Nonprofit Chronicles

Journalism about foundations, nonprofits and their impact


Texas national guardsmen rescuing a woman from her home. Source: US Dept of Defense

The devastation in Houston was terribly sad.

So, in its own way, was the philanthropic response, particularly from business.

Big brands including Amazon, Apple, Google, Starbucks, Walmart and many more are making donations to the American Red Cross, and encouraging their customers to do the same.

Former President Obama retweeted:

It’s understandable. People see TV images. They want to help. That’s wonderful.

But the American Red Cross? Can’t we do better? The question answers itself.

If you haven’t paid attention to the travails of the American Red Cross, please scroll through this series of 17 tweets from Pro Publica linking to deeply-reported stories about how the Red Cross botched its responses to Hurricanes Katrina and Sandy, raised $500m for Haiti and accomplished little, stumbled when trying to help flood victims in Louisiana and Mississippi and, worst of all, misled donors and Congress and anyone else who asked about its work. It’s not just Pro Publica who’s been critical. Jonathan M. Katz, a former AP bureau chief in Haiti and the author of an acclaimed book, The Big Truck That Went By: How the World Came to Save Haiti and Left Behind a Disaster, has a fine story at Slate headlined Don’t Give $20 to the Red Cross. A New York Times editorial said of the American Red Cross:

Its record on large-scale operations is spotty, and given the enormous amount it collects from Americans, the scope of its ambitions and the fact that a chunk of its budget comes from government agencies, there has been less accountability than Americans might expect emanating from its grand marble headquarters in Washington.

That is putting it mildly.

Yet dozens of companies endorse the Red Cross, rewarding its incompetence and stonewalling.

What this suggests is that it’s more important for these big companies to show that they care, by associating themselves with a venerable brand-name charity, than it is for them to actually do as much good as they can for those in need.

It’s also a reminder of the power of brands in the charity world, and how, as a result, well-known charities suck up money that might be better spent on newer and more effective ones. (See my Vox story, Rich charities keep getting richer. That means your money isn’t doing as much good as it could.) That’s the real problem with giving to ineffective charities: The money could do more good elsewhere.

Wait, there’s more.

Guides on how to help disaster victims often advise donors to send money, not goods. (See Consumer Reports and GiveWell, among others.) Bob Ottenhoff, the president of the Center for Disaster Philanthropy, told NPR:

“This is not the time to be donating products or even services. That’s frequently the urge, and most often that is the wrong thing to do….With the floods blocking off streets, when warehouses are not available, there’s no place for these products — there’s no place to store anything, there’s no place to distribute anything. And that’s going to be the case for some time.”

So what’s Amazon doing? It is hosting a shopping portal called Baby2Baby Texas Relief with a Hollywood charity where customers can buy, among other things, socks, towels, baby wipes and toothbrushes for hurricane victims. Last time I checked, more than 11,000 items had been purchased. Baby2Baby, as best as I can tell, has no experience in disaster relief; it does stage a gala that attracts such bold-faced names as Christina Aguilera, Jennifer Garner, Kate Hudson and Jessica Alba, who sits on its board.

Aside from the considerable logistical challenge of getting all those socks and toothbrushes to those in need, there’s the not-insignificant question of whether socks and toothbrushes are what they want.

Tim Ogden, an author and expert on philanthropy who pointed me to the shopping portal, said: “They have no idea what the needs are. There is no way this is anything but a wild guess.”

Wouldn’t it be nice if there was a GiveDirectly for disaster victims in the US? That way, those who are moved to do something could simply send cash to those who need it.

That thought raises a thornier question. If you had $25 or $50 to spare — or more in the case of Amazon ($1m), Apple ($2m), Google ($1.5m), Starbucks ($250k) or Walmart ($10-20M) — how much would you send to hurricane victims in Texas? Businesses have now donated more than $113m to Hurricane Harvey victims, according to CNN Money. This will support people who are fortunate enough to live in one of the richest countries in the world and who, thank goodness, can turn to government safety nets. More than 40,000 households affected by the storm have so far been approved for assistance from the Federal Emergency Management Agency, The Times reports.

They are surely better off than the millions of people directly affected by flooding and landslides in South Asia, which killed 1,000 people this summer. Or the survivors of a mudslide in Sierra Leone that killed 1,000 people in a single day.

That said, it’s hard to know how to help people in Bangladesh or Sierra Leone. It’s easy to text HARVEY to 90999 to make a $10 donation to the American Red Cross.

But doing charity right isn’t easy. It requires the head as well as the heart. That’s especially the case when the charity is coming from corporate foundations or publicly-traded companies that ought to know better — and surely do.


If you’re wondering, I can’t recommend any particular effective charity to those who want to help Hurricane Harvey victims, but my guess is that organizations that are deeply rooted in the region will know what the needs are better than big national NGOs. They also tend to be more accountable and less bureaucratic. Global Giving, a nonprofit I trust, has a Hurricane Harvey Relief Fund to support the work of local groups. The Greater Houston Community Foundation is also collecting donations for local nonprofits–food banks, shelters and the like– to meet immediate and long-term needs.

9 thoughts on “Big business says: Give to the American Red Cross. But why?

  1. Camilla Day says:

    Hi Marc, I would love to help speak out.
    Do you have any ideas about how?

    Sent from my iPad


    1. Marc Gunther says:

      Perhaps a note or email to the American Red Cross asking them to be more transparent. No one expects perfection in disaster relief. But the ARC could better explain what it is doing with the money raised, how it is learning from past mistakes and future plans for effectiveness. I think the No. 1 issue here is accountability.


  2. Thought you’d find this piece by the NPR ombud relevant to the discussion, Marc. Thanks for the good work.


  3. Ed Kramer says:

    I was a Red Cross Disaster volunteer for over 20 years (in Bucks County, PA), and I can attest that the main service we rendered to victims was to give them cash. (After following sensible fraud protection protocols.)

    A few qualifiers are that I have never worked a large international, or even domestic, major disaster. My work was all on small local disasters such as apartment fires and floods, and that my experience is from over 20 years ago.


  4. David Crane says:

    Marc – you are so right and it is so disappointing! I saw firsthand in Haiti how the Red Cross was a nonfactor in Haitian Relief and our own experience at NRG was that our financial aid was most effective when combined with our own technical expertise (in our case, solar installations on hospitals, clinics, orphanages, schools and social enterprises). It was an immense morale booster for employees who volunteered and something everyone in the Company was quite proud of – not sure why so many corporations give moeny but maintain such a distance from the tragedy when they have the skills, the expertise and the logistics to help directly,


  5. Bob Fleshner says:

    Thanks for great reporting on this issue Marc. It’s frustrating to think how much of our money ends up wasted while people continue to suffer.


  6. It’s also worth mentioning that the Red Cross is a member of (rather than the other way around) the national “Voluntary Organizations Active in Disasters” (VOAD) network. This network of nonprofits helps to coordinate response during a disaster, to maximize efficient deployment of resources from the nonprofit sector and minimize “turf battles” (Yes, depressingly, these happen in a disaster: often between large, national organizations that descend ineffectively during a disaster, displacing small, effective, local nonprofits, hogging the resources and jamming the communication and transportation channels). I would encourage anyone interested to get more involved with their local/regional VOAD, which is no doubt (like the Oregon VOAD, even now, chaired by Dean Ably of the Oregon Food Bank) coordinating local contributions and assistance to the organizations on the ground in Houston, Louisiana, and other affected areas.

    What we need is not more donations to bigger organizations, but more effective use of the limited resources. As always, your reporting nails it, Marc. The problem is not that American donors aren’t generous enough, it’s that they aren’t thinking enough about where their donation goes, or who it’s really helping.


    1. Dean Alby–typo in my last response.


      1. Anthony DeCristofaro says:

        Perhaps that was a “malapropism” implying subconsciously that small organizations might do things more ABLY than the behemoths?


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