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Probe Raises Red Flags About Efficiency of Spending by American Red Cross

Charity claims less than 10 percent of donated money goes toward expenses, but real overhead costs have been much higher

sandy red cross

The American Red Cross, which has come under scrutiny for waste and ineffectiveness in its distribution of aid to Hurricane Sandy victims, is also inefficient when it comes to spending the millions of dollars in donations it receives every year.

While Red Cross officials assert the only 9 percent of donated money goes toward expenses – in other words, that 91 cents of every donated dollar goes to humanitarian services, not overhead costs – an investigation by the nonprofit watchdog group Pro Publica, in conjunction with National Public Radio, shows that the charity’s overhead costs are much higher.

In recent years, the Red Cross' fundraising expenses alone have been as high as 26 cents of every donated dollar. And the charity spends even more of its donated money on “management and general" expenses.

Read the full story, including a response by the American Red Cross.

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