Red Cross Asks Congress For Millions in Storm Aid
Tuesday, September 16, 2008
The American Red Cross, which is plunging into debt to provide relief after back-to-back Gulf Coast hurricanes, said yesterday that it has asked Congress for $150 million in emergency funding to replenish its disaster relief reserves.
Red Cross officials said the request is unusual for the 127-year-old nonprofit organization. It last turned to the federal government for help in responding to disasters in 2004, when four hurricanes hit Florida. The agency sought and received $70 million in federal aid but returned about half of that allocation.
In its largest aid effort since Hurricane Katrina three years ago, the Red Cross anticipates spending as much as $70 million on Hurricane Gustav recovery efforts, and agency officials said it could spend as much or more on relief from Hurricane Ike, which devastated parts of Texas over the weekend.
Last week, the Red Cross launched a national campaign to recover those costs. As of yesterday it had raised $10 million, spokeswoman Suzy C. DeFrancis said.
"While the nation is sleeping, the Red Cross is tracking the weather and moving workers and volunteers, cots and blankets, meals and clean-up kits, communications equipment and Emergency Response Vehicles into many different states," Red Cross President Gail J. McGovern wrote in a letter to congressional leaders. "Many times, the country doesn't see the cost of those preparations and we are not always able to recoup our expenses."
DeFrancis said the federal request is a last resort and described the agency's finances as dire, in part because of an "extraordinary" hurricane season. "We are reaching a point where we thought we had to go to Congress to get help," she said.
Congressional appropriations staff members said yesterday that lawmakers were reviewing the request and had not decided whether to approve it. Under its congressional charter, the Red Cross is required to respond to natural disasters, but it is independent from government and operates largely on private donations.
With its reputation sullied by past management scandals and a botched response to Katrina, the agency has struggled in recent years to raise money for disaster relief. In the weak economy, the fundraising challenges have been exacerbated.
In seeking federal assistance, the Red Cross risks blurring its status as an independent charity and being seen as a quasi-governmental organization, said Paul C. Light, a professor of nonprofit groups and the federal bureaucracy at New York University.
"I understand it, and I think it may be the only way to deal with the current crisis," Light said. But, he said, "it's a risky gamble. . . . It's a particularly difficult time to go to Congress for money because it sounds like a bailout. They don't want to become the Bear Stearns of national charities."
Light said that if the Red Cross takes federal money, it will effectively become a "de facto arm of the federal government," which could make donors skeptical and less likely to contribute.