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American Morning

How Does American Red Cross Allocate Donations?

Aired November 09, 2001 - 10:57   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)

THERESA HURST: My name is Theresa Hurst from Fort Mill, South Carolina, and I want to ask CNN, how does the American Red Cross allocate donations?

PETER VILES, CNN CORRESPONDENT: Teresa, the Red Cross has set out a budget outline for allocating donations, and it has turned into a very controversial budget. To start, the Red Cross has raised more than $500 million. It Plans to give 100 million of that directly to families of the victims in gifts of about $20,000 per family, the amount to be determined based on a simple formula. How much money does the family need for needs like food, housing and clothing over the next three months?

Another $200 million is earmarked for disaster relief aid and other financial aid to victims. For example, feeding and sheltering those thousand of relief workers down at ground zero in New York, or sheltering people who were temporarily homeless after the attacks.

But here's the controversy. There's more than $200 million left over after that. And the Red Cross is putting aside for future needs, whether the needs of the particular victims in the years ahead, or perhaps the victims of some future terrorist attack, or to better prepare the Red Cross for those attacks. The Red Cross now describing its Liberty Fund as a war fund, and pointing out that this war is not yet over.

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