Saturday, December 6, 2014

Checkout the charities you donate to--some questions about Red Cross accounting

A reminder to checkout the charities you might donate to this year.  There are some questions about how the Red Cross is accounting for its contributions and expenses:
"The American Red Cross regularly touts how responsible it is with donors' money. "We're very proud of the fact that 91 cents of every dollar that's donated goes to our services," Red Cross CEO Gail McGovern said in a speech in Baltimore last year. "That's world class, obviously."
McGovern has often repeated that figure, which has also appeared on the charity's website. "I'm really proud" that overhead expenses are so low, she told a Cleveland audience in June.
The problem with that number: It isn't true."
Via propublica.org

Here's the Red Cross Response:
"We firmly stand by the fact that an average of 91 cents of every dollar the American Red Cross spends is invested in humanitarian services and programs. In a wide range of our materials- including donor stewardship reports and publicly available financial statements, the Red Cross has used the wording that an average of 91 cents of every dollar the Red Cross spends is invested in humanitarian services and programs. This has been a long term practice for the Red Cross.
There are some instances where the language used has not been as clear as it could have been, and we are clarifying that language. Asserting that this is an attempt to mislead the public is absolutely and unequivocally untrue."

I don't have enough information to know who is exactly right, but either way, I encourage you to examine the charities you might donate to.  Charity Navigator is a good source (they pretty much agree with the Red Cross accounting of expenses, by the way)

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