Discussion question responses and analysis

¶ … misuse of funds by an administrator in a human services organization. Then, explain how the example affected public trust. Be specific, and use examples to illustrate your point.

The Red Cross has been under fire more than once for its alleged misappropriation of its funds and for gaps in its accountability of its money as well as for its inability to adequately deal with emergencies. The result is that the Red Cross has been experiencing a steady declension in its reputation and prominence.

In 2007, the U.S. Senate Finance Committee, in charge of and monitoring nonprofit organizations, released thousands of pages of internal Red Cross documents that point to the agency's inability to effectively manage billions of dollars in donations releasing a flurry of public and private protest. Volunteers too, according to U.S. Senator Charles Grassley (Iowa) who chaired the Committee, complained about misuse of funds and property, and even possible criminal activity within the organization.

All of this gives the worst possible reputation to the Red Cross, an organization whose name was sonorous with charity and quality altruism.

Other criticisms focused on the Red Cross neglecting low-income areas and remote Gulf Coast communities, refusing to cooperate with local relief agencies and failing to set up an effective system for dealing with the massive number of phone calls from people who are requesting help.

In fact, people have been calling on the Red Cross to resign as the government's de facto instrument in international philanthropic (disaster relief agency) or for the government to forcefully intervene and reform the organization.

These allegations are not new. Survivors of hurricanes Katrina and Rita had similar complaints as did victims of the string of disasters in Haiti all claiming that the Red Cross not only misappropriated funds but was also corrupt and failed to adequately respond in times of emergencies. In the New Orleans region, for instance, residents reported frenziedly attempting to call the Red Cross outlets and receiving no response. Another small, predominately Native American community of Dulac reported that they only received supplies form the Red Cross a month after Hurricane Rita had overwhelmed them.

In the meantime, other accusations involved unnecessary spending of the Red Cross on items such as expensive hotel rooms, excessive travel costs and unnecessary food. Other criticisms have swirled around the Red Cross spending more than a million dollars on celebrity endorsements and promotion whilst cutting their staff.

According to Komp (2007)

Charity Navigator, a watchdog group that provides information on charities to potential donors, [reported that] the organization spent more than $170 million on administrative costs and about $111 million on fundraising expenses in 2004. Interim CEO Jack McGuire makes a salary of $416,010. The organization spent about $2.8 billion on programs. (http://newstandardnews.net/content/index.cfm/items/2873)