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June 22, 2016

Opinion: Red Cross Faces ‘Trust Deficit’ on Disaster Work

The American Red Cross must improve internal oversight and transparency to retain public confidence in its frontline role in disaster response, The New York Times asserts in an editorial. The piece cites a blistering report released last week by Sen. Charles Grassley’s office on the Red Cross’s work in post-earthquake Haiti.

According to Mr. Grassley’s review, the charity — which raised $488 million for Haiti relief — built only six new homes in the country and spent a quarter of the donated money on administration and fundraising. The Times also notes the Iowa Republican’s finding that the Red Cross has slashed its ethics office from 65 employees a decade ago to three today.

“It would be unfortunate if Americans were hesitant to donate after the next catastrophe,” the Times editorial board writes, noting the 135-year-old charity’s federally chartered role in responding to U.S. disasters. “The Red Cross should make every effort to win their confidence.”

In a responding letter to the editor, Red Cross CEO Gail McGovern challenged the overhead assertion, saying the charity spent only 9 percent of Haiti donations on “management, general and fund-raising expenses” and that it has delivered “new hospitals, repaired homes, clean water, vaccinations, job training, improved sanitation, and other life-altering assistance to millions of Haitians.”

“While our response has been examined closely, there have been no findings of fraud or abuse,” she writes. “We believe that our disaster response efforts remain worthy of the public’s trust.”

See the October 2015 issue of The Chronicle of Philanthropy for a survey and special report on the public’s confidence in charities.