Honoring Donor Intent

The American Red Cross has enjoyed a positive public image as a ready help whenever disaster occurs. Its image was tarnished a bit, however, in the wake of 9/11, when it became known that the charity had other plans for a large part of the hundreds of millions of dollars it accepted to aid the survivors and victims' families.

The Red Cross made no secret of a long-standing policy to use a portion of the money received for purposes other than the immediate disaster – for example, saving some for use in future disasters. In this instance, however, many donors easily assumed their dollars would go to people directly affected by the attacks. Many were justifiably incensed.

The ensuing outcry led to calls from Congress and state attorneys general for investigations into how the Red Cross uses the money it raises. Concern centers on whether the charity's appeals might be misleading.

To its credit, the Red Cross responded constructively. It pledged to use 9/11 money solely to aid survivors and families directly affected by that tragedy. So far, $570.4 million out of $967 million has been distributed.

Now it has announced it will alter the way it asks for donations. Wording will be changed to make it clearer that money may be used for a range of needs other than for a particular disaster. Red Cross officials also said they will be sure to confirm a donor's intent when sending out receipts for gifts. And it will announce when it has enough funds for a particular disaster.

The Red Cross may still have more owning up to do. Though it's specially chartered under federal law, the charity's financial records get only a cursory review from the government. Critics in Congress are determined to change that. The outcome of all this should be greater public trust in a nonprofit organization that does considerable good.