9 ms·

The biggest revelation to me in that article, which I feel should be highlighted more, is that the Red Cross provides almost zero information about how it spend

by avar 11y ago

The biggest revelation to me in that article, which I feel should be highlighted more, is that the Red Cross provides almost zero information about how it spends its money. It refuses to provide more than very vague information about how the money was spent in Haiti (information like "35% of $488 million on shelters"), with no specific details about what projects they spent the money on, how those projects went etc. When the author challenged the general counsel of the Red Cross to provide more detailed information ("because clearly you must have it") he just gave her some evasive boilerplate spiel about having provided the summary information he'd provided already. How can anyone donate to a charity that's so stunningly opaque about how it spends its money?

nodata 11y ago
> the Red Cross provides almost zero information about how it spends its money. If that is true, how can Charity Navigator rate it 80.5/100? http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=3277 http://www.charitynavigator.org/index.cfm?bay=search.summary...
- avar 11y ago
  I don't know, perhaps they're particularly opaque about Haiti or other "big" disaster relief efforts, or perhaps other charities are just as bad. I'm just summarizing what I took from the article, in particular skip ahead to around 4m50s. The audio is much clearer than the transcript on this issue.
- zabuni 11y ago
  The article basically implies they use exceedingly broad categories, and don't exactly characterize everything the way they should. See also this Propublical article: https://www.propublica.org/article/how-the-red-cross-raised-half-a-billion-dollars-for-haiti-and-built-6-homes https://www.propublica.org/article/how-the-red-cross-raised-... There's a chart half way through that shows, by NPR and Propublica's estimates that instead of 90% spent on actual charity, they only spend 60%. This would tank their rankings in places like Charity Navigator and Givewell. So the short answer to your question, is that they are vague as hell about how they spend the money, and they probably cook the books.
- bitserf 11y ago
  Looks like they're on a CN watchlist, as a result of this reporting. http://www.charitynavigator.org/index.cfm?bay=search.news&orgid=3277#.VXGs81JXenM http://www.charitynavigator.org/index.cfm?bay=search.news&or...
- shawnee_ 11y ago
  Have a look at RC's "Annual Report" from 2014 ... http://www.redcross.org/images/MEDIA_CustomProductCatalog/m44340081_2014AnnualReport.pdf http://www.redcross.org/images/MEDIA_CustomProductCatalog/m4... This is a fluff piece full of pictures and words. No numbers or financial statements. On page 26 there are a couple pie charts that vaguely outline some general categories of outflows and inflows. No details. If a NYSE company (or even a private company) tried to put out an Annual Report with this kind of glossed-over detail, they...well, they couldn't get away with that. Guidestar.org is not quite as nice, rating it 3 out of 5 stars: http://www.guidestar.org/organizations/53-0196605/american-national-red-cross.aspx#financials http://www.guidestar.org/organizations/53-0196605/american-n... People who run these 'not-for-profit' 501(C)(3) institutions are ironically not held quite as "accountable" as people running normal businesses who have to report to shareholders. In the N4P world, where the "shareholders" are reduced to the general public or generic taxpayers or even to the disaster victims themselves -- it's a lot more difficult to get them to own up accountable to the people they serve. Most of the time the donors are just happy to get their tax write-off and they leave it there.
  - maxerickson 11y ago
    They do publish their financial statements and tax returns, see here: http://www.redcross.org/about-us/publications http://www.redcross.org/about-us/publications This seems to be a common pattern with non profits, to separately issue their financials and annual reports. I'm not sure why.
    - reagency 11y ago
      The report is advertising. They don't want donors to see the financials.
  - bduerst 11y ago
    >This is a fluff piece full of pictures and words That's because it's for benefactors, and not the publicly-available IRS-990 form that details what you're looking for. If you want major financials, you can see them here: http://990s.foundationcenter.org/990_pdf_archive/530/530196605/530196605_201406_990.pdf http://990s.foundationcenter.org/990_pdf_archive/530/5301966... It also gives salaries of the execs too (president makes $550k/yr)
bigtones 11y ago
That, and the incompetence they have in spending it. I will not donate to red cross disaster relief again.
danso 11y ago
More context on this project: http://www.propublica.org/series/red-cross http://www.propublica.org/series/red-cross After the first investigative story into their Hurricane Sandy response efforts [1], the Red Cross argued that how it spent its money was a "trade secret" [2]. It later stepped back from that position [3]. Later that year (Oct. 2014), ProPublica/NPR published their first indepth story about Red Cross [4]; I haven't read the entire project but I think the OP is the second big feature. And full disclosure: I used to work at PP but not on this project. [1] http://www.propublica.org/article/long-after-sandy-red-cross-post-storm-spending-still-a-black-box/ http://www.propublica.org/article/long-after-sandy-red-cross... [2] http://www.propublica.org/article/red-cross-how-we-spent-sandy-money-is-a-trade-secret/ http://www.propublica.org/article/red-cross-how-we-spent-san... [3] http://www.propublica.org/article/red-cross-reverses-stance-on-sandy-spending-trade-secrets http://www.propublica.org/article/red-cross-reverses-stance-... [4] http://www.propublica.org/article/the-red-cross-secret-disaster/ http://www.propublica.org/article/the-red-cross-secret-disas...
sopooneo 11y ago
Could it be that actually getting things done in horrible environments requires interacting with, and paying off, some shady people? This is of course a charitable guess, but could it be that the Red Cross has made a decision to make morally questionable choices in the short term in support of the greater good, and they know they can't publish such truths and continue to exist?
- onion2k 11y ago
  If the only way they can exist is by doing things so morally reprehensible that they have to keep everyone ignorant of their actions then they shouldn't exist.
  - KJasper 11y ago
    That's great in theory, but should the people suffer more of Haiti because of these individuals? I'm guessing that none of these organisations could exist without compromising things for the greater good.
    - onion2k 11y ago
      This assumes that the Red Cross is the only organisation that could help in Haiti, and that their approach is the only one that could possibly work. Neither of those things are necessarily true. If they're bribing people then they should report that - not the details (although maybe they should), but they should at least be saying "We raised $500m, and spent $50m on bribes so we could get the job of helping people done. It sucks but that's what we're working with here." Also, at what point does "compromising things for the greater good" become untenable? To go down the argumentum ad absurdum route, if we learned that the Red Cross were hiring contract killers to eliminate officials that were standing in the way of building homes for Haitians would that be something they shouldn't do, or that they should do but they should keep quiet about? At some point it is right to say "Let's not do that even if it means people will suffer." That's definitely before killing people, obviously, but is it before bribing people?
  - scarmig 11y ago
techpeace 11y ago
If you find that distressing, consider donating to https://givedirectly.org/ https://givedirectly.org/ instead. They keep their admin costs very low, they're remarkably transparent, and all they do is hand your money over to the extremely poor - a tactic with a growing amount of empirical evidence supporting its efficacy.
anigbrowl 11y ago
While it never provides as much information as one might like, I've found it extremely instructive to look up the 'form 990' of any nonprofit I deal with (including if I am considering applying for a grant or something). You can find out how much the executives are paid, and something about their major relationships with both donors and receivers. You can also learn about relationships with other nonprofits, which can be particularly interesting in the political sphere. For example, if you look up the 990s of some conservative immigration organizations, you quickly find that what seem like 10 or 12 independent advocacy groups representing a broad swell of public opinion are actually all financed and managed by the same small set of people. Or that quite a few nonprofits don't actually do very much beyond draw down the bequest left by some dead rich person who cared about a particular issue. It'll make you view the charitable tax deduction ver y differently - there's a lot of people making a nice living and effectively getting a 20% subsidy from taxpayers.
ytdht 11y ago
most charities appears to use up the money given to them for purposes other then their stated primary goal... it is always better to donate directly to the people who needs help (unless maybe if you are only doing it for a tax break)
deleted 11y ago
[deleted]
omouse 11y ago
This is actually a common issue with charities; there are few sources of data on their effectiveness and no one wants to poke the dragon so to speak because there are hundreds of thousands transferred each day to charities.

by avar 11y ago

nodata 11y ago

> the Red Cross provides almost zero information about how it spends its money. If that is true, how can Charity Navigator rate it 80.5/100? http://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=3277 http://www.charitynavigator.org/index.cfm?bay=search.summary...

avar 11y ago
I don't know, perhaps they're particularly opaque about Haiti or other "big" disaster relief efforts, or perhaps other charities are just as bad. I'm just summarizing what I took from the article, in particular skip ahead to around 4m50s. The audio is much clearer than the transcript on this issue.
zabuni 11y ago
The article basically implies they use exceedingly broad categories, and don't exactly characterize everything the way they should. See also this Propublical article: https://www.propublica.org/article/how-the-red-cross-raised-half-a-billion-dollars-for-haiti-and-built-6-homes https://www.propublica.org/article/how-the-red-cross-raised-... There's a chart half way through that shows, by NPR and Propublica's estimates that instead of 90% spent on actual charity, they only spend 60%. This would tank their rankings in places like Charity Navigator and Givewell. So the short answer to your question, is that they are vague as hell about how they spend the money, and they probably cook the books.
bitserf 11y ago
Looks like they're on a CN watchlist, as a result of this reporting. http://www.charitynavigator.org/index.cfm?bay=search.news&orgid=3277#.VXGs81JXenM http://www.charitynavigator.org/index.cfm?bay=search.news&or...
shawnee_ 11y ago
Have a look at RC's "Annual Report" from 2014 ... http://www.redcross.org/images/MEDIA_CustomProductCatalog/m44340081_2014AnnualReport.pdf http://www.redcross.org/images/MEDIA_CustomProductCatalog/m4... This is a fluff piece full of pictures and words. No numbers or financial statements. On page 26 there are a couple pie charts that vaguely outline some general categories of outflows and inflows. No details. If a NYSE company (or even a private company) tried to put out an Annual Report with this kind of glossed-over detail, they...well, they couldn't get away with that. Guidestar.org is not quite as nice, rating it 3 out of 5 stars: http://www.guidestar.org/organizations/53-0196605/american-national-red-cross.aspx#financials http://www.guidestar.org/organizations/53-0196605/american-n... People who run these 'not-for-profit' 501(C)(3) institutions are ironically not held quite as "accountable" as people running normal businesses who have to report to shareholders. In the N4P world, where the "shareholders" are reduced to the general public or generic taxpayers or even to the disaster victims themselves -- it's a lot more difficult to get them to own up accountable to the people they serve. Most of the time the donors are just happy to get their tax write-off and they leave it there.
- maxerickson 11y ago
  They do publish their financial statements and tax returns, see here: http://www.redcross.org/about-us/publications http://www.redcross.org/about-us/publications This seems to be a common pattern with non profits, to separately issue their financials and annual reports. I'm not sure why.
  - reagency 11y ago
    The report is advertising. They don't want donors to see the financials.
- bduerst 11y ago
  >This is a fluff piece full of pictures and words That's because it's for benefactors, and not the publicly-available IRS-990 form that details what you're looking for. If you want major financials, you can see them here: http://990s.foundationcenter.org/990_pdf_archive/530/530196605/530196605_201406_990.pdf http://990s.foundationcenter.org/990_pdf_archive/530/5301966... It also gives salaries of the execs too (president makes $550k/yr)

bigtones 11y ago

That, and the incompetence they have in spending it. I will not donate to red cross disaster relief again.

danso 11y ago

More context on this project: http://www.propublica.org/series/red-cross http://www.propublica.org/series/red-cross After the first investigative story into their Hurricane Sandy response efforts [1], the Red Cross argued that how it spent its money was a "trade secret" [2]. It later stepped back from that position [3]. Later that year (Oct. 2014), ProPublica/NPR published their first indepth story about Red Cross [4]; I haven't read the entire project but I think the OP is the second big feature. And full disclosure: I used to work at PP but not on this project. [1] http://www.propublica.org/article/long-after-sandy-red-cross-post-storm-spending-still-a-black-box/ http://www.propublica.org/article/long-after-sandy-red-cross... [2] http://www.propublica.org/article/red-cross-how-we-spent-sandy-money-is-a-trade-secret/ http://www.propublica.org/article/red-cross-how-we-spent-san... [3] http://www.propublica.org/article/red-cross-reverses-stance-on-sandy-spending-trade-secrets http://www.propublica.org/article/red-cross-reverses-stance-... [4] http://www.propublica.org/article/the-red-cross-secret-disaster/ http://www.propublica.org/article/the-red-cross-secret-disas...

sopooneo 11y ago

Could it be that actually getting things done in horrible environments requires interacting with, and paying off, some shady people? This is of course a charitable guess, but could it be that the Red Cross has made a decision to make morally questionable choices in the short term in support of the greater good, and they know they can't publish such truths and continue to exist?

onion2k 11y ago
If the only way they can exist is by doing things so morally reprehensible that they have to keep everyone ignorant of their actions then they shouldn't exist.
- KJasper 11y ago
  That's great in theory, but should the people suffer more of Haiti because of these individuals? I'm guessing that none of these organisations could exist without compromising things for the greater good.
  - onion2k 11y ago
    This assumes that the Red Cross is the only organisation that could help in Haiti, and that their approach is the only one that could possibly work. Neither of those things are necessarily true. If they're bribing people then they should report that - not the details (although maybe they should), but they should at least be saying "We raised $500m, and spent $50m on bribes so we could get the job of helping people done. It sucks but that's what we're working with here." Also, at what point does "compromising things for the greater good" become untenable? To go down the argumentum ad absurdum route, if we learned that the Red Cross were hiring contract killers to eliminate officials that were standing in the way of building homes for Haitians would that be something they shouldn't do, or that they should do but they should keep quiet about? At some point it is right to say "Let's not do that even if it means people will suffer." That's definitely before killing people, obviously, but is it before bribing people?
- scarmig 11y ago

techpeace 11y ago

If you find that distressing, consider donating to https://givedirectly.org/ https://givedirectly.org/ instead. They keep their admin costs very low, they're remarkably transparent, and all they do is hand your money over to the extremely poor - a tactic with a growing amount of empirical evidence supporting its efficacy.

anigbrowl 11y ago

While it never provides as much information as one might like, I've found it extremely instructive to look up the 'form 990' of any nonprofit I deal with (including if I am considering applying for a grant or something). You can find out how much the executives are paid, and something about their major relationships with both donors and receivers. You can also learn about relationships with other nonprofits, which can be particularly interesting in the political sphere. For example, if you look up the 990s of some conservative immigration organizations, you quickly find that what seem like 10 or 12 independent advocacy groups representing a broad swell of public opinion are actually all financed and managed by the same small set of people. Or that quite a few nonprofits don't actually do very much beyond draw down the bequest left by some dead rich person who cared about a particular issue. It'll make you view the charitable tax deduction ver y differently - there's a lot of people making a nice living and effectively getting a 20% subsidy from taxpayers.

ytdht 11y ago

most charities appears to use up the money given to them for purposes other then their stated primary goal... it is always better to donate directly to the people who needs help (unless maybe if you are only doing it for a tax break)

deleted 11y ago

[deleted]

omouse 11y ago

This is actually a common issue with charities; there are few sources of data on their effectiveness and no one wants to poke the dragon so to speak because there are hundreds of thousands transferred each day to charities.