For the Red Cross, 91 percent is a magic number.
As ProPublica and NPR detailed in a story published today, the American Red Cross has often claimed that it spends 91 cents of every dollar donated on services. But that number wasn't true and after inquiries by ProPublica and NPR, the Red Cross removed the statement from its website.
Then, the Red Cross said 91 cents of every dollar it spends is spent on humanitarian services. That is technically true but misleading. The Red Cross has an enormous blood business. People give blood and the charity sells it to organizations like hospitals. The Red Cross spends billions of dollars to operate this business, but none of that spending pays for disaster response, which is supported by donations.
Today, the Red Cross has responded to our story, and has made a third 91-cent claim.
The charity now states, "The Red Cross receives contributions from many sources, including financial contributions, donations of blood or an in-kind donation of other goods and an average of 91 cents of those donations are invested in our humanitarian programs and service." [emphasis added]
So the charity is now resting its claim of 91 cents of donations going to services on the idea that donations include not just money but also "donations of blood."
Except, as the Red Cross' own audited financial statements show, blood isn't considered a contribution. (Since the Red Cross sells the blood people give, it is not a donation but rather revenue from sales.) Indeed, the IRS prohibits people from claiming the blood they give to the Red Cross as a charitable donation.
Why is the Red Cross now counting "donations of blood" as a financial contribution, contrary to their own tax filings?
We asked the charity, and, in response, spokeswoman Suzy DeFrancis wrote, "It was not our intention to use the term 'contribution' in its accounting sense."