American Red Cross (and others)- A Huge Public Relations Problem

by Gary Snyder

The distribution of funds raised by the American Red Cross and others is, once again, making headline news. And it isn't good. 

The American Red Cross has a history of huge blood-compliance problems that have cost the agency tens of millions of dollars in federal fines by the U.S. Federal Drug Administration. These were levied for failure to take precautions to assure the safety of the blood donations. 

In addition, millions of dollars of documentable acts of malfeasance have taken place at ARC.

Previously, there was so much concern on the part of Congress concerning the lack of board and administration action about its problems, the American National Red Cross Modernization Act of 2007 (Pub. Law 110-26), a bill to strengthen the governance structure of the American Red Cross, was signed into law to provide the first major overhaul of the organization since its 1947 congressional charter.

Many of the problems of the past have been adequately addressed by the current administration.

   

However, the American Red Cross continues to trip over itself in one area. The failures in distributing funds to Haiti, various domestic catastrophes, as well as local fund drives have gained much bad press. New York Attorney General Eric Schneiderman said he found it “deeply troubling” that months after the October 2012 storm, “so much money had gone unspent.” The attorney general found that as of late March, nonprofit groups had had yet to disburse more than 40 percent of the $575-million in donations they received to aid storm victims

At the time of the survey the American Red Cross reported having allocated $130-million of its $300-million in Sandy funds, prompting Mr. Schneiderman to press the charity for details on its spending. A Red Cross spokeswoman said it has updated Schneiderman's estimates by saying it has now “spent or committed” $225-million in storm-tied donations.

Similarly, a relief fund in New Jersey that is presided over by Mary Pat Christie, the wife of Gov. Chris Christie, received criticism a few months ago for spending the money it collected too slowly. That organization, the Hurricane Sandy New Jersey Relief Fund, has collected about $38 million and allocated about $15 million, a spokeswoman, Eileen Lofrese, said. She said an additional $5 million would be spent in the next few months.

In contrast, the Robin Hood Foundation says it has given out all of the $71 million it had collected for hurricane relief before this week.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)