Wednesday, November 14, 2001

First, all donations to the Red Cross 9/11 Fund were to go to victims of the September 11 attacks. With donations higher than anybody could have imagined - far greater than donations for any previous disaster - the Red Cross announced they might hold back some of this money in a reserve in case of any further terrorist attacks.

I, apparently, am the only person on the planet who thought that was a good idea. Forget the bombing of Afghanistan, the firestorms started over the Red Cross announcement were as unprecidented as the original donations were. Okay, the Red Cross said a couple of days ago, if you don't like that you can request a refund of your donation. Now, they've retracted that statement, and again announced that all donations will go to 9/11 related victims.

And there was much rejoicing. At least until the next disaster, when people look to the Red Cross and can't figure out why they're broke. Frankly, most people have a highly unrealistic idea of what nonprofit organizations do and how they work.

Fox News' O'Reilly has been spouting off about incompetent nonprofits because they might actually want to take a portion of those donations to cover overhead. O'Reilly conveniently forgets that a big chunk of those donations came by credit card, and that the credit card companies are going to charge the Red Cross, United Way, etc., about 3 or 4% fees on each of those donations. Three or four percent of hundreds of millions of dollars adds up quickly. If that money can't come out of the 9/11 donations it's going to come out of other programs, pure and simple. The only other alternative is bankruptcy. Don't yell at the nonprofits, yell at the banks.

Another reality that most folks weren't aware of, but are now harping on nonprofits about, is that victims don't simply "get the money" - they must apply for the funds through a formal process. To the extent that this is the nonprofits idea, it is only to prevent fraud. The bigger reason for the bureaucracy involved has nothing to do with the nonprofits themselves, it is the idea of the IRS and your United States Congress. You see, those Washington types never trusted nonprofits, and don't trust them to give their money away to people who really deserve it, and so require this bureaucracy "for your own protection." If the charities that are being criticized for their bureaucracy were to just hand out cash without any paperwork, they'd lose their nonprofit status and have to pay taxes on their assets. That's taxes that would have to be paid out of your donations, further reducing the amount that would actually go to 9/11 victims.

Well, I for one am saddened that public hysteria won out over common sense and that the Red Cross caved in. Keeping a terrorism victim reserve fund would have been a brilliant strategic move. It's something the president should have spoken up and thanked them for. Instead, out of one side of our leaders' mouths (politicians and the media) they tell us to watch out for the next attack, and out of the other side they tell us we can't prepare for it. And did I mention that war is peace?

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