Whenever there is some global catastrophe, we break out the checkbook, sending a donation to the Red Cross. Whether it’s an earthquake in Haiti or a tsunami in Japan, many people’s natural inclination is to send money to one of world’s best-known charities.

Superstorm Sandy hit the Northeast U.S. in October 2012, devastating parts of New Jersey and New York. It did damage up and down the eastern seaboard. According to the National Oceanic and Atmospheric Administration (NOAA), the total property damage amounted to $65 billion.

Americans are especially generous following natural disasters. They sent $312 million in donations to the American Red Cross after the storm. Unfortunately, the charity hasn’t been very forthcoming in how it spent that money. It seems to be stonewalling ProPublica, which has been writing about how post-Sandy money has been spent. Continues here

Category: Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “Why I am Crossing Off the Red Cross From My Charity List”

  1. [...] Ritholz, who writes the Big Picture blog, says today he’s done with the Red [...]

  2. rd says:

    The big problem with disaster donations is that people give money in the weeks and months AFTER a disaster when much of the work done by Red Cross and others is during and immediately after the event. If money is donated to a specific event, then they are supposed to figure out how to spend it for that event, and that event only. However, much of their cash outlay had to be done out of money on hand when the disaster occurred.

    They are probably lawyering up because some of that money is being sequestered for use on other disasters that are not as high profile or in reserve for use on a disaster that has not been scheduled yet.

    When I give to the Red Cross, I give to their general disaster relief fund, not to a specific event. However, the vast majority of my donations go to the local United Way and other organizations in my own community. I have a much better idea on where that money is going than when it s given to a large national or international organization.

    • Lookout Ranch says:

      This is the proper way to look at it.

      When disasters occur in relatively affluent communities, it seems like more and more those communities try and blackmail the Red Cross into giving all related contributions to the people in those communities instead of allocating money based on longer term organizational needs.

    • bear_in_mind says:

      @rd (and Barry):

      I tend to think “rd” is probably pretty much on the money, as it were. I think there is a timeliness issue between the needs of the community (right now — immediately after a disaster) and the collection of funds to pay for those operations which naturally flow in with a time lag.

      I also agree with Barry’s overall point which is that The Red Cross should be transparent in their stewardship of the funds. Given the *enormous* amount of money they collect annually, they just might be able to keep 91 percent flowing to direct services and support. But this shouldn’t be something assumed or speculative. Open the books, share the last three years worth of tax filings to ProPublica and be done with it.

      And finally, I think Barry is also on-target with the call to support smaller, more locally-oriented organizations most of whom struggle to find sufficient funding to keep the doors open each and every year. Think global, act local.

      • rd says:

        I think the Red Cross needs to be more transparent AND should have a lot of flexibility on how funds are allocated to various disaster areas. Both of those may help improve their effectiveness.

  3. scone says:

    I used to live in a county that had a terrible flood. The Red Cross came in and started fundraising. They claimed the money was going to help the flood victims, but later admitted it was going into the general fund. We locals felt we had been lied to, cheated, and used as poster children for the Red Cross fundraising machine. And it was totally unnecessary. If they had been honest, and explained up front that the money went into one big kitty, we might have understood. But with the lying and manipulation– nope, totally unacceptable.

  4. CD4P says:

    Hmmm… I hope NBC Nightly News and/or the cable news channels pick up this story and put the spotlight on the Red Cross’ behavior.

    Locals around San Diego learned their Red Cross affiliate became a fiefdom for administrators dipping their greedy paws into the til.

  5. dsawy says:

    This isn’t news to anyone who has heard a WWII or other war veteran rant on the subject.

    In my experience of asking “where does my money go?” to charities and foundations claiming to do “beneficial” things, most of the really high-profile outfits are riddled with problems. We’ve changed our estate planning to make the donations and bequests to local groups, not high-profile national or international groups.

  6. irishQ says:

    My father served in WW2, he would tell us that the Red Cross would charge soldiers for donuts and cigarettes. Screw the Red Cross, he never gave them a dime and told us to do the same.

  7. wrongwy says:

    My husband and I reached the same conclusion. The Red Cross collects huge sums of money in the initial outpouring of help and hasn’t disbursed it years later in areas like Haiti. We have a friend who is an epidemiologist and asked him about where we should send disaster relief money. He suggested doctors without borders which gets a 4/4 on charity navigator. I’m sure there are others equally worthy of our help.

  8. jbegan says:

    Actually, as far as relief organizations go, Red Cross does spend the bulk of its donations. However, my contact with them has been the more mundane disasters when a family loses its home due to flood or fire. Red Cross does pay to put families up for the first 48 hours, provides food, clothing etc. They do a good job at that. They did fall down during Sandy, and an earlier (2012) article covers where and how. I really don;t see their handling of Sandy as a major problem in light of the massive scale of disaster. I’m not sure why they won’t open their books, but feel it may have something to do with fear of perception:

    The problem with the Red Cross | Felix Salmon http://blogs.reuters.com/felix-salmon/2012/11/12/the-problem-with-the-red-cross/

    This covers the actual expenditures..and they seem reasonable: Where your donations actually go – May. 24, 2013 http://money.cnn.com/2013/05/24/pf/donations-charities/

    And if you feel the urge to not donate, this is a list of charities you really don’t want to donate to: America’s Worst Charities http://www.tampabay.com/americas-worst-charities/

  9. Derektheunder says:

    Haiti is what turned me off of the Red Cross and large charities in general. Maybe in some way that is beyond my understanding, they are not corrupt criminal organizations, but I don’t see it.