One charity may play an outsize role in affecting public perception of the nonprofit world: the American Red Cross.
Because of its storied history and widely recognized name, the nonprofit is regularly in the public eye, and its Congressional charter subjects it to more government scrutiny than most other charities. That means the scandals it has weathered over the past two decades — millions of dollars in fines imposed because of safety lapses in its blood-donation program, frequent turnover of chief executives, and allegations of fraud and waste during disaster-response efforts — have gotten plenty of attention.
Most recently, the Red Cross has been under attack from two lawmakers, Sen. Charles Grassley and Rep. Bennie Thompson, who have sought greater transparency, and from the Government Accountability Office, which last month suggested that the organization open its books regularly for audits. Federal policy makers acted largely in response to investigations by two news organizations, NPR and ProPublica, which raised tough questions about the charity’s response to Hurricane Sandy and the earthquake in Haiti.
There’s no consensus on whether coverage of the American Red Cross affects other nonprofits: In a 2006 paper, Paul Light, a professor at New York University, concluded that “confidence in the Red Cross is the most powerful predictor of confidence” in nonprofits in general and “as the Red Cross goes, so goes the rest of the sector.” In a 2009 paper, however, Michael O’Neill at the University of San Francisco questioned that analysis.
But there’s a precedent for being worried about a high-profile charity’s sustained drama, said Michael Rosen, a fundraising consultant. He cited what happened after the British fundraising company Solutions RMC was shut down in 2003 after it was caught running a fake breast-cancer charity: Contributions to Scottish cancer charities declined in the months that followed, with some groups experiencing a drop of as much as 30 percent.
“There’s definitely evidence that what happens at one charity can most certainly affect giving at other charities,” Mr. Rosen said.
Hurting Donations
Gail McGovern, chief executive of the American Red Cross, doesn’t think the nonprofit suffers from a lack of trust among Americans. She pointed to the nonprofit’s internal polling, which found that 70 percent of Americans said that on a scale of 1 to 5, with 5 being the highest level of trust, they would rank the charity 4 or 5. She also said the nonprofit is mentioned in the media about 250 times a day, and “the overwhelming majority” of the references are positive.
“There are going to be critics, but we don’t lose sight of the fact that there’s a lot of praise out there, too,” she said. “We can’t focus on one or two negative articles. We can’t stop and obsess over that. We’ve got to fulfill our mission every single day, and that’s what we do.”
But nonprofit leaders still worry about fallout from the nonprofit’s scandals. In August, the Charity Defense Council, a group founded by the nonprofit activist Dan Pallotta, sent an eight-page advisory to reporters detailing what the group called misreporting by NPR and ProPublica. In an email to The Chronicle, the council said the coverage led to “serious (and sad) public-relations damage.”
Some of the deepest concern is expressed by people who used to be personally affiliated with the American Red Cross.
David St. Louis said that after more than three years of volunteering in Bangor, Maine, and working on national response efforts after flooding in Eagle Pass, Texas, and Hurricane Sandy in New York, he stopped doing volunteer work for the organization because of negative experiences. He says he was put up in an expensive hotel room paid for with donor dollars, was asked to exaggerate the number of people he helped, and made a complaint to the Red Cross’s ombudsman that was ignored. The Red Cross confirmed that Mr. St. Louis is no longer a volunteer but could not verify whether his charges were accurate. However, a spokesman said he did not raise them with his supervisors and that it is not the charity’s policy “to place volunteers in high-end hotels.”
Mr. St. Louis has reduced his donations to charities of all kinds.
“My wife and I used to donate to many charities. It is very difficult for me to trust now,” he said in an email. “We now donate much, much less and are very careful who we give to.”
Jennifer Broome, who worked briefly as a stewardship officer at the American Red Cross during its 2010 relief efforts in Haiti, called criticism of the organization “legitimate” but said she worries that the media coverage could hurt other charities.
“I do think it has a direct impact around public perception of trust in the nonprofit sector,” said Ms. Broome, now chief development officer at Nuclear Threat Initiative, an organization founded by the former senator Sam Nunn and the businessman Ted Turner. “It does raise questions about the institutional nature of some of the ways our sector functions.”
