The case for unrestricted funding

Trust. It's at the heart of charitable giving.

Abuse by some nonprofits have lead to a high level of mistrust of nonprofits by the very donors they rely on. This is why donors are demanding that they be able to better direct where their charitable dollars go. Instead of going to a general operating fund, which donors often interpret to mean "the CEO is going to give himself a big fat bonus," they want their funds to go to exactly the cause they wish to support.

Thus the reason why the American Red Cross is currently swimming in approximately $100 million in their International Response Fund. These are dollars that were raised in response to the Haitian earthquake crisis.

That's good news for Chileans.

Now an 8.8 magnitude earthquake has hit Chile, and while, as this article in the Pittsburgh Tribune Review points out, Chile is in a better position to respond to this disaster, there is still a need for an international response. People have already opened their wallets to give in response to Haiti; there are fewer who are willing to give as generously to respond to another natural disaster on the heels of the first.

Now the American Red Cross can divert the funds initially raised for Haitian relief to fund Chilean relief -- immediately. After all, donors gave to the "International Response Fund." While this money was raised under the pretext of use in Haiti, it can easily be sent to aid another country suffering another natural disaster.

Imagine the pickle the ARC would have been in had the funds been restricted to use ONLY in Haiti. They would have had to contact each and every donor and ask permission to divert funds to Chile, a time and resource-intensive endeavor, one which would not have been a good use of their charitable dollars. And what would ARC have done with $100 million in Haiti? What is the true cost of responding to a natural disaster? Does the ARC have the resources to occupy the country for years, to help re-build its intrastructure and systems, to improve it better than that which existed prior to the earthquake? Does that kind of response exist within their mission, their charter? I suspect not.