THE AMERICAN Red Cross was plunged into the worst crisis of its recent history after it was swamped with donations in the aftermath of the September 11 terrorist attacks on New York and Washington.

The deluge of money received by the charity — $619 million (£331 million), almost half of every post-September 11 dollar donated to charity — immediately led to internal feuds, followed by a national outcry over how the charity intended to spend the money, and within a month of the attacks, the resignation of the American Red Cross president.

The agency initially indicated to donors that donations would go to the victims of the attacks and their families. But so much was raised (donations arrived at three per second over the internet alone) that Bernadine Healy, the Red Cross president, decided that $300 million would go to victims and their families, with most of the balance set aside to build up the nation’s blood supply and prepare responses to future acts of terrorism.

Dr Healy also took the unusual step of putting all the donations in one place, in a new account called the Liberty Disaster Relief Fund. She decided that the September 11 money should not be mixed with the charity’s longstanding National Disaster Relief Fund.

When the American Red Cross announced that $240 million of its Liberty Disaster Relief Fund would be reserved for future attacks and blood supply, there was an outcry. Donors who expected every cent of their money to go to September 11 victims rose up against the charity. An angry US Congress held hearings, in which Dr Healy was forced to testify.

The charity did little to assuage its critics when, asked by other relief groups and many politicians to provide details of where the aid money was going, it refused to divulge the information. Local Red Cross offices and other charities also feared that such a large influx of money for one disaster would deprive other relief efforts of much-needed cash.

In October 2001, Dr Healy, whose intentions had been honourable, resigned and the charity, facing a public relations disaster, rapidly reversed course. A marked increase of cash was paid to victims and their families, and the charity also opened up its records.

The American Red Cross crisis cast doubts over the competence of charities to manage large relief funds. Some on Capitol Hill have demanded government oversight. The charity has since spent millions of dollars in a PR campaign to regain the public’s trust.

The charity was also criticised for continuing to collect blood in the weeks after September 11, when it was clear that it would be wasted after no survivors were found in the ruins of the World Trade Centre.

A total of 250,000 pints of blood was collected, but 10,000 pints had to be destroyed within 42 days.

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