DATELINE: June 5, 2008, Chicago
People should get off the American Red Cross' case. According to Stephanie Strom of the New York Times, the Red Cross has been busy raising funds to assist victims of tornados that struck northeastern Iowa last month. Red Cross in New Dispute Over Disaster Relief Funds. Isn't that what we expect of the American Red Cross?
In recent years, the media has portrayed the Red Cross as a disorganized and ineffective bureaucracy. Red Cross officials must...
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be in love with Strom today. She depicts them as a fundraising juggernaut. They raised $255,000 for Iowa tornado relief, and kept going, apparently topping out at $400,000. Their initial budget called for somewhere between $300,000 and $350,000 of expenditures, but Red Cross officials say total expenditures are now higher. The Red Cross sure looks fiscally responsible to us. They have covered their estimated expenditures in responding to the Iowa tornados.
Now community leaders are unhappy with the Red Cross because it is competing with their own fund raising efforts. If our house had been destroyed by a tornado, we would not be happy to hear our local community leaders complain about competition in raising money to help us. Yet, that disturbing attitude certainly is reflected in the following comment:
Everywhere I turn, the Red Cross is there like a giant vacuum cleaner, sweeping up every dollar they can.
Community leaders are running their own fundraising campaign and they apparently believe that the Red Cross is reducing the amount raised by the community's own campaign. Is this a question of who receives credit for the funds raised, the locals or the outsiders?
Maybe we have it wrong. So the Red Cross is supposed to respond to the disaster in Iowa, but it is not supposed to raise funds from the community to cover its costs. The question: Then how exactly is it supposed to cover its costs?
Following 9/11, the Red Cross and other disaster relief charities were effectively prohibited from cross-subsidizing one disaster with excess amounts raised from another disaster. That may be the legal and technical answer, but it poses a practical problem for the Red Cross. In an average year, it responds to somewhere around 75,000 house fires. Nobody flocks to Web sites or holds telethons for the victims of those house fires. But if your family is the victim of house fire it is in the exact same situation as a family who loses its house to a tornado or hurricane that garners national attention. The family dog is dead, the wedding photos are gone, and the kids have no place to sleep.
So how does the Red Cross pay for the services it provides? It does the best it can. So it is only natural that the Red Cross would look to fortunate Iowans who survived the tornados with their houses entact to provide funding. The national media has a short attention span so it is unlikely people across the country are going to see the pictures of victims frequently enough to pony up. Wouldn't the people closest to the devastation be the best candidates to ask for help? We would think so.
What community leaders are effectively saying is that they want the Red Cross' resources, but someone outside of the community should pay for those resources. That's nonsense. Community leaders can complain when they come up with a viable plan for the Red Cross to finance its disaster relief activities. In the meantime, finance is finance. Disaster relief involves the immediate response and rebuilding. The aggregate costs are the same no matter who finances them. If there isn't enough money to meet both sets of costs, that is a question of generosity and compassion. That isn't the Red Cross' problem. It is an intermediary.
And we have no problem if the national organization takes an overhead or administrative fee out of the amounts raised in Iowa. It takes a corporate structure and planning to be able to respond anywhere in the country on an hour's notice. The Iowa victims appreciated that overhead when the Red Cross arrived with food and temporary shelter.
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