Red Cross faces money woes

Coming on the heels of several mid-level natural disasters this spring, the floods swamping the Midwest have drained the American Red Cross' disaster relief fund.

The charity says its main cache of emergency funding is out of money, and it is preparing to borrow funds to pay for the shelters, food and other emergency supplies that it is providing in six Midwestern states.

Over the course of the flooding, the Red Cross has operated 119 shelters, many of which have closed as people returned to their homes. Counting people who stayed in a shelter more than one night, those emergency quarters provided nearly 10,000 overnight stays. The charity has served 480,000 meals and snacks and handed out 20,500 clean-up kits, which include bleach to disinfect living quarters.

“We're not going to stop or reduce our service delivery,” said spokeswoman Laura Howe. “We don't cut the kind of services we deliver.”

Officials estimate the emergency flood relief effort will cost at least $15 million.

So far, the relief organization says it has raised $8 million to cover flood-related expenses.

Earlier this week, the John Deere Foundation, the charitable arm of Moline, Ill.-based heavy-equipment manufacturer Deere & Co., announced a donation of $1 million to the Red Cross.

Howe said a string of natural disasters reaching back to last year have chipped away at the charity's relief fund. But expenses picked up in April with the onset of tornado season.

In the past two months, the Red Cross has responded to more than 30 U.S. disasters, ranging from tornadoes and floods to a fire in a large apartment building north of New York City this week. But even providing shelter for a few hundred families is expensive.

“We've had a record tornado season,” Howe said. “Part of the problem is when you have these small and medium-sized disasters, people across the country don't necessarily know they're occurring.”

Another factor hurting donations is the economic downturn, coupled with rising food and energy costs. Although the Red Cross is chartered by Congress to provide disaster relief, it runs largely on private donations.