Time to Account
By Henry Goldstein
September 2005

As of September 19th, almost $700 million had been donated to the American Red Cross in the aftermath of Hurricane Katrina, about 80% of the money donated to all charities. In my opinion, the Red Cross should tell the American people in detail exactly how that's being spent..

How much is allocated for relief, how much for rebuilding, how much to be held in reserve? The Red Cross web site is complete in almost every detail - but not that one. Spokesperson Kara Bunte reports that $388.7 million has been spent on “financial assistance for over 236,000 clients, covering food, shelter, counseling, and getting volunteers to the affected areas.” She also said that “it takes time to get accurate numbers out. Right now, our number one priority is to provide aid.”

Much to its credit, the Red Cross set up a six-month accounting of the funds given for Tsunami: the web site reports that of $556 million it booked, $77 million is in reserve for “future needs.” Is that another way of saying more was given than could be spent? The Red Cross is a first responder, focusing on relief.

Holding 14% of the donations in reserve does not strike me as unreasonable. But given the epic proportions of the Katrina hurricane, the needs of over a million displaced people, and the fact that the Red Cross may be getting more money than it can possibly spend on disaster relief, it is just as reasonable to expect an immediate and ongoing public accounting of Katrina funds. That is essential for three reasons:

Henry Goldstein is president of the Oram Group in New York. Click here to send an email.