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(ProPublica)   How does the American Red Cross avoid public outrage over the misappropriation of $300 million in relief money for Hurricane Sandy? By claiming their expenses are a trade secret. Next question   (propublica.org) divider line 66
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4599 clicks; posted to Main » on 26 Jun 2014 at 7:38 PM (3 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-06-26 05:49:27 PM
Ah, Gibson Dunn, always there when someone's at their worst.
 
2014-06-26 06:55:21 PM
The Red Cross is on my shiat list anyway, but since they are funded by gifted money, how is anything they do not eligible to be disclosed by FOIA?
 
2014-06-26 07:34:49 PM
"We have to protect our non-profit margin. We make billions in donations/grants/service revenue and we want to keep showing only a few percent for administrative and fundraising costs compared to the competition while still paying out over 300 million to... (wait for it...) our administrators and fundraisers."

"Can't tell you. Trade secret."
 
2014-06-26 07:40:48 PM
So, their expenses are "fungible"?
 
2014-06-26 07:40:49 PM
So what are the criteria to separate " a fancy law firm" from just "a law firm"

Is there a scale of fanciness, or is there some fancy threshold?
 
2014-06-26 07:42:23 PM

ElLoco: "We have to protect our non-profit margin. We make billions in donations/grants/service revenue and we want to keep showing only a few percent for administrative and fundraising costs compared to the competition while still paying out over 300 million to... (wait for it...) our administrators and fundraisers."

"Can't tell you. Trade secret."


So, wait.  What you are saying is that if you follow any special interest group/charity/religious entity's money trail far enough, it eventually ends up in the pockets of a select few at the top of the chain?  B-b-b-b-ut they said they were charitable and nice and magnanimous.  It's against the honor code to say one thing and do another.  It's morally illegal.  Why aren't they in moral jail?!
 
2014-06-26 07:42:41 PM
I don't see any evidence of "misappropriation" except that they don't want to hand over their records. That's perhaps questionable, but doesn't mean they didn't spend the money on Hurricane Sandy relief, just that it's none of your business, subby.
 
2014-06-26 07:43:00 PM
FTA: 'The letter doesn't specify who the Red Cross' "competitors" are. '

That was my first question.

/down with the the American Cancer Society!
 
2014-06-26 07:44:03 PM

granolasteak: The Red Cross is on my shiat list anyway, but since they are funded by gifted money, how is anything they do not eligible to be disclosed by FOIA?


They've been on my shiat list for years.  I tried to take a CPR course there, they cancelled it, didn't tell me (so therefore I showed up, having taken time off from work to attend), and then refused to give me a refund until six months of weekly calls got me a "shut him up!" refund.
 
2014-06-26 07:47:16 PM
They took money for 9/11 and used it to buy a new phone system.
 
2014-06-26 07:50:25 PM
They pay their managers outrageous salaries
 
2014-06-26 07:50:46 PM
If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.
 
2014-06-26 07:51:33 PM
Except they are a 501c3, so no, they aren't
 
2014-06-26 07:53:23 PM

lindseyp: So what are the criteria to separate " a fancy law firm" from just "a law firm"

Is there a scale of fanciness, or is there some fancy threshold?


depends on the pants
 
2014-06-26 07:54:29 PM
They pulled a similar stunt after 9/11.

Richard Holden -Huffington Post  September 21, 2005

http://www.huffingtonpost.com/richard-walden/the-red-cross-coming-ho me _b_7653.html


FTA:No one seems to read Red Cross ads with any real subtlety: they do not rescue or medicate people; they do shelter them, feed them and help them relocate via motel/hotel vouchers...all of which is reimbursed via pre-existing contracts as long as there is a state or federal disaster declaration.
 
2014-06-26 07:55:34 PM

Gyrfalcon: I don't see any evidence of "misappropriation" except that they don't want to hand over their records. That's perhaps questionable, but doesn't mean they didn't spend the money on Hurricane Sandy relief, just that it's none of your business, subby.


When your basing the acceptance of those donations for a fund specifically earmarked to assist those victims, then I would think it's fairly important to have a level of transparency, so you maintain the trust with your donors.  The problem is more often than not - when there is an exceptional disaster, like Katrina or Sandy or the earthquakes - most of the money accepted ends up going into a General Fund and distributed to other programs within the organization that may not even have anything to do with disaster relief.

This is probably what the trade secrets they're talking about - which isn't really a secret, because if you donate on-line in the fine print it already says that.
 
2014-06-26 07:55:44 PM
Richard Walden...not Holden
 
2014-06-26 07:56:03 PM

fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.


I'm still trying to wrap my brain around the idea of a charity with competitors.
 
2014-06-26 07:57:18 PM

fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.


This whole "basic information can be classified as proprietary" really grinds my gears. Whether it's this, patenting genomic sequences, or simply ESPN refusing to make their QBR formula public, I'm generally not keen on information being kept secret - unless it's for clear public safety reasons.
 
2014-06-26 08:02:21 PM

The hopeless imp: fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.

I'm still trying to wrap my brain around the idea of a charity with competitors.


There's a finite money people give to charity. Charities very much compete against each other trying to prove they are most worthy for your money.
 
2014-06-26 08:02:24 PM
Trade secret? What are you, a business or a charity?
 
2014-06-26 08:05:14 PM
Maybe a law talking person can explain this to me, but how can they claim protection of trade secret when they are a non-profit charity?   Are they afraid UNICEF is going to cut into their market share?
 
2014-06-26 08:05:47 PM
They need to disclose two pieces of information - The amount collected in donations for Sandy disaster relief, and the amount directly expended on individuals that was not reimbursed by any party.  The remainder is their administrative cost.  Since they are so reluctant to disclose these basic numbers, when the NY Attorney General finally compels them to disclose them, there will be blood (and not what they take in for free and then sell).
 
2014-06-26 08:13:30 PM
encrypted-tbn3.gstatic.com
 
2014-06-26 08:14:19 PM

sharphead: Gyrfalcon: I don't see any evidence of "misappropriation" except that they don't want to hand over their records. That's perhaps questionable, but doesn't mean they didn't spend the money on Hurricane Sandy relief, just that it's none of your business, subby.

When your basing the acceptance of those donations for a fund specifically earmarked to assist those victims, then I would think it's fairly important to have a level of transparency, so you maintain the trust with your donors.  The problem is more often than not - when there is an exceptional disaster, like Katrina or Sandy or the earthquakes - most of the money accepted ends up going into a General Fund and distributed to other programs within the organization that may not even have anything to do with disaster relief.

This is probably what the trade secrets they're talking about - which isn't really a secret, because if you donate on-line in the fine print it already says that.


I figured that. Most people have trouble with the idea that the Red Cross doesn't ACTUALLY take their ten dollars and give it directly to some poor dope in a disaster zone; and they would probably have all kinds of fits to learn how it really works.

I can see that just from the comments right here on Fark.
 
2014-06-26 08:14:27 PM
Having been a board member of a nonprofit social-service agency for seven years, four as president, I can tell you there is definitely competition for donors -- especially in small communities (we provided a needed service in our county that no government agency did, or does. We relied on state grants and donations). Then again, our annual tax returns were public record. Is the Red Cross' returns public records ? Dunno.
 
2014-06-26 08:17:56 PM

thornhill: The hopeless imp: fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.

I'm still trying to wrap my brain around the idea of a charity with competitors.

There's a finite money people give to charity. Charities very much compete against each other trying to prove they are most worthy for your money.


What's your point? They might not get as much money? They are a charity, they don't earn it. They are clearly proving they aren't worthy of my money.
 
2014-06-26 08:22:37 PM
From this day forward, the American public is most likely to be giving less and less to that corrupt organization!  Hiring a law firm to attempt to avoid disclosing information we have a right to know looks very bad.

/just say "No" the next time the Red Cross wants money from you
//I sure will
 
2014-06-26 08:37:37 PM
Every time there is a big disaster people want to help, seeing as most people can't help directly they give to places like the Red Cross, who ends up getting way more money than they need for that particular disaster, so the remainder gets added to a general account and used for other day to day operations. This is how they stay afloat in times when there's nothing major in the news, which could be months or even years in between.

The reason they don't want to disclose the information is because people are to stupid to realize this. Your average Joe Public only understand that xxxxx amount of money was donated to provide relief for disaster Y but only xx of that money was spent on it. Suddenly Joe Public thinks the Red Cross is a fraud and stops donating money to them.
 
2014-06-26 08:40:19 PM
Occupy Sandy did far more actual hands on help in the aftermath of the disaster.  The Red Cross just vacuums up cash and does a few photo ops.
 
2014-06-26 08:42:59 PM
Easy way to keep this nonsense in check:

1. all non profits are required to post a full and accurate accounting of the organizations finances.  This would including naming all personnel who draw pay checks in excess of $40,000 a year.

2. An accurate list of all donors must be made available at all times.

3. Failure to provide either of the above shall result in suspension of non profit status, failure to correct this with in six months is ground to terminate non profit status and be levied for taxes for 12 months prior to the termination.

4. Knowingly providing fraudulent reports of accounting or donor records shall be grounds to have your organization seized bu the IRS. If investigation show the fraud was due to an honest error and not an attempt to hide the true records or commit fraud then the property shall be returned.
 
2014-06-26 08:46:01 PM
Do you want to help during a disaster? Do you have a cause you are particularly interested in? Animals? Children? Food? Medicine? By all means donate physical items to big charities to send for disaster relief, otherwise I feel quite strongly that your money will more likely be spent where you want it to if you donate to a local charity. Has their been a hideous fire in Australia and you are heartbroken by pictures of crispy koalas? Find a koala sanctuary in Australia and give them your money. It is much much easier to direct your resources if you spend locally.
 
2014-06-26 08:58:28 PM
krispy koalas ~ snert
 
2014-06-26 08:59:53 PM

thornhill: The hopeless imp: fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.

I'm still trying to wrap my brain around the idea of a charity with competitors.

There's a finite money people give to charity. Charities very much compete against each other trying to prove they are most worthy for your money.


Not disclosing where that money hoes is a good way to lose future donors.
 
2014-06-26 09:15:18 PM

jaybeezey: Not disclosing where that money hoes is a good way to lose future donors.


Guess how much money they'll spend of your donation to get a fresh new donor? Seriously.... that's how it works in non profit.  Ask them what the new acquisition cost per donor is - they'll know, and you don't want to...

Also, keep in mind, for a lot of these established non profit organizations, the bulks of their revenue is from wills and in-trust donations - take a look at their year end statements and you'll see.  Huge dollars people bequeath when they're dead - their families must be pissed!
 
2014-06-26 09:26:34 PM

lindseyp: So what are the criteria to separate " a fancy law firm" from just "a law firm"

Is there a scale of fanciness, or is there some fancy threshold?


Fancy law firms kiss you before they fark you in the arse?

/never been to a fancy law firm
 
2014-06-26 09:38:03 PM

Morgellons: lindseyp: So what are the criteria to separate " a fancy law firm" from just "a law firm"

Is there a scale of fanciness, or is there some fancy threshold?

Fancy law firms kiss you before they fark you in the arse?

/never been to a fancy law firm


The fancy firms have better commercials.
 
2014-06-26 09:55:35 PM

Lego_Addict: thornhill: The hopeless imp: fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.

I'm still trying to wrap my brain around the idea of a charity with competitors.

There's a finite money people give to charity. Charities very much compete against each other trying to prove they are most worthy for your money.

What's your point? They might not get as much money? They are a charity, they don't earn it. They are clearly proving they aren't worthy of my money.


The OP said he didn't understand how charities could be in competition with each other.

I pointed out that there's a finite amount of money that people donate; every charity believes that what they are doing is unique and can provide more public good than other peer charities (if you believe other people do better work, them you should close shop); so every charity is out there fighting to prove why they are more worthy than everyone else for your money.
 
2014-06-26 10:04:28 PM

jaybeezey: thornhill: The hopeless imp: fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.

I'm still trying to wrap my brain around the idea of a charity with competitors.

There's a finite money people give to charity. Charities very much compete against each other trying to prove they are most worthy for your money.

Not disclosing where that money hoes is a good way to lose future donors.


The issue is more nuanced than that. While we all agree every organization should be as transparent as possible, if they're forced to open up their books someone is going to cherry pick a few numbers and write a hit piece that causes major damage to the organization.

Does that mean charities shouldn't be required to release this info? No. But I can sympathize about why they don't want it out there.
 
2014-06-26 10:07:20 PM

sharphead: jaybeezey: Not disclosing where that money hoes is a good way to lose future donors.

Guess how much money they'll spend of your donation to get a fresh new donor? Seriously.... that's how it works in non profit.  Ask them what the new acquisition cost per donor is - they'll know, and you don't want to...

Also, keep in mind, for a lot of these established non profit organizations, the bulks of their revenue is from wills and in-trust donations - take a look at their year end statements and you'll see.  Huge dollars people bequeath when they're dead - their families must be pissed!


Acquisition may be expensive at first, bit at a well run nonprofit you should break even in less than 2 years.

And nonprofits get into major revenue problems when they cut acquisition spending.
 
2014-06-26 10:41:33 PM
Guess what: Large charities have large overhead. The most transparent and charitable organization I know of off the top of my head, Oxfam, manages to spend around 80% of their contributions to charitable causes. The other 20% goes to salaries, outreach, advertising, etc.

But: money you send to Oxfam doesn't go directly to whatever cause you sent it to Oxfam for, either. It goes into their fund, and is then sent out for grants, to buy supplies, to pay people doing the actual field work, and so on. Like every other large charity since forever. Why you think the Red Cross is any different, I can't imagine. When a big disaster comes along, and they roll out the ads exhorting people to contribute, it's not because all that extra money goes to Hurricane Sandy recipients. It's because a) during a disaster, there is likely to be a glut of people willing to contribute, and b) the general fund is going to be strained as more money has to be diverted to the instant disaster.

Hell, the money you send in in November probably can't even be processed until the following July. At which point, it will go to some other need. How is that so difficult to accept or understand? It's through NOT donating to the Red Cross or other large charities, that scam artists and fly-by-night charities rake in huge dollars and vanish into the darkness of the Grand Caymans and Swiss banks, as happened post-9/11. Are people excoriating the Red Cross okay with that, or is that where we should let the market decide?
 
2014-06-26 10:52:16 PM
I often wonder why there hasn't been a Wikileaks/Anonymous -style dump on the Red Cross. They've been shifty for decades, now. But no one cares.
 
2014-06-26 11:23:42 PM

lindseyp: So what are the criteria to separate " a fancy law firm" from just "a law firm"

Is there a scale of fanciness, or is there some fancy threshold?


At my firm, the partners all wear a top hat and a monocle.  That's how you know we're fancy at Peanut, Klink, Penguin and Pennybags.


\A top hat and a monocle would actually be an improvement on how our senior partner dresses.  Hasn't bought a new suit since the '80's.
 
2014-06-26 11:34:06 PM

Deep Contact: Morgellons: lindseyp: So what are the criteria to separate " a fancy law firm" from just "a law firm"

Is there a scale of fanciness, or is there some fancy threshold?

Fancy law firms kiss you before they fark you in the arse?

/never been to a fancy law firm

The fancy firms have better commercials.


http://www.youtube.com/watch?v=jr2gdPY-88w
 
2014-06-27 12:08:52 AM
Fark the American Red Cross and anyone that supports them.  I made the mistake of giving blood once, and I'll never do it again.  They hounded me endlessly with telemarketing calls asking me to donate more, more, more, even after I asked them repeatedly to stop calling.  I hope all of their overpaid executives get stabbed in an alley and bleed to death.
 
2014-06-27 12:26:11 AM

fusillade762: If those details were disclosed, "the American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," Levin wrote.

God forbid some other organization learn how to improve their disaster relief efforts.


Yeah.  Holy shiat.  Who turns saving people from famine and dysentery into a competition?
 
2014-06-27 01:27:18 AM
What the Red Cross doesn't want to tell you is that it collects money under the guise of whatever the disaster of the day is, then they basically use the money for "other stuff".

Just looking over their tax form, and they have an almost $1bn endowment - and around $560m of pension/retirement liabilities. Dang.

The US red cross spends lots of money outside the US, according to their schedule F. $375m in "investments", and only about $20m in "disaster response."

It looks like they spent at least $170m on individuals in the US, presumably for disaster response. They spent $105m on travel. WTF?

Of course, they spent $1.1 billion on red cross salaries during that period, and had revenue of $3.4bn.

What's strange is they don't list individuals on their schedule I, which seems like it should be a requirement.

Nobody reads these damn things. It'd be cheaper for states to do it themselves. The red cross is a f*cking waste of money - it's a cash and pension machine for non-profit drones. WTF?
 
2014-06-27 01:28:07 AM
2013 taxes, from the horse's mouth:

http://www.redcross.org/images/MEDIA_CustomProductCatalog/m28840148_ 20 13_American_Red_Cross_Tax_Return.pdf
 
2014-06-27 01:29:01 AM
 
2014-06-27 01:42:23 AM
http://www.redcross.org/support/donati ng-fundraising/where-your-money- goes/s andy-response

(Sorry for the spaces on mobile)

I was there, it definitely seemed like more than 90% were other red cross volunteers. We count everything, and it was a boon for businesses and tax revenues. Especially things like tolls ($26 or so for Staten island) that I'm not sure were reimbursed by the state but were definitely paid. Early in the recovery tolls were free. Parking fines and towing were also out of control.

Anyway, we try to be good stewards of the donated dollar so most volunteers do what's right but I'm sure not all of them.

I did about 5 weeks between NJ and NY.

I understand the hate because there's a lot of misinformation.
 
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