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by nodata 4032 days ago
> the Red Cross provides almost zero information about how it spends its money.

If that is true, how can Charity Navigator rate it 80.5/100?

http://www.charitynavigator.org/index.cfm?bay=search.summary...

4 comments

Have a look at RC's "Annual Report" from 2014 ... http://www.redcross.org/images/MEDIA_CustomProductCatalog/m4...

This is a fluff piece full of pictures and words. No numbers or financial statements. On page 26 there are a couple pie charts that vaguely outline some general categories of outflows and inflows. No details. If a NYSE company (or even a private company) tried to put out an Annual Report with this kind of glossed-over detail, they...well, they couldn't get away with that.

Guidestar.org is not quite as nice, rating it 3 out of 5 stars: http://www.guidestar.org/organizations/53-0196605/american-n...

People who run these 'not-for-profit' 501(C)(3) institutions are ironically not held quite as "accountable" as people running normal businesses who have to report to shareholders. In the N4P world, where the "shareholders" are reduced to the general public or generic taxpayers or even to the disaster victims themselves -- it's a lot more difficult to get them to own up accountable to the people they serve.

Most of the time the donors are just happy to get their tax write-off and they leave it there.

They do publish their financial statements and tax returns, see here:

http://www.redcross.org/about-us/publications

This seems to be a common pattern with non profits, to separately issue their financials and annual reports. I'm not sure why.

The report is advertising. They don't want donors to see the financials.
>This is a fluff piece full of pictures and words

That's because it's for benefactors, and not the publicly-available IRS-990 form that details what you're looking for.

If you want major financials, you can see them here: http://990s.foundationcenter.org/990_pdf_archive/530/5301966...

It also gives salaries of the execs too (president makes $550k/yr)

The article basically implies they use exceedingly broad categories, and don't exactly characterize everything the way they should. See also this Propublical article:

https://www.propublica.org/article/how-the-red-cross-raised-...

There's a chart half way through that shows, by NPR and Propublica's estimates that instead of 90% spent on actual charity, they only spend 60%. This would tank their rankings in places like Charity Navigator and Givewell.

So the short answer to your question, is that they are vague as hell about how they spend the money, and they probably cook the books.

Looks like they're on a CN watchlist, as a result of this reporting.

http://www.charitynavigator.org/index.cfm?bay=search.news&or...

I don't know, perhaps they're particularly opaque about Haiti or other "big" disaster relief efforts, or perhaps other charities are just as bad.

I'm just summarizing what I took from the article, in particular skip ahead to around 4m50s. The audio is much clearer than the transcript on this issue.