Donations for Hurricane Relief Exceed $2-Billion, but Costs Soar

Donations to aid victims of Hurricanes Katrina, Rita, and Wilma have now topped $2-billion, an outpouring of

support that is nearing the $2.2-billion total donated in 2001 after the terrorism attacks.

Much of the latest increase reflects gifts that were sent through the mail or collected by church congregations. Catholic Charities, for example, has now raised $84-million, up from the $25-million it had raised just a month ago.

Yet even as contributions climb, the costs associated with responding to the natural disasters are growing as well.

The American Red Cross — which has received the bulk of all donations — has been spending money faster than it can raise it to cover hurricane-related costs.

The Red Cross has raised $1.3-billion for hurricane relief, but so far has spent $1.7-billion. It has also spent the roughly $50-million it had on reserve in its disaster fund to respond to the storms.

At the same time, the organization is coming under scrutiny by members of Congress as questions emerge about gaps in its response to the hurricanes, which devastated parts of Alabama, Louisiana, Mississippi, and Florida.

The Senate Finance Committee is looking into criticisms of the Red Cross, according to Sen. Charles E. Grassley, Republican of Iowa.

“The United States relies on the Red Cross for disaster relief,” he said in a written statement. “The charity’s hurricane response presents an opportunity to make sure that reliance is well-founded. It gives us a chance to support what went well and fix what could have gone better.”

And a Mississippi Democrat, Rep. Bennie Thompson, asked the American Red Cross to respond to seven questions about its relief work, including why the charity was delayed in getting help to Katrina victims and what the Red Cross has done to reach out to black religious organizations in its work.

In its response to Representative Thompson, the Red Cross outlined some problems it encountered working with the Federal Emergency Management Agency. For example, the organization says it requested five million pre-packaged meals from the agency on August 29 but received just over 100,000 meals more than a week later.

The $340-million so far that the Red Cross has borrowed will fuel the charity’s Wilma relief efforts, which include operating some 100 shelters and 10 mobile kitchens in Florida.

Sarah Marchetti, a spokeswoman for the Red Cross, says the group estimates that as much as $500-million in donations “are in the pipeline” and will soon be added into the total the charity has raised for hurricane relief.

In a statement on its Web site, the Red Cross says it expects to get reimbursed by the federal government for money it has spent to house hurricane victims in hotels as part of a program it ran with the Federal Emergency Management Agency.

The cost of that program could run as high as $250-million, the Red Cross estimates.