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News of interest to ARCRA members

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  • 07/07/2016 6:07 PM | Anonymous member (Administrator)

    By Al Rettig, ARCRA Board           

              A new report from Senator Chuck Grassley (R-IA) has rekindled questions about American Red Cross relief efforts in the wake of the devastating earthquake that struck Haiti in the early days of 2010. Grassley, Chairman of the Senate Judiciary Committee and a longtime critic of the Red Cross, issued the report on June 15. The document runs 19 pages with an additional 290 pages of attachments. In it, Grassley criticizes the Red Cross on a number of fronts. He says:

    • That the Haiti Assistance Project (HAP) was seen internally as a fundraising opportunity more than a relief effort.
    • That the project was plagued initially with understaffing, poor training and poor morale, leading to overall inadequate performance.
    • That the ARC uses a "complex, yet inaccurate, process to track its spending."
    • That the Red Cross attempted to terminate an audit by the General Accounting Office (GAO), and managed to successfully limit the scope of that audit.
    • That the ARC retained $69.6 million in "program service expenses" but is unable to inform Congress how much oversight and evaluation is included in that amount. Grassley contends that Red Cross "overhead" is far greater than the organization has claimed.
    • That the ARC Investigations, Compliance and Ethics office (ICE) is woefully understaffed and misplaced within the organizational structure, which Grassley says compromises its effectiveness and independence. He says that the Red Cross "is reluctant to support the very unit that is designed to police wrongdoing." He further contends that a new reporting structure for ICE does not result in the necessary adjustments to this critical function.

                In a June 16 press release the Red Cross took strong exception to many of Grassley's contentions. The ARC noted:

    • That the Red Cross has "accounted for every penny" spent on HAP and posted that information on its website.
    • That the Red Cross enjoys the highest rating for accountability and transparency from Charity Navigator and that it has met all Better Business Bureau Wise Giving standards.
    • That what Grassley contends are overhead dollars are legitimate program expenses.
    • That Grassley's report does not note a single finding of fraud or abuse in HAP, that the organization's books are audited appropriately, and that the original proposed scope of the GAO audit went beyond what they are entitled to do.
    • That the reason the ICE office personnel have been severely cut is because there are far fewer whistleblower complaints than there were during Hurricane Katrina.

                On June 17 the New York Times ran an editorial entitled "Trust Deficit at the Red Cross," summarizing Grassley's report and the contention that "Senate investigators found that the Red Cross spent about 25 percent of the $488 million raised for Haiti relief on administrative costs and fund-raising." The times called this figure "unusually high," far exceeding the 9 percent that is the Red Cross norm. The editorial also pointed to Grassley's contention that the ethics office has had a staff reduction from 65 to three people over the last decade. However, the Times also noted that "early this month, [the ARC] took a step in the right direction by releasing a breakdown of the money it had spent on Haiti relief."

                Then on June 21 The New York Times ran a rebuttal letter from Red Cross president and chief executive Gail McGovern. In it she reiterated that there have been no findings of fraud or abuse, that Grassley's contention that 25 percent of donated funds went to overhead is categorically incorrect, and that the correct figure is 9 percent.

                On July 6 Senator Grassley introduced a bill in Congress called "The American Red Cross Transparency Act," which if enacted would give the Government Accounting Office full access to Red Cross books and personnel, and would make the Investigations, Compliance and Ethics office directly accountable to the Board of Governors. The Red Cross responded by saying it "will review the proposed legislation and make our views known to Congress at the appropriate time."

                Those who have followed the American Red Cross response to the Haitian earthquake know that early relief efforts were plagued by "fits and starts." Red Cross communications vice president Brian McArthur points out that many of the early pictures of the devastation came from Red Cross sources, which helped trigger a massive--and to a significant degree spontaneous--financial response from the American people. This, along with the natural instinct to help, led to the intensive and very visible Red Cross relief effort.

                It is also true that the Haiti response came in the wake of Red Cross staff reductions which jettisoned some experienced disaster personnel. This resulted in considerable, time-consuming on-the-job training for new staff as relief activities ramped up. McArthur notes that efforts were further hampered by byzantine laws and regulations pertaining to land use, leading to delays in construction and other relief activities.

                While the Haiti relief effort certainly had its share of very public missteps, the Red Cross response to Senator Grassley's recent screed seems compelling. Disagreements about what is and is not "overhead" are as old as nonprofit accounting, and are not likely to end with this disaster. The Red Cross has finally released a line item spending report which, along with the fact that there is no evidence of fraud or abuse, forms the crux of a persuasive rebuttal.

                If the Red Cross builds on its accomplishments in Haiti and--importantly--learns from its mistakes, it will be better prepared next time around.  

  • 06/22/2016 11:05 PM | Anonymous member (Administrator)

            The grace period for 2015 Annual Members to renew for 2016 will end on July 31 … so act now to renew! You’ll continue to receive eNewsletters and many other benefits and, most importantly, help to make sure that the voice of Red Cross retirees continues to be heard loud and clear.

            ARCRA annual memberships need to be renewed for each calendar year; if you need to check your status login to the website.  Want to be done with annual renewals? Think about becoming a Lifetime Member; you’ll be making the Association stronger and have one less thing to remember!

    Renew today by clicking on Join/Renew.

  • 06/22/2016 11:00 PM | Anonymous member (Administrator)
             ARCRA is seeking candidates for the 2017 Board of Directors.  Names and brief bios of those you think would make good board members should be emailed or sent to the ARCRA office. ARCRA@redcross.org

            Maurice Levite, past ARCRA President is chair of the Nominations Committee.


  • 06/10/2016 2:21 PM | Anonymous member (Administrator)

    by Dave Therkelsen, ARCRA President

            A good friend from my working years in American Red Cross got in touch with me just a couple of days ago. Herself long retired, my friend doesn’t know what to say or do when she hears criticism of ARC. Since, as ARCRA president, I sometimes have access to more information, my friend hoped I would have some advice for her.

            I hope so too, but my former colleague’s inquiry caused me to reflect on the nature of advocacy as part of the Retiree Association mission. Since the ARCRA officers and board of directors are the direct link between retired Red Crossers and the current top leadership of ARC. It occurs to me that advocacy – and sorry about the cliché – is a two-way street.

            It is our role to advocate for our members on matters such as health care and pension benefits, and we do so diligently. It’s also our role to advocate, when appropriate, to our members, on behalf of American Red Cross.

            We are independent of ARC, and it’s not our job to mindlessly advance the “party line,” uncritically. But today’s Red Cross, different though it may be from the Red Cross most of us worked in, still does a whole lot of good for our communities and our society. Letting our members know about the good works of ARC, so they can be better informed in their own interactions with friends, family and community, is an important part of our work. Interpreting ARC’s actions when the organization is under critical scrutiny is also part of advocacy.

            At its most recent board meeting ARCRA decided to step up its advocacy work by creating an Advocacy and Education Committee, that will give focused attention to our communication, in multiple directions, about any and all matters that affect the retirement well-being of our members.

            For this and other committees, we’re trying to look beyond our board members and to our membership as a whole for people interested in the work and willing to serve. So let me know, or let the office know, if you’d like to join in our advocacy work.

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