- As the world's most venerable charity, the American Red
Cross serves on the front lines of nearly 67,000 disasters a year, from
house fires to calamitous floods. But now the 120-year-old organization
is facing a decidedly different kind of storm.
The ironic cause of the tumult? Too much goodwill. After September 11,
Americans opened their wallets and veins as never before to deliver unprecedented
amounts of moneyñroughly half a billion dollarsñand blood
to the American Red Cross.
The amountsñstaggeringñhave caused a host of unanticipated
problems. For one, the money has not gone entirely to victims through the
Liberty Relief Fund, as donors believed it would. And some of the blood
had to be thrown away because it has a limited shelf life.
So the Red Cross, accustomed to receiving compliments, suddenly was slapped
with complaints. Already the fallout has been clear. High-profile former
President Bernadine Healy was forced from her $450,000-a-year post. And
Congress is giving the charity a skewering. "Like a kid in a candy
story, they got big eyes," says Louisiana's Rep. Billy Tauzin, whose
House subcommittee held a contentious hearing on the issue. "The question
is whether they misled the American public or not, and I think they did."
Healy says she repeatedly explained that the funds were never "only
for the victims." Even so, the Red Cross is reassessing how it will
spend the $264 million that will remain in the Liberty Fund after it doles
out the $300 million earmarked for relief tied to September 11.
Unique charter. Typically, the Red Cross has not been in a position of
publicly explaining itself to Congress. But there are limits to the charity's
independence. It is chartered by Congress and required to operate according
to terms outlined by the federal government. Rep. Bart Stupak, a Michigan
Democrat on the oversight panel, says the Red Cross should expect either
a written reprimand from Congress or another Capitol Hill hearing to discuss
And the spotlight could also engender a slump in giving and in confidence
in charities. So now the Red Cross is scrambling to regain the public's
good graces. "If we don't subject ourselves to public scrutiny, we
will never have public trust," says David McLaughlin, chairman of
the Red Cross's board of governors.
It was internal scrutiny that undid Healy's tenure. By her own account,
she was pushed out from the top job by board members who didn't like her
aggressive handling of the 9-11 funds, among other things. "I was
too tough," she tells U.S. News. "There was not one substantive
reasonñzero, nada, nothing," she says.
Healy, 57, provides documentation supporting her contention that she kept
the board fully apprised and says that war requires the Red Cross to do
whatever necessary to relieve suffering.
Now, the Red Cross says it won't add money to the Liberty Fund unless donors
specifically request it. Instead, all monies gathered after October 31
will be put into the Disaster Relief Fund. An auditing firm has been retained
to keep tabs on the expenditures. "My highest priority is that the
Liberty Funds are disbursed quickly, efficiently, and appropriately,"
says Harold Decker, now the interim CEO.
For her part, Healy has come to recognize that perhaps she and the Red
Cross just were not the right fit. "Despite the many successes,"
she wrote to the board in a farewell note," what you really wanted
was a different personality . . . maybe . . . more of a Mary Poppins and
less of a Jack Welch."
- From Bonnie Moore
- The more the Red Cross tries to save it's own butt, the
further it sticks it's head in the sand. How dare they be so judgemental
by giving what "They" think someone needs to live their lifestyle
for a year? It's the same old "those who have, is those who gets"
- The only fair way to distribute the money is to get a
list of those who lost loved ones, from Emperor Rudy, making allowances
for the children and divide the mone equally. It's too bad if one pays
$5000 a month and the next person can only afford $500.Divide it equally
and Give them all the money so far collected, (much more is on the way)
let them save it as they like.The same should go for the other 140 charities
who have collected funds. Get them on the hot seat, too.