Red Cross: Our Money's Worth When it Comes to Disaster Relief?
posted on: Tuesday, January 03, 2006
If you’ve been keeping an eye on NCRP’s webpage and the NCRP blog, you know that NCRP has been keeping an eye on the nonprofit and philanthropic response to the devastation wrought by hurricanes Katrina, Rita, and Wilma in 2005.
We’ve also been watching what other organizations have captured about the challenges in the nonprofit response, and we assume nearly all of you have seen the litany of press stories about the American Red Cross (ARC), culminating in a new investigation by the Senate Finance Committee after the resignation of the ARC CEO and the revelations about some of the ARC’s peculiar governance and accounting practices.
One might expect the Government Accounting Office to take a look at Katrina response issues, as it did after 9/11, and a few tepid statements have been released recently that touch on the nonprofit service delivery angle. The GAO’s December report, Hurricanes Katrina and Rita: Provision of Charitable Assistance (http://www.gao.gov/new.items/d06297t.pdf), highlighted a couple of interesting problems. The most significant was that the Red Cross, which the GAO described as having taken in $1.5 billion, well over half of the charitable giving in response to Katrina, was on occasion not all that present in hard-to-reach areas. This delicately worded extract from the GAO report hints at some of the problem:
GAO teams that visited the Gulf Coast in October 2005 observed that the American Red Cross did not provide relief in certain areas because of safety policies; and thus, other charities, such as the Salvation Army and smaller charities, often helped to meet the needs of those areas. The American Red Cross told us that with the American Society for Civil Engineers and FEMA, it had previously developed policies intended to protect the safety of service providers and victims following a disaster. These policies include not establishing shelters in areas that may become flooded during a disaster or in structures that strong winds may compromise. However, victims remained in areas where the American Red Cross would not establish shelters…GAO teams in Mississippi observed that the Salvation Army and smaller charities, such as local church organizations, filled many of the needs for volunteer services that the American Red Cross did not meet. Additionally, GAO teams estimated that in the Birmingham, Alabama, area, a significant portion of the approximately 7,000 evacuees were being cared for and sometimes being housed by local churches and their members.
If Senator Grassley’s committee is concerned about the Red Cross, the sector should be concerned that smaller organizations (though the Salvation Army was the #2 recipient of Katrina-designated charitable contributions after the Red Cross, though “only” $270 million compared to the ARC’s $1.5 billion according to the GAO) were willing to go into the areas and set up programs and shelter where the Red Cross wouldn’t or couldn’t. Yet, unlike the many valiant local and regional nonprofits in the Gulf Coast region doing what they could with obviously a pittance of resources, the Red Cross is a Congressionally-charted nonprofit charged with disaster relief, it is among the first recommendations of politicians when asked where caring donors might send their contributions in the wake of natural and man-made disasters (Katrina being a combination of both), and even a compulsory beneficiary of government-induced charitable donations, to wit: In December, Illinois Attorney-General Lisa Madigan offered 18 gas-gouging gas stations in the state a deal, either they ante up $1,000 contributions to the Red Cross by January 5, 2006 or face fines of up to $50,000 to punish them for their Katrina-related profiteering (http://www.sj-r.com/sections/news/stories/74473.asp).
Maybe the Red Cross shouldn’t always be the default recommendation of government officials pushing charity in place of competent government response, as President Bush did in the immediate wake of Hurricane Katrina, thanking Catholic Charities and the Salvation Army for their good work, but pitching the Red Cross (“The Red Cross needs our help. I urge our fellow citizens to contribute.”) as a preferred option for donors (http://www.whitehouse.gov/news/releases/2005/08/20050831-3.html).
Maybe joining the Senate Finance Committee’s investigation might be more appropriate for the White House rather than shilling for the Red Cross fundraising effort. What’s a Congressional Charter for if after raising $1.5 billion the Red Cross shunts the responsibility to a bunch of tiny nonprofits (plus the Salvation Army) that don’t have the Red Cross’s money but have a big chunk of mettle and courage?
The GAO has issued a couple of other reports addressing Katrina-related issues, including two looking at contracting issues (http://www.gao.gov/new.items/d06246t.pdf and http://www.gao.gov/new.items/d06235t.pdf). Most intriguing to us was the early report in September on the problems of oversight and accountability in the government’s preparation for and response to the disaster (http://www.gao.gov/new.items/d051053t.pdf). Lots of legislation popped up in Congress calling for special Inspector Generals and oversight czars and multi-agency task forces.
For both government contracting and for charitable and philanthropic responses such as the Red Cross’s, we need a real-time accountability mechanism, so that we don’t look back years from now and bemoan the problems that should have been foreseen, became all to readily apparent to observers on the ground, and could have been prevented but for the lack of watchdogs able and willing to look at the nonprofit and philanthropic side of the Katrina response.
We’ve also been watching what other organizations have captured about the challenges in the nonprofit response, and we assume nearly all of you have seen the litany of press stories about the American Red Cross (ARC), culminating in a new investigation by the Senate Finance Committee after the resignation of the ARC CEO and the revelations about some of the ARC’s peculiar governance and accounting practices.
One might expect the Government Accounting Office to take a look at Katrina response issues, as it did after 9/11, and a few tepid statements have been released recently that touch on the nonprofit service delivery angle. The GAO’s December report, Hurricanes Katrina and Rita: Provision of Charitable Assistance (http://www.gao.gov/new.items/d06297t.pdf), highlighted a couple of interesting problems. The most significant was that the Red Cross, which the GAO described as having taken in $1.5 billion, well over half of the charitable giving in response to Katrina, was on occasion not all that present in hard-to-reach areas. This delicately worded extract from the GAO report hints at some of the problem:
GAO teams that visited the Gulf Coast in October 2005 observed that the American Red Cross did not provide relief in certain areas because of safety policies; and thus, other charities, such as the Salvation Army and smaller charities, often helped to meet the needs of those areas. The American Red Cross told us that with the American Society for Civil Engineers and FEMA, it had previously developed policies intended to protect the safety of service providers and victims following a disaster. These policies include not establishing shelters in areas that may become flooded during a disaster or in structures that strong winds may compromise. However, victims remained in areas where the American Red Cross would not establish shelters…GAO teams in Mississippi observed that the Salvation Army and smaller charities, such as local church organizations, filled many of the needs for volunteer services that the American Red Cross did not meet. Additionally, GAO teams estimated that in the Birmingham, Alabama, area, a significant portion of the approximately 7,000 evacuees were being cared for and sometimes being housed by local churches and their members.
If Senator Grassley’s committee is concerned about the Red Cross, the sector should be concerned that smaller organizations (though the Salvation Army was the #2 recipient of Katrina-designated charitable contributions after the Red Cross, though “only” $270 million compared to the ARC’s $1.5 billion according to the GAO) were willing to go into the areas and set up programs and shelter where the Red Cross wouldn’t or couldn’t. Yet, unlike the many valiant local and regional nonprofits in the Gulf Coast region doing what they could with obviously a pittance of resources, the Red Cross is a Congressionally-charted nonprofit charged with disaster relief, it is among the first recommendations of politicians when asked where caring donors might send their contributions in the wake of natural and man-made disasters (Katrina being a combination of both), and even a compulsory beneficiary of government-induced charitable donations, to wit: In December, Illinois Attorney-General Lisa Madigan offered 18 gas-gouging gas stations in the state a deal, either they ante up $1,000 contributions to the Red Cross by January 5, 2006 or face fines of up to $50,000 to punish them for their Katrina-related profiteering (http://www.sj-r.com/sections/news/stories/74473.asp).
Maybe the Red Cross shouldn’t always be the default recommendation of government officials pushing charity in place of competent government response, as President Bush did in the immediate wake of Hurricane Katrina, thanking Catholic Charities and the Salvation Army for their good work, but pitching the Red Cross (“The Red Cross needs our help. I urge our fellow citizens to contribute.”) as a preferred option for donors (http://www.whitehouse.gov/news/releases/2005/08/20050831-3.html).
Maybe joining the Senate Finance Committee’s investigation might be more appropriate for the White House rather than shilling for the Red Cross fundraising effort. What’s a Congressional Charter for if after raising $1.5 billion the Red Cross shunts the responsibility to a bunch of tiny nonprofits (plus the Salvation Army) that don’t have the Red Cross’s money but have a big chunk of mettle and courage?
The GAO has issued a couple of other reports addressing Katrina-related issues, including two looking at contracting issues (http://www.gao.gov/new.items/d06246t.pdf and http://www.gao.gov/new.items/d06235t.pdf). Most intriguing to us was the early report in September on the problems of oversight and accountability in the government’s preparation for and response to the disaster (http://www.gao.gov/new.items/d051053t.pdf). Lots of legislation popped up in Congress calling for special Inspector Generals and oversight czars and multi-agency task forces.
For both government contracting and for charitable and philanthropic responses such as the Red Cross’s, we need a real-time accountability mechanism, so that we don’t look back years from now and bemoan the problems that should have been foreseen, became all to readily apparent to observers on the ground, and could have been prevented but for the lack of watchdogs able and willing to look at the nonprofit and philanthropic side of the Katrina response.
posted by NCRP at
1:32 PM
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