Following the money
Elisabeth Ehrling of Silverthorne describes herself as an optimist. The Silverthorne resident has already donated to several animal-aid groups and handed over a $10 bill at the Red Cross table during a visit to Copper Mountain last Sunday – a fraction of what she plans to contribute to the hurricane relief effort. Though she is unsure of exactly where her money goes after it settles into the bottom of the bucket, she doesn’t doubt the Red Cross, the most prominent aid organization helping Katrina victims. “You have to have confidence,” Ehrling said. “If you don’t, then nobody would ever donate anything or try to help anybody. I trust that my money is going to the right place.”Ehrling’s trust is shared by millions of Americans, who combined to donate nearly $200 million to the Red Cross for hurricane relief as of last Friday. Still, no charity converts every penny it receives into service. “There are lots of expenses that people don’t see,” said Doug Hauth, chief development officer of the Red Cross’ Mile High Chapter in Denver. “It’s not a matter of ‘we’re a free organization and everything in the country is free for us because we have a big disaster going on.’ We’re really proud if we can keep administrative costs between 5 and 9 percent.” Putting 91 percent of their donations to charitable use has earned the Red Cross an “A-” rating from the American Institute of Philanthropy, a watchdog group that analyzes the tax returns of nonprofit groups, looking for waste.
Though roughly 90 cents of her $10 will fail to reach the Gulf Coast, Ehrling isn’t concerned. “People don’t work for free, you have to accept that,” she said, though she did express some uncertainty as to what aspect of the relief effort her money was going to.Hauth offered an easy solution to those concerns. When giving to the Red Cross, donors can specify on their check where they want that money to go, whether to the National Disaster Relief Fund or to Katrina victims in Mississippi, he said. “We absolutely honor donor intent to the penny,” Hauth said, though he added that checks made out to the National Disaster Relief Fund in general are easier to allocate quickly.Likewise, there is a difference between donating to the “Mile High Chapter,” and giving to the “Mile High Chapter Disaster Fund.” General funds (those without stipulations) pay employees’ salaries and other administrative costs, though earmarking a donation for disaster relief doesn’t guarantee that the gift will pay for only blankets and food.”Some salaries are directly associated with disaster relief,” Hauth said. “If you didn’t have disaster staff organizing the volunteers and providing the infrastructure for them to go out and do their jobs, you wouldn’t have disaster relief.” The state of Colorado boasted more than 1,300 volunteers last year, but the Mile High Chapter is processing more than 6,000 in the wake of the hurricane. One of six chapters in Colorado, the group is handling more than 1,000 calls per day and has been forced to hire temporary workers to keep up.In addition to answering calls, the people making relief efforts possible are at the front desk sorting mail, at the bank cashing checks and in the mail room sending confirmation notices to donors that their checks were received.
But even after volunteers have returned home and the water has long since drained from the French Quarter, the Red Cross will be far from inactive. “Once people’s immediate needs are met, we try to provide them with the means to help them get their lives started again,” Hauth said. “In this case, that could go on for a year or two or three. I think people don’t understand that. “They think maybe we go in and we serve a few meals and we give food and drink and we’re gone, and that’s not the case,” he said.Where your money is going on the Gulf Coast (through the American Red Cross)– Mass care: 45 percent– Family services: 33 percent– Disaster mental health services: 9 percent
— Service support: 5 percent– Administration: 3 percent– Disaster health services: 2 percent– Community services: 1 percent– Fundraising: 1 percent– Welfare inquiry: ~1 percentTotal funds (2004): $116,664,000For more information visit http://www.redcross.org/pubs/#report
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