Red Cross Exec Doesn't Know What Portion Of Donations Go To Harvey Relief

Aug 30, 2017
Originally published on September 1, 2017 10:55 am

Editor's note on Sept. 1: Some listeners and readers have asked why NPR pressed Red Cross operations and logistics executive Brad Kieserman about how much of the money his organization receives will actually be spent on helping those affected by Hurricane Harvey. NPR's questions were follow-ups to several years of reporting by NPR and ProPublica about shortcomings in the organization's disaster relief operations and misleading claims about its finances. NPR has asked several times in recent years to speak with Red Cross President and CEO Gail J. McGovern. Those requests have been turned down. Prior to this latest interview, NPR asked again. The organization said McGovern was unavailable, but did make Kieserman available.


As Americans are opening their wallets and donating to relief efforts in the aftermath of Hurricane Harvey, one of the most prominent charities is the American Red Cross.

But donors might be surprised to learn the Red Cross doesn't make clear what percentage of their dollars will go directly to helping the victims of the storm.

Dating back to 2014, NPR and Pro Publica have reported that the Red Cross misstated how donor dollars are spent.

A study released by Sen. Charles Grassley, R-Iowa, concluded that the Red Cross had spent $124 million — one-quarter of the money donors gave for earthquake relief in Haiti in 2010 — on internal expenses.

In an interview with Morning Edition host Ailsa Chang, Red Cross executive Brad Kieserman was asked about reports that the charity has unusually high administrative costs.

"We are committed, I am committed, my team is committed to using our resources and donor dollars in a way that best helps the people of Texas," said Kieserman, vice president of disaster operations and logistics.

Kieserman said that as of Wednesday morning the Red Cross had spent $50 million on Harvey relief, mainly on 232 shelters for 66,000 people.

Chang: Through donations, how much of every dollar goes to relief?

Kieserman: Yeah, I don't think I know the answer to that any better than the chief fundraiser knows how many, how much it costs to put a volunteer downrange for a week and how many emergency response vehicles I have on the road today. So I think if he was on this interview and you were asking how many relief vehicles in Texas, I don't think he'd know the answer and I don't know the answer to the financial question I'm afraid.

Ailsa pressed on. She said that NPR had reported that 25 percent of the money donated for Haiti to the American Red Cross after the 2010 earthquake went to internal spending.

Chang: Is that still happening? Such a substantial percentage of donations going to internal administrative costs, rather than to relief?

Kieserman: It's not something I would have any visibility on. I can talk about what it costs to deliver certain relief services.

Chang: Yeah.

Kieserman: But the way the internal revenue stream works, uhh ...

Chang: You don't know what portion of that amount.

Kierserman: Not really.

Chang: You don't know what portion of that total amount is for relief.

Kieserman: No, I really don't. I wish I could answer your question, but it's not something I have visibility on in the role that I play in this organization.

She asked him if he has "visibility" on any efforts by the Red Cross to reduce the amount of money spent solely on internal costs.

"The folks I work for are very, very attentive to cost effectiveness and cost efficiencies in making sure that as much as every dollar that we spend on an operation is client-facing," said Kieserman.

Their conversation can be heard on Thursday's Morning Edition.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

AILSA CHANG, HOST:

And people across the country - they do want to help. So they're opening up their wallets. The American Red Cross is one of the best known aid groups. But that organization has come under a lot of scrutiny after investigations by NPR and ProPublica and by Congress. Huge administrative costs and a failure to deliver in recent natural disasters were among the problems reported.

We reached Red Cross executive Brad Kieserman on Skype to talk about all this. He's vice president of disaster operations and logistics. Kieserman says his organization has so far spent $50 million on Harvey relief.

BRAD KIESERMAN: We've got enough shelter supplies today in theater for over 66,000 people. I put more shelter supplies down range.

CHANG: How many shelters is that for 60,000 people?

KIESERMAN: So on Tuesday evening going into Wednesday morning, we had 232 shelters throughout the state.

CHANG: So in the past, during Hurricane Isaac in 2012, the Red Cross had some issues getting supplies to the disaster. You had trucks driving around empty purely for PR purposes. Is that happening now?

KIESERMAN: Not on my watch, Ailsa. That's not going to happen. And if it does, I'm going to deal with that. We are a relief organization. For many, many people, the Red Cross is an iconic organization. And I think it's important that they see the hope that it brings. But there's a difference between people seeing hope and actually using resources in a way that helps them.

CHANG: Exactly.

KIESERMAN: And we are committed, I am committed, my team is committed to using our resources and donor dollars in a way that best helps the people of Texas.

CHANG: What is the Red Cross doing differently this time around to make sure that we don't see Red Cross truck drivers driving around empty trucks? How better are you monitoring these drivers? Or how better are you recalibrating your PR campaign so that resources aren't deployed for PR and are actually being deployed to deliver relief?

KIESERMAN: So, one, in terms of our ability to monitor our emergency response vehicle, all of those vehicles are now geocoded. So I'm actually sitting in my operations center here in Fairfax, Va., and I can look and tell you where every ERV is, where every emergency response vehicle has been. I can tell you how fast it's going and where it's going next.

CHANG: So you can monitor 300 vehicles simultaneously going around these flood areas and all of the supplies in them?

KIESERMAN: I can't tell you where every meal has gone. I can tell you where every load of meals has gone. And I can tell you where the truck loads were delivered when they came in by tractor trailer. And then I can tell you how they were distributed through either emergency response vehicles or fixed sites. So I think we have a much better audit trail to show and that, of course, allows us to make sure we're better stewards of those resources.

CHANG: But I just want to be very clear. I mean, you are acknowledging that during Hurricane Isaac there were empty trucks being driven around for PR purposes.

KIESERMAN: I wasn't here during Hurricane Isaac. I'm trying to remember...

CHANG: But do you have knowledge of what happened before you arrived?

KIESERMAN: I do. I have knowledge about what happened before I arrived. And so I would say this. I've read the reports. And I'll tell you why. If you do not learn from and acknowledge your mistakes, then you are never going to get better. All I know is it was reported. The fact that somebody thinks it happened - the fact that it, in fact, may indeed have happened - that is a good enough reason for me as a leader and for my team to make improvements in the system and to pay attention to those issues.

CHANG: I want to talk about donations now. The Red Cross has stated in the past that more than 90 cents on every dollar that it receives through donations goes towards relief. But our reporting and an investigation by Congress show that a quarter of the donations for Haiti, for example, went to internal spending on management and oversight. And last year, Republican Senator Chuck Grassley of Iowa stated that he had substantial concerns about the Red Cross. So now how much of every dollar that the Red Cross raises - how much of that is going directly to relief? Can you answer that question?

KIESERMAN: On the average, 91 cents of every dollar that we spend is invested...

CHANG: That you spend?

KIESERMAN: That we spend.

CHANG: So I'm asking a different question. How much of every dollar that you receive through donations - that through donations - how much of every dollar donated goes to relief?

KIESERMAN: Yeah. I don't think I know the answer to that any better than the chief fundraiser knows how many emergency response vehicles I have on the road today. So I think if he was on this interview and you were asking him how many relief vehicles were in Texas, I don't think he'd know the answer. And I don't know. I don't know the answer to the financial question, I'm afraid.

CHANG: I want to return to Haiti. Our reporting showed that 25 percent of the money donated for Haiti to the American Red Cross went to internal spending. Is that still happening - such a substantial proportion of donations going to internal administrative costs rather than to relief?

KIESERMAN: It's not something I would have any visibility on. I can talk about what it cost to deliver certain relief services.

CHANG: Yeah.

KIESERMAN: But the way in which the internal revenue stream works...

CHANG: You don't know what proportion of that amount...

KIESERMAN: No. I really don't.

CHANG: You don't know what proportion of the total amount is that relief?

KIESERMAN: No, I really don't. I wish I could answer your question. But it's not something that I have visibility on in the role that I play in this organization.

CHANG: Well, do you have visibility on any efforts the organization is making to reduce the amount of money being spent solely on internal costs?

KIESERMAN: That I have visibility on because I can tell you that the folks that I work for are very, very attentive to cost effectiveness and cost efficiencies in making sure that as much of every dollar that we spend on an operation is client-facing. You know, we call the people we serve clients.

CHANG: So given the well-documented problems with the Red Cross, tell me what has changed?

KIESERMAN: One of the first things we did when it became clear that that we had issues to address was to do a root-cause analysis and to say, so why are these things happening? Why is it being reported that trucks are driving around as a public affairs marketing board as opposed to actually providing assistance? And what you learn is that as long as your folks who are delivering assistance understand why, then you can prevent those kind of potentially well-intentioned actions from happening.

CHANG: All right. Brad Kieserman is vice president of disaster operations and logistics for the American Red Cross. Thank you for joining us.

KIESERMAN: Thank you, Ailsa. And thanks to everybody working downrange. Transcript provided by NPR, Copyright NPR.