Red Cross criticized despite huge relief effort

NEW YORK -- As its hurricane relief donations near the $1 billion mark, more than double all other charities combined, the American Red Cross is encountering sharp criticism of its efforts and mounting pressure to share funds with smaller groups.

The complaints -- that Red Cross operations were chaotic in some places, inequitable in others -- have stung deeply within an organization that is proud of its overall response to Hurricane Katrina, by far the most devastating natural disaster it has confronted on U.S. soil.

"It's frustrating to our thousands of volunteers out there every day, away their families, helping people," said spokeswoman Devorah Goldburg. "We never said we were perfect -- we're trying to do our best under extraordinary circumstances."

The frustration stems partly from the fact that the Red Cross has worked to avoid a recurrence of the humbling fundraising controversy that flared after the terrorist attacks of Sept. 11, 2001.

Back then the Red Cross raised about $1.1 billion -- its record so far for a single disaster -- but the organization was assailed when donors belatedly learned that $200 million of their gifts were being earmarked to prepare for future crises rather than to help victims. Red Cross president Bernadine Healy resigned, the money was shifted back to the Sept. 11 Liberty Fund, and the organization promised greater accountability in future fundraising campaigns.

Because of that experience, Goldburg said the Red Cross is determined to use its massive donations for purposes its donors were asked to support. These include emergency shelter and food, plus short-term financial aid, but not longer-term recovery or rebuilding. Such efforts have never been part of the Red Cross mission.

"After 9/11, we learned we had to be very specific as to where our money is going," Goldburg said. "Our donors are saying to us, 'We want this money spent on Katrina right now."'

The Red Cross estimates it will need $2 billion to finance Katrina-related emergency services. Even if the goal is reached, Goldburg said, any policy change that would allow support of recovery programs would have to be authorized by the Red Cross board of governors.

Paul Light, a professor of public service at New York University, said he has been impressed with the Red Cross' adjustments after Sept. 11 and its emergency response to Katrina.

But he is among numerous experts and activists who believe Katrina's impact is so severe that the Red Cross should depart from tradition and help finance the long-term recovery. "A lot of small non-profits in the Gulf Coast are staring at deficits and will be hoping for partnerships," he said. "The Red Cross would be wise to invest in them."

Kathleen McCarthy, director of the Center for the Study of Philanthropy at the City University of New York, also advised the Red Cross to consider flexible, creative ways of sharing donations.

"How funds are allocated between relief and development is always a problem because relief is sexy and development is not," she said. "We're seeing a huge amount of money poured into relief, and far less attention paid to how you get money to local organizations which can find the best way to help rebuild their communities."

Across the Gulf Coast, a coalition of black-led community groups called Saving Our Selves is urging the Red Cross to consult with their leaders as attention shifts to recovery.

"This work is so immense -- it's dangerous anytime you have a single organization monopolizing relief services," said coalition leader LaTosha Brown. "The Red Cross needs to recognize its limitations and reach out by partnering with local agencies who have people on the ground."

Yet the executive director of the watchdog group Charity Navigator said such pleas to the Red Cross are unrealistic, and many reflect envy of its fund-raising prowess.

"The Red Cross raised the money fair and square by making a compelling case to the American public that they were the best organization to get these dollars," Trent Stamp said. "To come in after the fact and ask them to share the money -- I can't think of anything more pie-in-the-sky and naive."