Vol. 12, No. 2,856W - The American Reporter - March 18, 2006


STICKY FINGERS: THE BETRAYAL OF AMERICAN TRU.S.T
by Richard LeCuyer and Cindy Hasz
American Reporter Correspondents
San Diego, Calif.

SAN DIEGO -- Charities and nonprofits are not sacrosanct; they are no less suspect than any other institutions, and must be scrutinized and judged accordingly. In the wake of Sept. 11th, millions of Americans unselfishly donated over $1.5 billion to aid the families of the victims. Most of these funds were funneled through the American Red Cross and the United Way. But little enough of the money has found its way to the victims, and Americans have found their compassion short-circuited, their healing impulses pirated by these two disingenuous institutions.

Today, seven months later, only sixteen cents on the dollar has been received by the people for whom it was intended. This is unacceptable either as policy or performance.

In a recent article journalists Mark Faziollah and Peter Nicholas report that the Red Cross has distributed only 18% of the $996 million it collected, while the United Way has done even worse, giving our a mere 14% of the $470 million in donations, with no plans to distribute more. By comparison, families of police officers and firefighters who died on Sept. 11th have received $500,000 each from other sources. Victim's families have complained bitterly about the miserly distribution and about the cavalier treatment they received at the hands of agencies who treat them like welfare mothers, requiring them to produce rent and grocery receipts prior to remuneration. This meager effort is pathetic at best and maybe even criminal. Interest on the undistributed funds comes to over $100,000 per day, over $15 million since Sept. 11th. That's one hell of a windfall.

Nor are the misdeeds of these organizations confined to the national level. In San Diego, for example, the local Red Cross chapter has been embroiled in controversy for months over their failure to disperse $400,000 collected for relief of the victims of last year's Alpine fire. Community leaders and the local media are calling for the resignation of their CEO (who coincidentally draws a salary in excess of $300,000 a year) while San Diego County officials are investigating allegations that they committed fraud while administering transportation contracts for the disabled, for which they received over forty million dollars over the period of two decades. While the amount is trivial compared with the Sept 11th fund, it is another page in a book of betrayal, bungling and bad faith. Such duplicity is anathema to the spirit of generosity displayed by Americans who gave so selflessly only to have their compassion co-opted by tactics worthy of Enron.

To abuse our good will so callously is the epitome of contempt. Americans are generous with their judgment as well as their pocketbooks, but we should leaven our naivete with a dose of cynicism and reassess our nonprofit institutions. We are naive indeed if we believe our charitable organizations, from MADD to medical research, are motivated solely by altruism. These groups are designated 501c-3 by the IRS tax code; that does not mean they are prohibited from making a profit, but merely that they are exempt from paying taxes on it. Some nonprofit CEO's make more than President Bush, while in others "administrative costs" eat up much of their funding. This does not sit well with the American Institute of Philanthropy, the nation's leading charity watchdog org. The AIP monitors the nation's charities with a critical eye, discloses relevant information on their Website, and has criticized groups associated with 9/11 fund-raising for withholding funds. The issue is not only one of efficacy, but accountability. We advocate Americans withhold donations from the Red Cross and the United Way until the following conditions are met:

  • Distribute all remaining donations to survivors of 9/11 and the families of the victims without further delay.
  • Distribute funds equally and in one lump sum.
  • Include accrued interest on the funds being held as part of the restitution.

Charities are big business, and should be subject to the same tough standards. Government scrutiny and AIP oversight is helpful but insufficient. It's time for direct action: a nationwide boycott.

Until every dollar donated is given to the victims and their families, the credibility of these institutions has evaporated, and so likewise should their contributions.

Richard LeCuyer is a consumer advocate and writer living in San Diego. Cindy Hasz is a nurse/patient advocate and writer also based in San Diego.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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