Voiceover: 9/11. Donations came pouring into the Red Cross Liberty Disaster fund. When the public learned the Red Cross planned to divert victim funds for other purposes, it was outraged, forcing a change of plans.
David McLaughlin: Regrettably, it took us some time longer than I think it should have to address that credibility gap.
V: Hurricane Katrina. The American Red Cross was blamed for poor coordination of relief efforts.
Paul Morton: The Red Cross is not coming through like they're supposed to.
V: At local Red Cross chapters, there have been cases of embezzlement. Two years ago the Red Cross had to turn to Congress for a $100 million infusion after its emergency fund was depleted.
Kathleen McCarthy: American philanthropy is built on trust, and if you undermine that trust, you don't just jeopardize the Red Cross, you jeopardize the whole infrastructure of philanthropy and charity in the United States.
V: So far the Red Cross has raised more than $203 million dollars for Haiti and spent or committed $67 million. $53 million for food and water, $12 million for shelter, and $2 million for health and family services. These figures include the costs of coordination, transportation, and distribution.
Allan Chernoff: So you can assure us right now, that every dollar raised for Haiti will go to Haiti?
Gail McGovern: 91 cents of every dollar that we raise- we have a bit of overhead, but 91 cents of every dollar that we raise for Haiti will go to Haiti.
AC: That 9 cents, that's for what?
GM: That's for general stuff, overhead, it pays the salaries, keeps the lights on, etcetera.
V: That efficiency measure does rank with other top relief groups. To get there the Red Cross has been cutting expenses. McGovern has imposed a salary freeze, and employees no longer get a 401k match from the Red Cross. No matter how efficient the operation, sending aid to Haiti is expensive, as we saw from some of the nonprofit's accounting.
In Gibraltar you purchased ten Toyota Land Cruisers at a cost of $415,000. Okay. So pretty pricey, they're 41,000 bucks each, huh?
Nan Buzard: Well, if you get an SUV, that's what they cost. I don't know if you've been to Haiti, but it's a very tough countryside, they gotta be loaded and you gotta have very heavy extra tires, so I actually think that's not so bad.
V: Expensive as the operation may be, the Red Cross says it's making sure the money goes exactly where it should, placing auditors on the ground in Haiti.
AC: There are desperate people there. Isn't there are great opportunity for fraud?
David Meltzer: Fraud is certainly at the top of our minds. It's not just the obligation I have to my donors; it's the obligation I have to the people of Haiti. I don't want our dollars of assistance ending up in sticky fingers, if you will. I want it to get to the people who need it.