American Red Cross: Disaster Funds Are Depleted

By: Associated Press
By: Associated Press

DES MOINES, Iowa (AP) -- The American Red Cross said on Monday that its Disaster Relief Fund is wiped out and it's being forced to borrow money to help flood victims throughout the Midwest.

Jeff Towers, the organization's chief development officer, said the balance for domestic disaster relief efforts is zero. He said the American Red Cross would borrow to keep workers and volunteers in the field helping flood victims.

"The Red Cross remains committed to providing the scale of services that people expect of the Red Cross when disaster strikes, and the way that we are doing that right now is taking out loans to fund our response," he said during a conference call from Washington. "That's not a position we want to be in; it's obviously not sustainable."

The shortage in the organization's only domestic disaster relief fund comes as it continues flood relief efforts in soaked Iowa and ramps up its work downstream in Illinois and Missouri as more flooding is expected there. Officials said the Red Cross has 2,500 workers on the ground, 89 percent of them volunteers.

Joe Becker, senior vice president of disaster services, said the fund has been depleted over the past few years in the absence of large-scale disasters that bring attention to the relevance of the Red Cross.

"We have had a large number of mid-size disasters or silent disasters that have cost us a considerable amount of money where we've not been able to raise what it's cost us to provide that service," he said.

So far, he said the flood response in the Midwest has cost about $15 million, and Towers said it could reach as high as about $40 million.

"That's putting this in the category of a very significant disaster for the Red Cross, historically, when you would look at what we spend on relief efforts," Becker said.

Towers said the organization has raised only about $3.2 million toward the flooding response. He said it's an especially difficult time to seek funds with a troubled economy and many previous givers now reaching an age that they are on a fixed income.

He said much of what the Red Cross can expect to spend will depend on what happens down river.

"Frankly, the wild card is whether St. Louis floods or how significantly St. Louis floods," Becker said, adding that the crest there is expected to be 39 feet, about 10 feet lower than in 1993. "We're taking that as good news."

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