Ethics are those concerns a community and society have in relation to values, behaviors, and morals (Northouse, 2013). When the economy forces people to hold a little tighter to their money, non profits are one of the first to suffer. Since American Red Cross is run entirely on donations, they feel the pressure of figuring out how to still perform their services on limited funds. How they do this is allocating funds saved from other donation times to the best of their ability. While donations still tend to come in, there are times when the money is simply less and choices need to be made. It takes an inordinate amount of money to care for those in the throes of a natural disaster. For instance, Red Cross devoted 8 million dollars to helping families in need after the tornadoes in Oklahoma in May of 2013 (American Red Cross, 2013). With that money, over 460,000 meals were distributed, 5,000 families were provided beds in disaster relief shelters, and 400,000 relief items were distributed (American Red Cross, 2013). What originally seems like plenty of money, however, ran out very quickly.
In the wake of 9/11, American Red Cross came under fire for withholding donations in preparation for future disaster and this practice became very suspect. The organization received a mass amount of donations which totaled a little over 564 million dollars (Rhode & Packel, 2009). The public expected all the money to go to 9/11 relief efforts, but was unaware of how American Red Cross allocated funds, which was to save some for a rainy day. Leaders at Red Cross held half of those donations for future endeavors (Rhode & Packel, 2009). This was not unusual, as they had redistributed funds after the Oklahoma City federal building bombing in 1995, the 1997 Red River Valley flooding, and the 2001 wildfires in California (Salmon & Williamson, 2005).
This common practice was noted by the public during the wake of 9/11 and the public was not happy. They shouted non-transparency. They shouted that their funds were not being used as they intended them to be (Rhode & Packel, 2009). They started having donors pull out and donations became less and less.
American Red Cross answered back by forming an ethical policy making the redirection of earmarked contributions an ethical violation. Even though they had always done this, the public forced them to rethink their strategy (Salmon & Williamson, 2005).
In thinking about the violations of ethics within these numerous distribution fiascos, a look at the American Society for Public Administration (ASPA) Code of Ethics is warranted. The very first ethic is to “advance the public interest [by] promot[ing] the interests of the public and put service to the public above service to oneself” (ASPA, 2012, para. 1). It is easy to see how American Red Cross justified the holding of funds for future disasters, but it is also very simple to understand why the public would expect funds they donated for a specific disaster to be given to that particular disaster. The fifth ethic of the Code indicates that the organization must “fully inform and advise [by] provid[ing] accurate, honest, comprehensive, and timely information” (ASPA, 2012, para. 5). If the American Red Cross had been transparent in their practices, this redistribution of funds may never have been a concern.
Both of these ethics, as far as the public was concerned, were being violated. By not showing full transparency of allocated funds and holding back on monies to be used later, the public felt duped. They gave money for what they believed was a specific cause and it was not happening. Rhode and Packel (2009) remind organizations that full disclosure is best and they “cannot afford to raise funds on the basis of misguided assumptions, or to violate public expectations in the use of resources” (para. 29). Byers (Laureate Education., 2008) said it best when she said “declare and disclose” – no matter what the situation, the best thing to do is always be open, especially when other people’s money is at the heart of the matter.
So, my point today? Here’s your full transparency and disclosure:
1.2 million children right now are homeless.
Americans spent $12.29 billion over the two-day period between Thanksgiving and end of Black Friday this year in stores (CNNMoney, 2014).
For every 10,000 individuals in the US, 19 are homeless right now.
Shopping was up by 27% on Thanksgiving compared to 2013 (CNNMoney, 2014). 45% of all money went to electronics with the big ticket item being the television.
For every 10,000 veterans, 27 are homeless right now.
31% of the food in stores and in homes in the US is thrown away per year, accounting for 133 billion pounds of food waste a year.
1 in five children in the US is hungry right now.
So, with that being said, does it matter where your funds are going as long as they get there? If you have an extra dollar, contribute it to American Red Cross or another non profit this month. If you don’t have an extra dollar, contribute your time. These non profits will put you or your money to good use, I promise. Because, I’m pretty sure, that non profit is not going to go to the store to buy a television.
American Red Cross. (2013). FAQs: Oklahoma tornadoes. Retrieved from http://www.redcross.org/news/article/FAQs-Oklahoma-Tornadoes
American Society for Public Administration. (2012). Proposed code of ethics. Retrieved from
Rhode, D.L. & Packel, A.K. (2009). Ethics and nonprofits. Stanford Innovations and Social Review. Retrieved from http://www.ssireview.org/articles/entry/ethics_and_nonprofits
Salmon, J.L., & Williamson, E. (2005, October 28). Red Cross borrowing funds for storm aid. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702392.html
Laureate Education (Producer). (2008). Vital factors in finance and budgeting: Ethics and technology [Video file]. Retrieved from https://class.waldenu.edu