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Internal issues caused ineffective Red Cross responses to hurricanes

Published: Thursday, March 23, 2006

Updated: Wednesday, July 25, 2012 23:07

In its mission statement, the American Red Cross states its purpose is to "provide relief to victims of disasters and help people prevent, prepare for and respond to emergencies." The charity's inept response to the damage caused by hurricanes Rita and Katrina, however, left little doubt that the Red Cross failed miserably in its role as a humanitarian organization and revealed that it needs serious restructuring if it is to continue attempting to assist those in need.

Americans donated generously after the hurricanes, giving $3.27 billion, or $31 for each household, to charities around the nation. The American Red Cross, which was chartered by Congress in 1905 as the only non-profit organization designated by the federal government to respond to disasters, received about two-thirds of the donated money, thanks to the urging of President Bush. What it did with that money is where the problems begin.

Six months after Hurricane Katrina, the Red Cross had already distributed 84 percent of its Rita and Katrina donations, including $194 million reserved for the long-term recovery of its local chapters, according to a survey conducted by the Washington Post. As a result, the agency had insufficient resources left to cover the countless requests for aid and long-term rebuilding of lives and reconstructing the social fabric of the Gulf Coast.

Although a majority of the money was given as emergency financial assistance, a substantial $78 million was spent on fundraising costs, management and general expenses. Specifically, this included $500,000 paid to consultants to recruit celebrities for the cause, pitch its name in Hollywood and promote its chief executive as the face of the charity. In 2002, the American Red Cross National Celebrity Cabinet was developed for the ambiguously significant need to "highlight important initiatives and response efforts," according to the Red Cross Web site.

The Red Cross defends such spending by saying it makes an impact on the American public in terms of increasing volunteers as well as blood and financial donations, making it cost effective. The organization also states that 91 cents of each dollar are invested in "humanitarian services and programs," such as the ones carried out after Katrina and Rita.

Perhaps its services would be better executed if it were not for the internal management problems that have plagued it recently. The Red Cross is headed by a whopping 50 board members. Eight of these are appointed by the White House, six of which rarely attend meetings, according to documents submitted to the Senate Finance Committee, which is now investigating the organization. It discovered that the lack of attendance combined with overly intrusive meddling by others and infighting are what hampered the effectiveness of the Red Cross.

In the past five years, the Red Cross has been through three CEOs and is currently headed by an interim CEO. $2.8 million was paid out as severance, deferred compensation and bonuses to the previous heads, according to Red Cross records. Marsha Evans, the most recent CEO, had an annual salary of $651,957 in 2003, according to Forbes, and received a severance package worth $780,000 when she stepped down in December.

The Red Cross should be ashamed that such incidents are occurring in what is supposed to be a charitable organization. There is no excuse for bickering among board members, and the large focus on its public image overshadows its ultimate goal of assisting humanity. Only by keeping this goal in mind will the Red Cross be able to redeem itself from the inefficient operations it conducted in the wake of the Katrina and Rita disasters.

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