In 2006, I wrote a two-part article for the Capital Research Center on the history of the American Red Cross. I noted at the time that several reports about the Red Cross you’d think would exist didn’t. No newspaper or magazine had ever investigated the Red Cross at length. There was a book about the Red Cross’s blood program, but no book investigating the Red Cross. The last decent history of the organization was published in 1950.
But now one of these gaps has been filled. ProPublica, the nonprofit investigative reporting service, in collaboration with National Public Radio, has come out with a lengthy investigation of the American Red Cross. It is well-sourced and very much worth reading.
Now of course one has to take stories ProPublica produces with a large grain of salt. As Cheryl Chumley notes in this Foundation Watch piece from 2009, the organization was founded by die-hard leftists Herb and Marion Sandler, and in looking at what the organization reports on, one has to ask if the result of the stories advances the agenda of liberal plutocrats. For example, I wouldn’t trust anything ProPublica says about the “menace of dark money” in American politics for five seconds, because the Sandlers would love to see pieces explaining why Republican donors should be crushed.
However, one lesson the series of Hudson Institute debates taught us was that, while liberals and conservatives differ on how foundations should spend their money, they don’t really differ that much on how nonprofits should be managed. I don’t think there’s a “left-wing position” and a “right-wing position” on the American Red Cross. We all want the organization to be competently and efficiently run, and a good provider of disaster relief. But the ProPublica series shows that this is far from the case.
What ProPublica’s report reminds me of is the series of reports by the Washington Post and Regardie’s that led to the fall of William Aramony at the United Way of America in 1992. As you remember, Aramony was a prodigious fundraiser who was equally adept of squandering the United Way’s wealth and good name on lavish living as well as extravagant gifts to a girlfriend forty-two years younger than he. Aramony’s defense was that his brain was shrinking at the time he committed his felonies, which did not persuade jurors. Aramony ultimately served six years in prison.
It’s likely that Aramony’s fall was due to mid-level United Way staffers disgusted by the great man’s behavior. And while corruption is not an issue with the Red Cross (so far), what ProPublica reporters Justin Elliott and Jesse Eidinger and NPR’s Laura Sullivan discovered, thanks to lots of lower- and middle-level Red Cross staffers willing to come forward, was massive incompetence at one of America’s largest charities.
Elliott, Eidinger, and Sullivan began with a basic question: the Red Cross raised $312 million for Superstorm Sandy disaster relief. How was the money spent?
At first the Red Cross tried to stonewall, having the white shoe law firm of Gibson, Dunn offer the ridiculous claim that the organization would “suffer” if such information became public “because its competition would be able to mimic the American Red Cross’s business model.” Ultimately the Red Cross, after some prodding by the New York Attorney General’s office, provided some basic data.
In October, Elliott, Eidinger, and Sullivan came out with their longest report. “The Red Cross botched key elements of its mission after Sandy and (Hurricane) Isaac, leaving behind a trail of unmet needs and acrimony,” they write.
Here are some of the key findings of their report about Superstorm Sandy.
>>>>Toms River, New Jersey, resident Rich Wieland lost power for sixteen days. He had no contact with the Red Cross until two months after Sandy hit.
>>>>Rich Sturiale lost the basement and the first floor of his Far Rockaways, New York home to Sandy. He said that the Red Cross didn’t show up until two weeks after the storm. By contrast, volunteers from Mormon and Amish nonprofits were in Far Rockaways three days after the storm hit.
>>>>Richard Rieckenberg, a Navy veteran who volunteered for the Red Cross after Hurricane Katrina, charged that as many as fifteen of the Red Cross’s emergency response vehicles were used for public relations purposes, including as props for an event Red Cross CEO Gail McGovern held in Staten Island. An anonymous source charged that one of these vehicles spent five hours shooting a video in which supermodel Heidi Klum unloaded supplies.
>>>>Officials in Bergen County, New Jersey, activated their Emergency Operations Center shortly after Superstorm Sandy began. One of the seats at the center was reserved for a Red Cross representative. No one from the charity ever showed up, so police and fire officials in that county could not easily contact the Red Cross.
>>>>Many of the volunteers who came to New York were seniors in their sixties and seventies who were expected to perform punishing physical duties, such as climbing up seventeen flights of stairs to deliver food.
The Red Cross did prepare hundreds of thousands of meals, but had little or no sense of where hungry people were or what their needs were. In one notorious incident, Red Cross representatives delivered pork-laden meals to a Jewish retirement facility. One caterer delivered 70,000 Danishes—at $7 per Danish—to the Red Cross, but to poor logistics, 35,000 of these Danishes had to be thrown away, wasting nearly $250,000.
Since their major story in October, Justin Elliott has produced one follow-up piece describing an internal survey of over 14,000 Red Cross employees conducted this year by IBM. Only 39 percent of those surveyed agreed with the statement “I trust the senior leadership of the American Red Cross.” Just 42 percent agreed with the statement “My ideas and suggestions count.” And while 61 percent agreed that “the American Red Cross shows a commitment to ethical business decisions and conduct,” as Elliott notes, this means that nearly 40 percent of those who took the survey believed that their employer was not committed to ethical business decisions.
The Red Cross is an organization most reporters take for granted, but the investigations ProPublica and NPR have undertaken should have been done years ago. I’m sure they’ve only encountered a portion of the problems the Red Cross faces. I look forward to further installments of their investigation.
(Hat tip: Nonprofit Quarterly)