Red Cross Skims Off 25% of Donations

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sardia
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Red Cross Skims Off 25% of Donations

Postby sardia » Thu Jun 16, 2016 2:57 pm UTC

http://www.npr.org/2016/06/16/482020436 ... s-finances

The report follows a nearly yearlong investigation by the Iowa Republican and his staff, launched after coverage by NPR and ProPublica of the Red Cross' Haiti response. The venerated charity raised nearly $500 million after the disaster, more than any other nonprofit — but an ambitious plan to build housing resulted in just six permanent homes, NPR and ProPublica found.

Other findings in Sen. Grassley's report:

The charity insisted to congressional investigators that $70 million spent on "program expenses" included funds to oversee and evaluate its Haiti programs. But Grassley's office found that the charity "is unable to provide any financial evidence that oversight activities in fact occurred."
Red Cross CEO Gail McGovern told Grassley's office the charity "gave [the Government Accountability Office] everything that they asked for" during an earlier review. The report, however, says the organization did not provide everything requested, "contrary to Ms. McGovern's multiple claims that it did."
The Red Cross has kept the charity's own internal investigations and ethics unit "severely undermanned and underfunded," the report says, and the charity "appears to be reluctant to support the very unit that is designed to police wrongdoing within the organization."

We have been seeing signs of the red Cross's greed for years now. The game is simple, use the red Cross brand to garner all the money. Spend 25% administering that money, and then " give" some to a sister organisation which has to skim off a percentage to pay for their overhead. You would think that with 25%going to overhead, they wouldn't underfund their auditing department... Unless they didn't want to know the answer.

What's really disheartening is that sites like charity navigator haven't updated their ratings that take into account the failings of the red Cross.
Last edited by sardia on Fri Jun 17, 2016 2:29 am UTC, edited 2 times in total.

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Re: Red Cross Skims Off 25% of Donations

Postby ObsessoMom » Fri Jun 17, 2016 1:39 am UTC

Thanks for this.

Sadly, I'm not surprised. My local Red Cross chapter has had about twenty years of scandals, lawsuits, etc., under a series of directors who have been either spectacularly incompetent, deliberately unethical, or both. Although I know that the odds are high that I'll someday have to depend on the Red Cross in the event of a catastrophe, I now donate to other organizations whom I can trust to put more of my donation to the use I intend.

The worst part is that the Red Cross really COULD and SHOULD be as good as many people have assumed them to be. But no, a few bigshots decided it was okay to profit from the trust and goodwill that the organization had earned over its long history. No qualms about tarnishing that legacy. Administrative shenanigans like this reflect badly on a lot of really devoted volunteers, too, who do important work.

But after my community's past bad experiences watching our donations NOT result in help for local people who had lost their homes, even though lots of money had been raised at Red Cross events advertised "to help the victims of the recent disaster"...and the local director's response was that Red Cross donations cannot be earmarked for particular causes, but rather go into a general fund, and therefore it was unreasonable of us to expect money raised to help our neighbors to result in any concrete aid to our neighbors...I smelled a rat and stopped supporting them.

(I think you mean Charity Navigator rather than "Chastity Navigator," which sounds...naughty.)

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Re: Red Cross Skims Off 25% of Donations

Postby sardia » Thu Jun 23, 2016 2:03 am UTC

ObsessoMom wrote:Thanks for this.

Sadly, I'm not surprised. My local Red Cross chapter has had about twenty years of scandals, lawsuits, etc., under a series of directors who have been either spectacularly incompetent, deliberately unethical, or both. Although I know that the odds are high that I'll someday have to depend on the Red Cross in the event of a catastrophe, I now donate to other organizations whom I can trust to put more of my donation to the use I intend.

The worst part is that the Red Cross really COULD and SHOULD be as good as many people have assumed them to be. But no, a few bigshots decided it was okay to profit from the trust and goodwill that the organization had earned over its long history. No qualms about tarnishing that legacy. Administrative shenanigans like this reflect badly on a lot of really devoted volunteers, too, who do important work.

But after my community's past bad experiences watching our donations NOT result in help for local people who had lost their homes, even though lots of money had been raised at Red Cross events advertised "to help the victims of the recent disaster"...and the local director's response was that Red Cross donations cannot be earmarked for particular causes, but rather go into a general fund, and therefore it was unreasonable of us to expect money raised to help our neighbors to result in any concrete aid to our neighbors...I smelled a rat and stopped supporting them.

(I think you mean Charity Navigator rather than "Chastity Navigator," which sounds...naughty.)

Didn't the old Red Cross not have any of these problems? Or were they always there and nobody bothered to look?

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Re: Red Cross Skims Off 25% of Donations

Postby Lucrece » Thu Jun 23, 2016 2:55 am UTC

It's why I prefer to donate my services to local charity organizations rather than all these industrialized organizations.

Activism and charity have become quite a business.
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Re: Red Cross Skims Off 25% of Donations

Postby Dark567 » Thu Jun 23, 2016 3:37 am UTC

Lucrece wrote:It's why I prefer to donate my services to local charity organizations rather than all these industrialized organizations.

Activism and charity have become quite a business.
I don't think local charity is really immune from that, often it is actually worse as the audit requirements are really low. Your best bet is probably looking at a site like GIveWell and seeing which charities do a good job minimizing non-charitable expenses.
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Re: Red Cross Skims Off 25% of Donations

Postby Chen » Thu Jun 23, 2016 11:57 am UTC

Is 25% really that high? Hell just looking at GiveWell (that was previously linked) seems to show their Contributions out: Contributions in ratio is something like 0.70. Expenses vs contributions in is something like 15%, and the other 10% appears to be net profit (not sure where that ends up going).

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Re: Red Cross Skims Off 25% of Donations

Postby sardia » Thu Jun 23, 2016 1:34 pm UTC

Chen wrote:Is 25% really that high? Hell just looking at GiveWell (that was previously linked) seems to show their Contributions out: Contributions in ratio is something like 0.70. Expenses vs contributions in is something like 15%, and the other 10% appears to be net profit (not sure where that ends up going).

The red Cross in it's heyday spent less than 5%on overhead. So no, it's not OK at all. It's even more egregious because of the organization's size. The total charity giving is limited, so inefficiently spending eats up more dollars.

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Re: Red Cross Skims Off 25% of Donations

Postby Tyndmyr » Thu Jun 23, 2016 1:46 pm UTC

Chen wrote:Is 25% really that high? Hell just looking at GiveWell (that was previously linked) seems to show their Contributions out: Contributions in ratio is something like 0.70. Expenses vs contributions in is something like 15%, and the other 10% appears to be net profit (not sure where that ends up going).


It depends. Not every charity is going to have an equivalent ratio, and looking at historical trends, comparing to similarly sized charities is going to get you a better idea.

In general, larger organizations tend to eat up a larger percent in overhead simply because they accrete layers of management. It's a decent reason to support smaller, leaner charities, IMO.

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Re: Red Cross Skims Off 25% of Donations

Postby ucim » Thu Jun 23, 2016 3:11 pm UTC

Tyndmyr wrote:In general, larger organizations tend to eat up a larger percent in overhead simply because they accrete layers of management.
Do they perhaps do bigger/grander/larger-impact things? If not, it's an argument for splitting charities when they get too big. But size has advantages too.

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Re: Red Cross Skims Off 25% of Donations

Postby Tyndmyr » Thu Jun 23, 2016 5:55 pm UTC

ucim wrote:
Tyndmyr wrote:In general, larger organizations tend to eat up a larger percent in overhead simply because they accrete layers of management.
Do they perhaps do bigger/grander/larger-impact things? If not, it's an argument for splitting charities when they get too big. But size has advantages too.

Jose


Again, it depends. Sometimes economies of scale help, so spending a larger percentage on administration still results in a larger average impact.

This isn't a general rule, but it can happen, and thus, optimal size really varies, depending upon the exact nature of the charity, the area they work in, etc. Research your charities, I guess.

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Re: Red Cross Skims Off 25% of Donations

Postby sardia » Thu Jun 23, 2016 6:09 pm UTC

Tyndmyr wrote:
ucim wrote:
Tyndmyr wrote:In general, larger organizations tend to eat up a larger percent in overhead simply because they accrete layers of management.
Do they perhaps do bigger/grander/larger-impact things? If not, it's an argument for splitting charities when they get too big. But size has advantages too.

Jose


Again, it depends. Sometimes economies of scale help, so spending a larger percentage on administration still results in a larger average impact.

This isn't a general rule, but it can happen, and thus, optimal size really varies, depending upon the exact nature of the charity, the area they work in, etc. Research your charities, I guess.

I guess the bigger question is what did the percentage used to be, and why did it change? If it was something benign like an aging workforce or pensions, yea that makes sense. But if it's sustained questionable spending and incompetence, then it's an awful number.

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Re: Red Cross Skims Off 25% of Donations

Postby CorruptUser » Sun Jun 26, 2016 5:48 am UTC

Stupid question. When you give $1000 to a charity, how do they measure what goes to the end recipient? For example, you give $1000 to some charity that gives massages to wounded veterans. The masseuses are in-house. Does that mean that the charity eats up 100% of the funding?

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Re: Red Cross Skims Off 25% of Donations

Postby sardia » Sun Jun 26, 2016 11:57 am UTC

http://www.charitynavigator.org/index.c ... ew&cpid=48

Usually you compare them to similar charities and see if they're worse. I do recall the wounded warriors charity having the problem you describe. It's a big scandal. https://www.google.com/url?sa=t&rct=j&q ... 57cNvqQEdw

Very bad spending practices are a scourge on donations.

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Re: Red Cross Skims Off 25% of Donations

Postby Whizbang » Sun Jun 26, 2016 12:56 pm UTC

I regularly donate blood to the Red Cross. This disheartens me.

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Re: Red Cross Skims Off 25% of Donations

Postby sardia » Sun Jun 26, 2016 2:30 pm UTC

Whizbang wrote:I regularly donate blood to the Red Cross. This disheartens me.

I don't think blood donations are fungible, and don't suffer the same problems that monetary donations do. Though in the previous Red Cross donation thread,
https://www.propublica.org/article/red- ... -donations
After being contacted by ProPublica and NPR, the charity changed the wording on its website to another formulation it frequently uses: that 91 cents of every dollar the charity "spends" goes to humanitarian services.
But that too is misleading to donors.
That is because of the unusual structure of the Red Cross. Most of what the Red Cross does is take donated blood and sell it to health care providers. Of the more than $3 billion that the Red Cross spent last year, two-thirds was spent not on disaster relief but rather on the group's blood business.
The charity spent $2.2 billion on the blood business, most of which went to employee wages and benefits. By contrast, the charity spent $467 million, or 14 percent of total spending, on its famous domestic disaster response programs, including the expensive Sandy relief effort.
Nonprofit experts say that in combining the blood business spending with disaster relief spending, the Red Cross is painting a confusing picture of its operations for donors.
"It probably has the effect of making the Red Cross look better than it actually is," says Jack Siegel, a lawyer who runs the consulting firm Charity Governance.
If the Red Cross split its blood business from the rest of the charity, "their ratios would look worse. So they don't want to do that," says Borochoff of CharityWatch.
The Red Cross manages to hit its 91 cents target with remarkable consistency. Year in and year out, overhead and fundraising costs amount to about nine cents of every dollar spent. That also raises the eyebrows of experts.

Donating regularly blood is still important, it's just not related to charity except in how it makes their overall numbers look better.

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Re: Red Cross Skims Off 25% of Donations

Postby aoeu » Sun Jun 26, 2016 5:46 pm UTC

sardia wrote:I don't think blood donations are fungible, and don't suffer the same problems that monetary donations do.

Red Cross sells the blood. Not sure if there are more charitable organizations accepting blood donations though.

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Re: Red Cross Skims Off 25% of Donations

Postby Soupspoon » Sun Jun 26, 2016 7:42 pm UTC

Here in the UK, blood donations are through the NHS (see http://www.nhsbt.nhs.uk for details), I'm a regular donor. And we have St. John's Ambulance (and others) providing healthcare support at events, pre-emptively rather than only called for emergencies. Not entirely sure what the British/International Red Cross does by way of winning/spending donations, outside of appeals for foreign aid situations. But I've donated to tbe BRC in the past, despite my ignorance.

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Re: Red Cross Skims Off 25% of Donations

Postby Echo244 » Mon Jun 27, 2016 9:26 am UTC

Soupspoon wrote:And we have St. John's Ambulance (and others) providing healthcare support at events, pre-emptively rather than only called for emergencies.


SJA are paid for this support, while they rely largely on volunteers repaid in the form of training. Said volunteers are also expected to do a certain number of hours each year of duties (providing support to events for which the charity is paid), or be excluded from training. There have also been some... odd measures relating to ensuring that said training is not used for other organisations.

The charity's ostensible goals - that anyone in need of first aid should receive it from those around them - are somewhat lost amidst the business of keeping the organisation's paid work going. Once upon a time, training sessions would be open to members of the public, and everyone who came along would be taught. These days, such open training is reduced to their Save A Life September campaigns (advertising and offering basic training to members of the public in shopping centres and the like), and a few other events.

It's sad - and also potentially the wrong direction to take, as I know in my area they've struggled to provide the numbers for their bigger contracts, and first aid services for many of the smaller, more locally-connected events have been taken over by private companies. They are turning more into a business, and yet (it seems) being overtaken.
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Re: Red Cross Skims Off 25% of Donations

Postby Soupspoon » Mon Jun 27, 2016 10:48 am UTC

Echo244 wrote:
Soupspoon wrote:It's sad - and also potentially the wrong direction to take, as I know in my area they've struggled to provide the numbers for their bigger contracts, and first aid services for many of the smaller, more locally-connected events have been taken over by private companies. They are turning more into a business, and yet (it seems) being overtaken.
I have noticed more and more "Private Ambulance" vehicles not of a St. John's's brand (and likely a modern-looking vehicle, rather than a repainted surplus vintage vehicle), although I was never quite sure if I'd missed them previously, hence the "and others" aside, but it's interesting to get some first-hand knowledge.

It does make sense that, along with the move towards 'event management companies' taking over from volunteer-run events (probably in part due to fears/threats of litigation should amateur community leaders forget to ensure one or other thing that needs to be certificated, fenced off, licenced or policed for public/child safety issues) and those companies would probably look for tenderable relationships with new and forward-looking First Aid service companies, recruiting straight from the NHS's paramedic ranks rather than treaining up the kind of person who likely starts off as church volounteer or Scout, Guide or Girl's/Boy's-Brigade member of no prior medical vocation.

(The above being an uneducated impression. Although as myself a Cub/Scout/Venturer, in my time, I've seen some possibly recruits and experienced the 'amateur hour'/'mostly good enough' community event management process from 'backstage', 'front-of-house' and visitor. Oh, and 'organising committee' level, too, whether with days, weeks or months of tedious lead-time.. ;) )

Since my youth (and my St. John's and/or First Aid badges upon my scout uniform, much lapsed and now ill-fitting as they now both respectively are) I've sporadically undergone workplace First-Aider training as and when some HR person decided it was necessary, but I honestly don't know how many of those were SJA-provided, although doubtless all occasions were fee-paid courses towards whichever individual or provider were called in. (Also Fire Safety training. Although that was usually the Fire Brigade. Not sure we'd trust a "St. John's" (St. Florian?) amateur Fire Brigade, these days... ;) )

But perhaps I digress.

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Re: Red Cross Skims Off 25% of Donations

Postby Tyndmyr » Mon Jun 27, 2016 2:11 pm UTC

CorruptUser wrote:Stupid question. When you give $1000 to a charity, how do they measure what goes to the end recipient? For example, you give $1000 to some charity that gives massages to wounded veterans. The masseuses are in-house. Does that mean that the charity eats up 100% of the funding?


It's a perfectly good question. Sometimes impact is measured, which is really fuzzy, and subject to a certain degree of subjectivity. Sometimes it goes by percentage, and how you categorize different expenses matters. Plus, doing things in house vs subcontracting them...yeah, it can futz with the numbers(though not to the degree mentioned above, I think), so a single percentage often doesn't wholly capture what's going on.

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Re: Red Cross Skims Off 25% of Donations

Postby sardia » Tue Jul 05, 2016 3:13 pm UTC

Tyndmyr wrote:
CorruptUser wrote:Stupid question. When you give $1000 to a charity, how do they measure what goes to the end recipient? For example, you give $1000 to some charity that gives massages to wounded veterans. The masseuses are in-house. Does that mean that the charity eats up 100% of the funding?


It's a perfectly good question. Sometimes impact is measured, which is really fuzzy, and subject to a certain degree of subjectivity. Sometimes it goes by percentage, and how you categorize different expenses matters. Plus, doing things in house vs subcontracting them...yeah, it can futz with the numbers(though not to the degree mentioned above, I think), so a single percentage often doesn't wholly capture what's going on.
On edge cases percentages aren't very useful. But there are plenty of charities that are so bad that they can't even spend 75% of their funds charity. High spending on marketing/fundraising is another bad sign.

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Re: Red Cross Skims Off 25% of Donations

Postby wumpus » Sat Jul 09, 2016 5:01 pm UTC

Are there any other ways to give blood in the US? Not only are there issues with the Red Cross themselves, but they feel the need to harass anyone so gullible to give them blood by calling multiple times a day demanding more blood (cell, landline, whatever. They hammer them all). I used to give blood, but absolutely refuse to let any be sold by the Red Cross.

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Re: Red Cross Skims Off 25% of Donations

Postby Soupspoon » Sun Jul 10, 2016 2:01 am UTC

Well, if it weren't impracticle (also expensive) or possibly disqualifying (risk of West Nile Virus, if visited the US; like the BSE risk imposed on UK visits, in reverse, I understand) I'd say come over here to donate... ;)

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Re: Red Cross Skims Off 25% of Donations

Postby gmalivuk » Tue Jul 19, 2016 3:29 am UTC

I know LifeSouth runs the drive at Dragon*Con (or at least did when I was last there). I don't know how good they are as a charity or whether you're anywhere in the areas they operate, but I suspect there are other regional organizations, as well.
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Re: Red Cross Skims Off 25% of Donations

Postby pogrmman » Sun Jul 24, 2016 3:37 pm UTC

At least here, the local blood bank -- which is its own organization -- does drives.


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