News and analysis
August 11, 2015

Red Cross Report Gets Strong Critique From Dan Pallotta's New Venture

Dan Pallotta
The Charity Defense Council, the group set up by marketing executive Dan Pallotta to combat what it considers unfair attacks against nonprofits, has made its debut as a media watchdog, lambasting a ProPublica and NPR investigation into the American Red Cross’s response to the 2010 earthquake in Haiti.

Headlined "How the Red Cross Raised a Half Billion Dollars for Haiti and Built Six Homes," the ProPublica/NPR report cited internal documents and insider accounts to paint a picture of mismanagement and poor results, prompting members of Congress to request information from the charity and plan hearings into its spending in Haiti.

The Charity Defense Council’s verdict: "Armed with nothing but distortion and phony metrics, the national media have created the latest victim in the U.S.’s philanthropy wars — the Red Cross," it said in a statement titled "Media Malpractice ­— How the Press Has Tried to Kill the Red Cross’ Haitian Relief Effort."

ProPublica shot back by providing links to back up its reporting and accusing the council of presenting a "series of claims it does not even attempt to substantiate."

Seeking a Paid Leader

Stay tuned for more such back-and-forth scenarios in the future.

Mr. Pallotta — who has been trying to activate the Charity Defense Council for several years as part of his long-running campaign to stop people from evaluating charities based on their overhead costs — said in an interview that the group plans to post a job notice this week for its first executive director.

He said the new hire will be charged with raising more money, especially from institutional donors, for the council, which lists countering negative media stories as one of its goals. The Red Cross advisory is "a convention we want to use on a regular basis," he said, perhaps once or twice a month.

Under that convention, the council sees itself as an advocate for a misunderstood group rather than a neutral arbiter. In fact, Mr. Pallotta compares his work defending charities to human-rights movements like the fight for gay rights.

When asked if the Red Cross had donated to the Charity Defense Council or helped finance its rebuttal efforts, he said "not a penny," but added in an email: "What if they had given money? God knows gays and lesbians fund the Gay and Lesbian Alliance Against Anti-Defamation. This notion that we should not be self-interested in the nonprofit sector is the biggest manipulation ever foisted on a class."

Reporters Not Interviewed

The council’s approach did not sit well with Richard Tofel, ProPublica’s president, who complained in an email that the group had asked the Red Cross to review its advisory but not attempted to contact the ProPublica reporter whose email address was listed with the package — an approach that "speaks volumes about their partisanship and augurs poorly for their future work."

"The purpose of making contact is to get the contact’s side of the story," the council said in a written response. "In the case of NPR and ProPublica, we already had their side of the story — they published it."

Mr. Pallotta said a member of the group’s advisory board, whom he declined to name, had supervised the Red Cross advisory with the help of a paid researcher. The board includes representatives of charity groups that work both domestically and internationally, the latter including InsideNGO, Invisible Children, and Kiva.

As for the substance, the defense council criticized the ProPublica/NPR report for its emphasis on six homes, saying the Red Cross’s decision to switch course after building them was a smart one based on listening to local leaders and architectural experts who recommended that it repair existing structures instead. The stories also failed to cite other Red Cross accomplishments, like providing temporary shelter to 860,000 people, helping to finance a cholera vaccine, and helping repair or operate eight hospitals and clinics, the council said.

Mr. Tofel said in an email that its reporting was based on hundreds of pages of Red Cross documents and accounts of a dozen current and former charity employees. He cited critical staff memos and a Government Accountability Office report saying a $30-million project to build permanent homes in Haiti was delayed for years in part because of a turnover in Red Cross leadership.

The council, he added, did not attempt to substantiate some of its own claims, for example, that the Red Cross was "a champion among on-site activists in the wake of the quake."

Fact Checking

Upon receiving inquiries from The Chronicle, Mr. Pallotta and Mr. Tofel both provided additional documentation to support their interpretations, showing what a tricky business media criticism can be.

The defense council faulted the journalists for using a sensational headline that influenced other media reporting, focusing on overhead costs instead of effectiveness, and quoting internal documents selectively.

Mr. Tofel said the council, like the Red Cross, had failed to point out a single inaccuracy in the investigative stories.

The Red Cross, for its part, said in a statement that the only help it offered the Charity Defense Council was fact checking. "We do appreciate an independent source taking the time to research the inaccuracies in the recent reporting on our work in Haiti," it said.

Send an e-mail to Suzanne Perry.