Black eye for the Red Cross

Black eye for the Red Cross
Wed Mar 1, 7:17 AM ET
Americans dug deep after Hurricanes Katrina and Rita. They donated a record $3.27 billion - $31 for every household in the USA - to charities for hurricane relief.

But giving generously doesn't translate into doing good unless charitable institutions do their part. That's where the American Red Cross, which received about two-thirds of the contributions, stumbled.

Last month, congressional critics said the Red Cross fell short after Katrina as it tried to coordinate shelters, get aid to remote locations and cooperate with grassroots organizations that could have done the job but didn't have the money.

On Monday, internal Red Cross documents and e-mails released by Sen. Charles Grassley (news, bio, voting record), R-Iowa, began to reveal why:

A culture that muzzles internal critics.

An unwieldy, divided board of directors.

Infighting between local chapters and the national office.

An excessive focus on image over achievement, with a $500,000 project to recruit celebrities and turn its then-CEO, who has since quit, into the "face" of the institution. (The Red Cross has been through three CEOs in five years and just named an interim leader.)

All of this is the public's business because of the special status of the Red Cross. Chartered by Congress in 1905, the institution is the only non-profit designated by the federal government to respond to disasters. It gets about $40 million a year in direct government grants, and donations are subsidized through tax deductions.

When an icon slips, as the Red Cross has, it can shake public confidence in all charitable organizations.

No one argues that the Red Cross failed entirely after Katrina. The organization points out that it provided nearly 1,200 shelters across the nation and fielded 225,000 volunteers. The Red Cross says it is working to improve governance and its delivery of service.

Still, with more stable management and without the internal battles, it would likely be able to do far more. Congress, which sets the size and structure of the Red Cross board, might begin by trimming its size by 80%, from the current dysfunctional 50 to 10. Vigorous oversight should follow.

In these perilous times, institutions, even iconic ones, must earn the right to the funds they get. And no charity should be able to squander the public's trust or its donations.

Copyright © 2006 USA TODAY, a division of Gannett Co. Inc.