How does the Red Cross spend donor money? It's a "trade secret"

The American Red Cross is such a long established and internationally acknowledged charitable institution, showing up to help people at the scene of every major disaster, that it’s hard to imagine anything nefarious about them. But as long, painful experience has shown us, whenever large sums of money are amassed in the vicinity of human beings all bets are off. With that in mind, an article from Sharyl Attkisson this week is worth a look as she examines The Secretive American Red Cross. In it, she highlights an article from ProPublica who have asked some uncomfortable questions about donations taken in following Hurricane Sandy and the possibly even more disturbing answers.

“Just how badly does the American Red Cross want to keep secret how it raised and spent over $300 million after Hurricane Sandy? The charity has hired a fancy law firm to fight a public request we filed with New York state, arguing that information about its Sandy activities is a ‘trade secret’…As we’ve reported, the Red Cross releases few details about how it spends money after big disasters. That makes it difficult to figure out whether donor dollars are well spent. The Red Cross did give some information about Sandy spending to New York Attorney General Eric Schneiderman, who had been investigating the charity. But the Red Cross declined our request to disclose the details.”

This is hardly Attkisson’s first run-in with the Red Cross.

On May 12, 2010 I reported for CBS News on how 5 major nonprofits, including the American Red Cross, had spent funds intended for Haiti earthquake victims four months after the disaster. I noted that enough aid had been raised to give each displaced family a check for $37,000 but thousands of Haitians were still going hungry and living under flimsy shelters. I learned that, to a large degree, the charities can’t tell anyone with specificity where exactly all the money goes. They can give general figures such as, ‘we’ve given out 10,000 meals’ or ‘we’ve distributed 10,000 bottles of water,’ but I wondered why there wasn’t a spreadsheet that explains how many bottles or meals were shipped to which refugee camp and when. It seems pretty basic. After all, somebody has to know. A lot of the funds that donors intended for “emergency relief” were, in fact, still sitting in funds unspent. Some charity officials privately acknowledged that many charities receiving a giant influx of donations in the wake of a giant disaster are ill-equipped to produce long term recovery programs. They sometimes find themselves frantically trying to figure out how to spend all the money in a responsible way that serves the mission.

The Red Cross has faced plenty of questions in the past, may centering on their handling of blood donations from generous citizens. The blood, given for free, winds up being discarded from slow or inefficient handling up to 14% of the time according to one investigative report from Forbes. And while you give the blood out of the goodness of your heart (sorry for the pun), the Red Cross sells it for anywhere from $210 a pint in Wisconsin to $265 in New Jersey And where does that money go, specifically? Apparently that’s a “trade secret” as well.

It was Attkisson herself who reported in 2012 that one New Jersey duo alone skimmed over a million dollars in funds which never reached the needy. And that was only one of many examples she uncovered in her award winning series. But when pressed for answers, the Red Cross refers you to their lawyers rather than discussing the details of where these hundreds of millions of dollars are going. There is no question that the American Red Cross does a lot of good work and many, many people do indeed receive relief thanks to their efforts. But that doesn’t mean that they are free from any questions and don’t owe some measure of accountability. It’s a disquieting story to be sure, and somewhat shocking when you realize that a charitable institution should be far more interested in portraying a clean profile and complete transparency when they rely entirely on the good will of the public for their existence.