June 05, 2020

Disaster-swamped American Red Cross in need of financial rescue

WASHINGTON — Swamped by large and small natural disasters, the American Red Cross declared Tuesday that it is mired in “serious financial trouble,” and pleaded for $30 million in contributions to continue relief programs for the victims of floods, mudslides, hurricanes, earthquakes and fires.

Red Cross President Elizabeth Dole said that the financial shortfall the agency faces threatens its 110-year-old disaster relief program, which gives food, shelter, medicine and other aid to disaster victims.

Dole asked for $30 million from the public and private sectors, citing the more than 55,000 disasters in which the agency has assisted during fiscal 1990-91, which ends June 30.

During the current fiscal year, she said, the Red Cross has spent nearly $47 million in national funds on disaster relief, nearly twice what was budgeted. Local chapters have spent millions of their own money as well.

Dole said that the national headquarters of the Red Cross already has implemented a financial belt-tightening to free more funds for disaster victims. She said that the national headquarters has tapped $20 million from corporate reserves, leaving less than “$10 million in reserve.”

The Red Cross laid off 204 national workers three weeks ago. A hiring freeze was imposed last October, travel budgets were cut by 40 percent, and a suspension was placed on “major purchases.”

In 1989-1990, Dole said, the Red Cross spent a record $224 million to help victims of disasters such as Hurricane Hugo, which raked the East Coast, and the earthquake that rocked San Francisco. The 1990-1991 figure for disaster relief was $184 million.

Among the more recent disasters cited by Dole were Cyclone Val, which devastated American Samoa, last week’s earthquakes in California, rain-fed floods that put parts of Texas underwater for weeks, and the mudslides in Puerto Rico that alone swallowed $6 million of Red Cross relief funds.

“Tens of thousands of Americans will be struck by disasters this year,” Dole said. “They will turn to us for help.”

Although chartered by Congress, Dole said that the agency relies on donations from corporations and citizens.

“We are an extension of the goodwill of the American people,” she said.

The fund-raising drive is the 12th emergency appeal in the agency’s history. It will feature television and newspaper commercials, and a national toll-free number of 1-800-842-2200 for contributors.

Local Red Cross chapters also are strapped for funds, an agency representative said, and those units will conduct their own fund-raising programs.

According to Maine Red Cross officials, the agency helped 348 victims of 87 disasters last year in the state’s northern counties. Disaster assistance to northern Maine victims totaled $672,340, all but $40,294 of which came from the national organization.

The Pine Tree Chapter, the largest of the three Red Cross units serving northern Maine, has gone into debt after helping victims dislocated by last spring’s Allagash River flood. The chapter provided assistance to 68 families left homeless by residential fires and helped 15 other families displaced by an apartment fire in Caribou.

Several disaster victims assisted by Red Cross attended Tuesday’s news conference and described the help they received from the agency.

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