Hurricane Provides New Money-Making Opportunity for Red Cross

The American Red Cross has become synonymous with tireless volunteerism in response to natural disasters. But San Franciscans learned in 1989 that there is a steep financial cost to this “volunteerism,” and that those seeking to help disaster victims should target their assistance to more deserving agencies.

The 1989 earthquake primarily impacted two very distinct groups in San Francisco: Marina residents and homeless persons housed through the city’s hotline hotel program.
While those displaced in the Marina were treated with dignity, the latter group was treated as if they were criminals trying to rip off the Red Cross.

At the Red Cross center set up to help homeless persons, those seeking food were required to stand in a long single file line to get lunch. Since over 1000 people lost housing because of the quake’s shutting down of the nightly hotline program, the line was extraordinarily long.

Although the Red Cross received millions of dollars in cash and in kind donations in response to the quake, they required identification and proof of entitlement before giving food to those in line. This process remained in effect despite many having to leave the quake-damaged Anglo Hotel (rebuilt as the Knox) without having the time to get their identification.

This obscene process imposed on the city’s poor meant that some waited hours in line only to be told that they lacked sufficient “proof” of homelessness to get a free sandwich. By that time, St. Anthony’s lunch period had ended, leaving a hungry and angry group.

There was a large surplus of volunteers who could have simply gone down the line handing out sandwiches and drinks. But the Red Cross insisted on making sleep-deprived, hungry people wait.

The class distinction in the allocation of Red Cross benefits was widely discussed at the time, and the agency made numerous excuses. But the bottom line was that Red Cross staffers treated poor people with contempt and acted like stereotypical welfare workers checking for client’s eligibility rather than spreading compassion to victims of a disaster.
Because the 1989 quake occurred just before the first pitch of Game 3 of the 1989 World Series at San Francisco’s Candlestick Park, millions of television viewers indirectly experienced the quake as it happened and were unusually generous with donations. Mayor Art Agnos and others began questioning the Red Cross about their use of this money, as it did not seem to be benefiting many of those in need.

The public soon learned that the Red Cross would not be spending most of the donations targeted for quake assistance in the Bay Area. The agency instead relies on existing resources to fund disasters, and uses the money raised for one crisis to help in the next.

The problem with this business method in San Francisco is that far, far more money was donated for quake relief than for other recent disasters. This meant that the Red Cross was planning on leaving San Francisco with well over $10 million in donations raised for quake relief.

To his great credit, Mayor Agnos did not let the Red Cross leave town with all of these funds.

Once he learned what the Red Cross was up to, Agnos let the agency know that he would not remain silent while funds earmarked for San Francisco went elsewhere. The Red Cross could either endure a public relations nightmare that could dry up future donations, or they could quietly agree to give San Francisco $10 million to “rebuild” its homeless program.

Although there was no basis for Agnos’ $10 million demand, that just happened to be the cost for the city to acquire two buildings for homeless multi-service centers. In light of the millions to be reaped from future disasters in jurisdictions less attentive to Red Cross budgeting, the agency quickly agreed to Agnos’ request.

Some described Agnos’ move as a “shakedown,” the phrase commonly used when poor people get benefits from the well-heeled (see, for example, the San Francisco Chronicle’s Rincon development coverage). But if the Red Cross paid the $10 million without a fuss, one has to believe that they still left town with millions in profits from their San Francisco efforts.

In subsequent years there were similar tales of class bias and questionable dealings by the Red Cross, but the agency retains a stellar public reputation.

With most of the hurricane victims low—income, direct your contributions away from the Red Cross and toward more locally-based agencies who will not take the money and run when the next disaster occurs.

A list of such agencies can be found at http://www.networkforgood.org/topics/animal_environ/hurricanes/?source=CN&cmpgn=CRS