by"
drop-offs of bags of money at public places such as the Rose Bowl, massively
promoted by local media. Hollywood studios and stars and corporate America compete
to make huge donations.
The Red Cross brand is platinum. Its fundraising vastly outruns its
programs because it does very little or nothing to rescue survivors, provide
direct medical care or rebuild houses. After 9/11, the Red Cross collected more
than $1 billion, a record in philanthropic fundraising after a disaster. But
the Red Cross could do little more than trace missing people, help a handful
of people in shelters and provide food to firefighters, police, paramedics and
evacuation crews during that catastrophe.
When New York Atty. Gen. Eliot Spitzer asked for documentation of 9/11
expenditures, the Red Cross' response was that it is federally chartered and
not answerable to state government regulators. The clamor rose, however,
when the media began dissecting Red Cross activities in the 9/11 aftermath.
This resulted in the resignation of the organization's president and chief executive,
Dr. Bernadine Healy, and the appointment of ex-Sen. George Mitchell (D-Maine)
to oversee its 9/11 fund and help clean up its image. Funds were then pushed
out the door — including millions to New York limo drivers who said they
lost income after 9/11, and to upscale residents of lower Manhattan to help
pay their utility bills.
The organization also ran into trouble after the 1989 San Francisco
Bay Area earthquake when it was revealed that it planned to spend only a fraction
of the millions of dollars it had collected in the area damaged by the earthquake.
When the Bay Area's mayors found out, they insisted that these funds be spent
on housing, homeless shelters and health clinics. The Red Cross had to waive,
for one time only, its long-standing policy against funding non-Red Cross groups.
(Spare change — and there will be a lot of it this time — stays
in a Red Cross "national disaster account." This allows it to spend
funds donated for one purpose on another.)
The Red Cross expects to raise more than $2 billion before Hurricane
Katrina-related giving subsides. If it takes care of 300,000 people,
that's $7,000 per victim. I doubt each victim under Red Cross care will see
more than a doughnut, an interview with a social worker and a short-term voucher
for a cheap motel, with a few miscellaneous items such as clothes and cooking
pots thrown in.
The Red Cross' 3 million unpaid volunteers, 156,000 of whom it says are deployed
in Hurricane Katrina, are salt-of-the-Earth Americans. But asking where all
the privately collected money will go and how much Red Cross is billing FEMA
and the affected states is a legitimate question — even if posed by the
president of a small relief agency.
As Hurricane Rita dissipates, let me answer my unpopular question like this:
Giving so high a percentage of all donations to one agency that defines itself
only as a first-responder and not a rebuilder is not the wisest choice. Americans
ought to give a much larger share of their generous charity to community foundations,
grass-roots nonprofit groups based in the affected communities and a large number
of international "brand name" relief agencies with decades of expertise
in rebuilding communities after disasters.
Richard M. Walden is president and CEO of Operation USA, a 26-year-old international
disaster relief agency based in Los Angeles. Website: www.opusa.org.