Canada Red Cross Revised Numbers for Giving to Local Charities

The Canadian Red Cross issued a press release on May 12, 2016 that Charity Intelligence has received questions about. All organizations revise numbers - public companies, government bodies and charities too. Numbers are restated and numbers change with additional information.

1. The 2% reported by Charity Intelligence was not an error. And it was definitely not a media error. Charity Intelligence takes full responsibility for reporting that 2% of the Red Cross’s donations went to local charities after the Alberta Floods. Charity Intelligence’s strength is doing numbers – and getting them right – based on the best information publicly disclosed.

This number is calculated based on what the Red Cross reported on its annual CRA filings for F2014 and F2015. The breakdown of this $916,719 figure was:

 2. On May 12, 2016 the Red Cross released its Community Grants report for the Alberta Floods. This covers all community grants made to local charities up to March 31, 2016.

Charity Intelligence appreciates this disclosure. With this disclosure Charity Intelligence is revising:  “ in the response to the Alberta Floods, the Red Cross reportedly gave $12,064,286 to 101 local charities. This represents 28% of donations.”

 3. The revision is qualified. The Canadian Red Cross’s report is not audited, but we subjectively feel this is solid information. It lacks disclosure on how much each charity received and when. From a first blush, this list appears to include charities that received money and/or goods (bulk shipments of food, palettes of water bottles, Canadian Red Cross first aid kits). Monetary grants are normally reported separately from gifts in kind. Ideal disclosure states each charity name, how much money it received, and in which year.

 4. The Canadian Red Cross did not previously disclose this information in its annual reports, audited financial statements or annual regulatory filings.

 5. The Canadian Red Cross did disclose in its F2014 annual filing with the Charities Directorate $411,754 of these community grants to charities for the Alberta Floods (some of these are included in the restated list, some are not):

6. T3010 filings are used as a last resort by Charity Intelligence.  Ideally material information would be provided in the audited financial statements. Alternatively, charities report material information in annual reports, granting reports, or in attached schedules.

7. Why Charity Intelligence didn’t use the information in the Donor Report Updates

The Red Cross’s donor reports on disaster relief are an interesting read. These progress reports share news and snippets of information and are well worth a donor’s time. In Charity Intelligence’s experience, the Red Cross’s donor reports have not been a reliable source of financial information. There have been material revisions to numbers reported. We raised our concerns with Red Cross management as far back as 2013. 

In general, Charity Intelligence feels these donor reports would benefit from greater clarity in the reporting of financial numbers. The “spending to date” figure may include money spent, committed and budgeted. Charity Intelligence feels these three categories are important and distinct. They should be disclosed separately.

8. Charity Intelligence policy: Charity Intelligence shares its analysis with Canadian Red Cross senior management. Charity Intelligence has posted a research report on the Canadian Red Cross since 2011 with the most recent update in August 2015. Charity Intelligence had several meetings and phone conversations with Canadian Red Cross senior management to discuss the Canadian Red Cross’s disaster relief efforts since 2013. Charity Intelligence will continue to share with the Red Cross our analysis and seek its comments and corrections, as is Charity Intelligence policy.

The Canadian Red Cross is one of Canada’s largest charities. Charity Intelligence’s research on the Canadian Red Cross is one of the most viewed postings. The Canadian Red Cross has a 4-star rating with Charity Intelligence, our highest rating, based on objective measures for its consolidated operations: Canadian Red Cross donor reporting is graded A- (high), it gets full marks for financial transparency (posting its audited financial statements), it has a funding need with funding reserves of $195 million that cover less than a year of its annual program costs of $235 million, and its overhead costs of 36% fall well within the reasonable range. Charity Intelligence's 2015 report on Canadian Red Cross.

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Legal disclaimer:

The information in this report was prepared by Charity Intelligence Canada and its independent analysts from publicly-available information. Charity Intelligence and its analysts have made endeavours to ensure that the data in this report is accurate and complete but accepts no liability.

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