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The three million unpaid volunteers for the Red Cross are an able, well-intentioned bunch… and they certainly do a lot of good. But recently the Red Cross organization itself has undergone some close scrutiny, and there are some troubling findings.

According to Richard M. Walden (president and CEO of Operation USA), it is estimated that 70% of the $1.2 Billion donated to Katrina-related donations went to the Red Cross, yet the Red Cross is fully reimbursed by the government for any shelters or emergency services they provide. Repeatedly, the Red Cross has run into trouble for spending much less on disaster recovery than they collect, shuffling the extra funds into their “national disaster account,” where it can be used for purposes other than that it was collected for. That’s the sort of trouble they saw in the aftermath of the 1989 San Francisco Bay Area earthquake, and after 9/11.

Despite landing in trouble for soliciting more donations than they need and squirreling the rest away, the Red Cross continues to operate this way. The organization makes a total of about $3 billion annually, about half of which is from selling donated blood. Some of this surplus money ends up in disaster relief, but it seems that much does not. Last year alone, the Red Cross spent $111 million in fund raising, and their CEO Marsha Evans made just under $652,000. It seems the the main value they offer is the free help of their volunteer force.

From the LA Times article:

The Red Cross expects to raise more than $2 billion before Hurricane Katrina-related giving subsides. If it takes care of 300,000 people, that’s $7,000 per victim. I doubt each victim under Red Cross care will see more than a doughnut, an interview with a social worker and a short-term voucher for a cheap motel, with a few miscellaneous items such as clothes and cooking pots thrown in.
Giving so high a percentage of all donations to one agency that defines itself only as a first-responder and not a rebuilder is not the wisest choice. Americans ought to give a much larger share of their generous charity to community foundations, grass-roots nonprofit groups based in the affected communities and a large number of international “brand name” relief agencies with decades of expertise in rebuilding communities after disasters.

The Red Cross also has some disturbing caveats in the agreement form which every volunteer is required to sign. From the BoingBoing article:

Every volunteer for the American Red Cross is required to sign on to an agreement that covers things like proper conduct, confidentiality, and includes a requirement for all volunteers to sign over all copyright/trademark/patent rights in any work-related writing, art and inventions come up with during their term, and for a full year afterward. Why the hell does the Red Cross need to own the copyrights in the work-related blog postings you make for a year after you stop spending your free evenings handing out cookies to blood-donors? If you write a novel and include some real-life details gleaned from volunteering in a disaster-relief efforts, does the Red Cross really deserve to take all rights to it?

So has the Red Cross become little more than a massive PR engine which takes advantage of millions of well-meaning volunteers, and capitalizes on disasters? It’s an unpleasant conclusion, but it may just be the truth. Any evidence to the contrary is welcome, because this story is far too depressing if it’s true.