Red Cross: At the reins of relief

Agency tested, criticisms arise as agency leads hurricane aid

06:40 AM CDT on Sunday, October 9, 2005

By KIM HORNER / The Dallas Morning News

On a typical day, the local American Red Cross responds to a couple of house fires. Nothing has been typical since Aug. 29.

The day Hurricane Katrina slammed into the Gulf Coast was the first on a long road for the agency – and the beginning of the largest relief effort in its history.The Red Cross hurried to open shelters, including those at Reunion Arena and the Dallas Convention Center, for those who had fled the storm. Hurricane Rita soon brought another wave – thousands more seeking safety in the Dallas-Fort Worth area.

More than 25,000 have slept on the nonprofit's cots in the region – next to Houston, the second-largest number sheltered in the nation. Some workers have gone 40 days without a day off. JIM MAHONEY/DMN Late last week, Michael "We've definitely been tested," Dallas Red Cross spokeswoman Anita Foster said. and Marcia Kay of Nederland, Texas, were The Washington, D.C.-based charity has been at the forefront of hurricane relief efforts among fewer than 200 nationwide. But that role has not come without criticism. hurricane evacuees remaining at Reunion People have complained of endless waits on the Red Cross' Arena. The Red Cross is financial assistance hotline and an uneven response in some housing 34,000 people in impoverished communities. Others are concerned that the agency, 12,000 hotel rooms in which received criticism for its handling of 9-11 relief funds, has Dallas, the greatest number received the lion's share of donations – about $1.3 billion of evacuees in hotels in the nationally. nation, the agency says.

More challenges await the Red Cross, even as it plans to close its JIM MAHONEY/DMN last big hurricane shelter – at Reunion Arena. The shelter at Reunion Arena was among 1,150 The Red Cross is housing 34,000 people in 12,000 hotel rooms in that the Red Cross Dallas, the greatest number of evacuees in hotels in the nation, estimates it set up across according to the Red Cross. The charity is working on plans to the nation for hurricane provide long-term assistance. evacuees. The charity is planning to close its last "The community is going to absorb those individuals," said Cheryl big hurricane shelter at the Sutterfield-Jones, chief executive officer of the Red Cross' Dallas arena and provide chapter. "They need housing and medical care – the needs have long-term aid for evacuees. really grown in our community."

'Omnipresent'

The Red Cross estimates it will need $2 billion nationwide for shelter, food, emergency financial assistance and mental health services for Hurricane Katrina evacuees. No goal has been set for Hurricane Rita.

Most of the donated $1.3 billion – $906 million – has been spent on financial assistance, including the debit cards given to evacuees. An additional $110 million has paid for running shelters, and $112 million has gone toward hotel expenses. The

1 of 4 Federal Emergency Management Agency recently announced that it would reimburse the nonprofit for those hotel costs.

The charity says at least 91 cents of every dollar donated goes to assist disaster victims. On its Web site, the Red Cross touts that the nonprofit watchdog Charity Navigator gave the organization its highest rating of four stars at www.charitynavigator.org.

"They're omnipresent with shelters everywhere," said Trent Stamp, Charity Navigator's executive director. "We should hold them up to a high standard."

The organization evaluates charities based on their federal tax returns. Mr. Stamp cautioned that the numbers only tell how well the agency has done in the past and not on current relief operations. The agency's latest tax return covered the fiscal year ending June 30, 2004.

"You can verify them and check them out, and then you just have to drop your check in the mail and hope and pray they do good work this time," he said.

Much has changed since the agency faced questions after Sept. 11, 2001, when donors learned that millions given to the agency's Liberty Fund for victims of the terrorist attacks would be set aside to cover other disasters.

The Red Cross quickly shifted the money back to its Sept. 11 fund, and the agency's president resigned.

"We felt the Red Cross should have done more to help donors understand that some of the money might go to other disasters besides the 9-11 victims," said Art Taylor of the Better Business Bureau Wise Giving Alliance, a watchdog agency that temporarily took the charity off its list of acceptable charities.

Since then, the Red Cross has worked to make sure gifts go only where donors intended, Mr. Stamp said. The Red Cross has regularly posted updates on its Web site (www.redcross.org) about how much money it has spent on shelters, financial assistance and accommodations for hurricane evacuees.

The agency's Web site asks online donors which of several causes they want to support: Hurricane Katrina, Hurricane Rita, their local Red Cross chapter or the national disaster fund. Once the Red Cross reaches the amount needed for services related to one disaster, it will alert donors so they can choose another cause.

"The Red Cross really learned their lesson," Mr. Stamp said. "They seem to be painfully transparent and encouraging donors to earmark their gift."

But Eugene Tempel, executive director of the Center on Philanthropy at Indiana University, said such targeted gifts can cause other problems for nonprofits, which still need money for salaries, rent and other costs.

"People want to give, they want to help directly," Mr. Tempel said. "One of the lessons the American public hasn't learned from these disasters is that it costs money to carry out this work."

The most common complaint about the Red Cross' handling of the hurricane relief effort has been the delay in financial aid.

On hold for hours

Callers to the national hotline (1-800-975-7585) report getting busy signals at all times of the day or getting put on hold for hours.

"I sat down one afternoon and just hit redial over and over. You couldn't even get put on hold at that point," said Rusty Templet, a New Orleans resident who evacuated to Dallas but went back home this week. After several frustrating days of dialing the hotline, Mr. Templet finally got through Sept. 27 and received a check for about $1,000 within two days.

"On a lark, I tried the number one morning at 6:55 a.m. or 7 a.m., and a real person answered. I thought I had the wrong number."

Ms. Foster said the agency answered calls to the hotline as fast as it could.

2 of 4 "The line was absolutely overwhelmed with so many people needing help simultaneously," she said. "We had millions, literally, all trying to reach the number. It overwhelmed the phone systems."

The Red Cross set up centers in many large cities, including Dallas, to hand out debit cards in person. But even that system has resulted in delays for evacuees. The Dallas operation, which has distributed $7.1 million worth of assistance, will continue as needed, Ms. Foster said.

Other problems – and questions – have surfaced:

•The Washington-based Black Leadership Forum criticized the Red Cross for moving too slowly into the most-damaged parts of Louisiana and Mississippi.

When the charity did enter those hard-hit areas, it set up in the downtown sections of many cities, said Dr. Joe Leonard, executive director of the civil rights organization. He said that was out of the way for the poorest parts of town with high concentrations of black residents and other minorities.

Dr. Leonard said people were left to fend for themselves or rely on small local groups and churches. In a sense, the Red Cross became the "fourth responder," he said.

"They're the fourth responders, yet they're getting the gold medal. They're getting the gold literally and figuratively," said Dr. Leonard, who thinks the agency should share its funds with other groups.

Red Cross spokeswoman Michelle Hudgins said the agency moved as fast as it could to get into all hurricane-ravaged areas. In addition, she said, federal officials told the agency it was not safe to provide services in New Orleans after the storm hit.

•On Sept. 25, Richard Walden, president and CEO of the relief agency Operation USA, expressed concerns about the Red Cross' monopoly on fundraising. He said the Red Cross does not deserve the bulk of donations, especially since it had pre-existing agreements with the federal government to be reimbursed.

The Red Cross refuted those claims in a statement, saying it had no pre-existing agreements. FEMA has announced that it will reimburse the agency for providing hotel rooms to evacuees.

Money woes

Given the amount of money donated to hurricane relief, many local social service leaders worry that donors will be tapped out.

"We have a concern about the limited resources people have," said Gary Godsey, president and CEO of the United Way of Metropolitan Dallas, which recently started its annual fundraising drive.

The United Way's motto this year is "Give twice" – to hurricane relief and to other charities struggling to meet existing needs in addition to the influx of evacuees who will need long-term help.

Even the Red Cross is feeling stretched. Donations for hurricane relief, including more than $5 million sent directly through the Dallas chapter, get forwarded to the national office. The local chapter draws money from that fund as needed for hurricane relief programs only, Ms. Sutterfield-Jones said.

"A lot of people say, 'Wow, you're doing great here in Dallas because you've got this $5 million.' But we process that and send it on," she said.

The local chapter has fallen behind on its own fundraising, which covers the cost of handling local disasters. In September, that included 28 single-family home fires and six apartment fires.

Ms. Sutterfield-Jones hopes donors will keep digging into their pockets.

"We need everyone to support all local nonprofits, including the Red Cross, to support ongoing disaster needs," she said.

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Red Cross relief: Read the transcript of a chat about volunteer opportunities and the efforts of the Dallas chapter to help evacuees.

Online at: http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/DN-redcross_09met.ART0.North.Edition2.4282646.html

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