Chuck Grassley

United States Senator from Iowa





Q&A: American Red Cross

Sep 08, 2017

With U.S. Senator Chuck Grassley

Q: Why do you keep close tabs on the American Red Cross?

A: As the nation’s largest nonprofit humanitarian organization, the Red Cross must succeed. The American Red Cross was chartered by Congress more than a century ago to provide emergency services and relief in times of war and peace. For decades, tens of thousands of volunteers have helped to carry out its noble mission, providing resources to military families, relief services to victims of natural disasters, operating blood banks, and working to save lives and ease human suffering. Countless American citizens have opened their wallets to support the good work of the Red Cross and its mission: “to provide relief to victims of disasters and help people prevent, prepare and respond to emergencies.”  A unique instrumentality of the federal government, the Red Cross receives tax dollars, tax-advantaged donations and other benefits to carry out its mission and serve the public benefit. That’s why my oversight work matters. The American Red Cross must effectively manage its resources to succeed in its mission and uphold the public trust. Good stewardship is essential to maintain the generous financial support necessary to carry out good works. As a watchdog for good government, I work relentlessly to strengthen accountability and transparency among the non-profit sector. A decade ago, I led bipartisan reforms through Congress to improve governance at the Red Cross. They were designed to put teeth into oversight measures to help detect and deter fraud, build accountability and secure compliance with better transparency. However, when I started digging into questions raised by media outlets about the Red Cross’ earthquake relief efforts in Haiti, it was at times challenging to get answers. Donors deserve reassurance that their hard-earned money is being stretched to the last penny to provide humanitarian assistance to the most people possible. From temporary shelters to home repair, food and water, and basic hygiene and medical essentials, donors give generously to help people get back up on their feet following catastrophes.

Holding non-profits, like the Red Cross, accountable is non-negotiable for three very important reasons. First: To get the most bang from every buck to help as many people as possible. Second, to reassure donors that every dollar and every ounce of donated blood makes a difference for those stricken by devastation. Finally, to boost the morale and outreach of the legions of volunteers on the ground who drop everything to deploy and help victims in ravaged communities devastated by disasters. The human suffering and financial devastation racking up from Hurricanes Harvey and Irma underscore why it’s vital to keep life lines like the Red Cross functioning as effectively and efficiently as possible.

Q: Are you concerned the Red Cross has lost credibility with the public?

A: Let me repeat how imperative it is for Americans that charitable humanitarian organizations -- like the American Red Cross -- and their invaluable network of donors, staff and volunteers, succeed in their mission. That is why I work relentlessly to make sure good governance succeeds at the Red Cross. As one of the most prominent humanitarian relief organizations in the United States, the American Red Cross needs to be as successful managing its resources and delivering relief services as it is raising billions of dollars in donations. America’s Gulf Coast is buckling down to rebuild from historic damage this hurricane season. Federal, state and local governments, first response teams and charitable organizations must work together to succeed in this massive, years-long relief and recovery effort. Not only will this colossal undertaking require sustained, coordinated efforts, it also will depend upon the contributions of a generous citizenry to succeed. The American Red Cross made serious fiscal missteps implementing relief efforts in Haiti. It collected nearly $500 million in donations; however, my oversight work found that a quarter of the funds raised went toward administrative costs and overhead.   The Red Cross also did not know how much each project cost in Haiti and attempted to terminate a Government Accountability Office review of its operations.  To help the Red Cross regain its footing and achieve transparency, I introduced the American Red Cross Transparency Act earlier this year to ensure federal auditors have timely access to its financial records. Tax-exempt organizations, like the American Red Cross, are not only obligated by law to uphold their end of the bargain; the American public also depends upon them to do so.   That’s even more important when the organization is an instrumentality of the federal government. 

Iowans who are able to donate to humanitarian relief efforts are encouraged to do so. The Department of Justice advises donors to be wary of scams and exercise due diligence before contributing. Report suspected fraud to the National Center for Disaster Fraud at (866)720-5721. The 24-hour hotline is staffed seven days a week.