News and analysis
September 25, 2015

Red Cross Figures Raise Questions About How It Used Donations, Senator Says

The American Red Cross has told Sen. Charles Grassley how much money it gave to partner organizations to support relief efforts after the 2010 Haiti earthquake — but two months after the deadline he set, he remains dissatisfied with the information he's received and continues to seek clarification.

Senator Grassley has been trying to learn how much of the money donated to help Haiti actually went to disaster-relief work and how much the Red Cross and its partners reserved for other purposes, like overhead expenses and fundraising.

"The information provided raises questions about the amount of money used by the Red Cross and each partner organization for administrative and program costs aside from the relief and response work," said a spokeswoman for the senator. "The information also leaves questions about whether the level of relief and response work achieved matches the Red Cross’s stated goals and donor expectations."

Senator Grassley declined to share the figures the Red Cross provided, but the spokeswoman said he hopes to soon.

Confidential Contracts

The American Red Cross previously withheld information about the dollar amounts it gave to its partners during Haiti relief efforts, citing nondisclosure contracts. The senator was unhappy about the nonprofit’s refusal to share the information in July, saying at the time that he didn’t understand why the Red Cross would enter into confidential contracts.

Although Senator Grassley didn’t share an opinion about what percentage of donations is appropriate for the Red Cross and its partners to reserve for nondisaster-relief activities, the spokeswoman said he believes that nonprofits should be transparent about this information.

Senator Grassley’s inquiry into the Red Cross began in January in response an investigation by ProPublica and NPR about the nonprofit’s disaster work and financial reporting.

The organization also came under government scrutiny in 2013, when Rep. Bennie Thompson requested that the Government Accountability Office audit the charity’s disaster-related services — an audit the charity tried to prevent.

The GAO report, published last week, called for "regular, external, independent" evaluations of the nonprofit’s operations and spending. Also last week, Representative Thompson introduced a bill that would require the nonprofit to open its books and undergo audits from USAID and the Departments of Homeland Security and Treasury.

The Red Cross has not yet provided information to Senator Grassley about how much money it gave to U.S. government agencies.

Correction: An earlier version of this article said incorrectly that the Red Cross told Senator Grassley this week about the money it gave to partner organizations. It gave Mr. Grassley that information before this week.

Send an e-mail to Rebecca Koenig.