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Gustav Relief Sends Red Cross Into Debt

Brittany Norman comforts her friend's daughter, Sa'Miya Williams, at the American Red Cross shelter at the CenturyTel Center in Bossier City, La.
Brittany Norman comforts her friend's daughter, Sa'Miya Williams, at the American Red Cross shelter at the CenturyTel Center in Bossier City, La. (By Henrietta Wildsmith -- Shreveport Times Via Associated Press)
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The charities could collect more donations in coming days, but with Gustav nearly gone from the headlines, some officials fear they might not break even.

"The attention of the general public moved off Hurricane Gustav so quickly," said Jeffrey Towers, Red Cross chief development officer. "People were expecting something so dramatic and vast relative to Katrina that, when the storm came to shore less than a category 4, the immediate response was, 'Oh, that wasn't so bad.' "

Maj. George Hood of the Salvation Army said, "We're being very taxed with these disasters this year in terms of responding and having a comfort level that the economics are going to work out."

The Red Cross has federal responsibility for providing relief to the nation's biggest catastrophes, but it operates largely on private donations and receives little government money.

"We're all a little confused about how we're supposed to pay for the damage wrought by national disasters," said Melissa Berman, president of Rockefeller Philanthropy Advisors. "I think a lot of people ask, 'Isn't this supposed to be what our government is for?' The Red Cross is in the strange and unique position of being perceived as sort of a private organization and sort of a public organization."

After facing sharp criticism for its fumbled response to Katrina, the Red Cross did not take a chance on Gustav, which had the potential to be the biggest disaster since. The organization dispatched more than 3,000 volunteers to the Gulf Coast, blanketing the region with supplies and setting up more than 500 shelters in 14 states.

The effort is expensive, and the Red Cross, whose disaster relief fund was depleted following the recent Midwest floods, took out loans. Forecasting catastrophic damage in Gustav's wake, Red Cross officials banked on Americans' generosity to recover their costs.

"What that creates is a wide gulf between the organizations that planned for the worst and expended resources and the donors who are holding back because they don't see as much of a need," said Eric Kessler, managing director of Arabella Philanthropic Investment Advisors.

Americans historically respond to major disasters by giving. About two-thirds of U.S. households donated to charities after the terrorist attacks of Sept. 11, 2001, and after Katrina, said Patrick M. Rooney, director of the Center on Philanthropy at Indiana University.

"We're pretty responsive to major disasters," Rooney said. "We're not so responsive to minor disasters."

Ellen Lee, president of the Greater New Orleans Foundation, said this is troubling. "If it takes mass death and destruction for people to give to relief efforts, I'm not sure that's the best," she said.

To donate to the American Red Cross, call 800-RED-CROSS or go tohttp://www.redcross.org.


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