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Wednesday, October 8, 2008

Congress Vows $100 Million to Red Cross After It Asks for Aid

The Washington Post reports that Congress will give the American Red Cross $100 million in emergency funding to replenish its disaster relief reserves, which were depleted as the charity plunged into debt to provide shelter, food and other services during a string of hurricanes this summer.  Philip Rucker writes,

American_red_cross_2In an unusual move, the Red Cross asked Congress for $150 million last month. The nonprofit organization, which operates largely on private donations, last turned to the federal government for help in responding to disasters in 2004, when it received $70 million in federal aid after four hurricanes hit Florida. Some critics say that by seeking federal assistance, it risks blurring its status as an independent charity.

Congress appropriated $100 million last week for the Red Cross, to be distributed through the Department of Homeland Security. Although Congress did not meet the full request for $150 million, Red Cross officials said they are relieved to receive any federal aid, considering both chambers have been grappling with upheaval in the financial markets.

Red Cross President Gail J. McGovern said she "crawled around on my hands and knees begging" on Capitol Hill for federal aid. She said senators and representatives thanked her in meetings for the Red Cross's response to the latest hurricanes.

"I really was stunned with how pleased Congress was with how we were performing, particularly in the post-Katrina world," McGovern said.

An unusually high number of U.S. disasters this year -- from spring tornadoes and California wildfires to Midwestern floods and Hurricanes Gustav and Ike -- has taxed charities, which have struggled in a sour economy.

The Red Cross has spent about $260 million this year responding to natural disasters, and took out loans totaling $200 million to cover costs, McGovern said.

"This has been an absolutely extraordinary year in terms of these big disasters and the challenges they bring," McGovern said.

The Red Cross launched a national campaign last month to recoup some of those costs. The campaign had raised $42 million as of yesterday, McGovern said. The charity needs about $60 million more to pay off its debt, and McGovern said she believes it will reach that goal.

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