CEO of Trade Association Defends Decision to Not Donate to Occupy Sandy
Posted in: Occupy
A CEO for the Consumer Electronics Association (CEA), Gary Shapiro, has published an editorial, which defends his decision to not donate support the relief effort being undertaken by Occupy Sandy in the aftermath of the superstorm. The op-ed is remarkable because it indicates just how much respect the relief effort has garnered.
For background purposes, the CEA is a “US trade association representing more than 2,000 consumer electronics companies.” Shapiro is the president. He also is a top lobbyist in Washington, DC, who has worked to influence policy on intellectual property protections and immigration reform. And Shapiro is a best-selling author and apparently has a book coming out in January 2013 titled, “Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses.” So, he’s a confident individual ready to use the language of ninja pop culture to garner some attention for what he knows about business strategies.
The op-ed begins:
An interesting thing happened when the Consumer Electronics Association announced that we would be contributing to the American Red Cross to help those affected by Hurricane Sandy. We got pushback from reporters and colleagues who did not think a contribution to the Red Cross was a good idea. Some said we should be giving to the Occupy movement’s spinoff, Occupy Sandy. [emphasis added]
Shapiro then proceeds to concisely explain why he could not bring himself to sign off on having his association give to Occupy Sandy.
He explains it is not true that the Red Cross “spends a large part of its contributions on overhead.”
…According to Charity Navigator, the Red Cross spends four percent on administrative costs, and less than four percent on fundraising expenses. More than 92 percent of its income goes to programs that benefit the community. [Gail] McGovern’s annual salary represents a fraction of the organization’s expenses, much less than many of her colleagues who run similarly sized nonprofits. Charity Navigator notes that an organization is “most efficient” if 75 percent or more of its budget goes to programs and 25 percent or less goes to administration and fundraising…
This may be a concern of people reluctant to donate to the Red Cross, but, primarily, this seems to be insignificant when compared to the reports of the Red Cross being absent in areas or being present but not really doing much to help.
Shapiro asserts, “While the Red Cross may have been slower to mobilize and respond, it was certainly more organized and effective.” He claims he spoke to volunteers, who did not know what to do when they were present to help. He attributes this disorganization to the fact that the Occupy movement “rejects organized hierarchy through which people can be assigned various helpful functions. The self-described ‘horizontal hierarchy’ embraced by Occupiers is well meaning and can be effective, but may not be as efficient as the Red Cross’ management style.” He also writes, “By its very nature, Occupy Sandy, like the Occupy Wall Street movement on which it is based, lacks oversight, accountability or structure.”
It is very rich to read an American CEO’s argument that a grassroots organization or movement lacks or needs more “oversight, accountability or structure,” especially when corporations enjoy an immense amount of power and influence over government to deter and quash investigations into corruption. Also, the Red Cross is a well-known establishment charity that everyone thinks to donate to after disasters when they want to help. It should, by comparison, have way more oversight, accountability and structure because it handles millions of dollars in donations.
The reality is that the Red Cross has not been “flawless.” There are multiple examples where it is clear Red Cross’ model of philanthropy is not helping people impacted by Sandy in the way people need to be helped.
The Gothamist reported this firsthand account from a volunteer, who has also worked as a journalist. The account suggested the Red Cross’ efforts have been “poorly coordinated” or “ineffective”:
”I don’t think it’s an exaggeration to say that the contribution of our 40 volunteers, two buses, and truck full of supplies to the Rockaways relief effort amounted to nearly nothing,” writes the volunteer, who asked that his name not be published. “I can’t overstate just how much aimless standing and walking around we did at every stage of the operation. By far the largest part of the day was devoted to walking from one arbitrary place to another.”
To McGovern’s suggestion the relief effort has been “nearly flawless, the volunteer reacted, “The Red Cross is apparently gauging its success by volunteers deployed, supplies distributed, and dollars spent, no matter how belatedly or pointlessly. The people they are trying to help must have other criteria.”
In a post for Reuters, Ernest Scheyder described how the bureaucratic nature of the Red Cross had gotten in the way of providing relief. Here’s one example:
Noreen Ellis begged the American Red Cross for help a few days after Superstorm Sandy slammed into the U.S. East Coast.
A 90-year-old bedbound woman living on Ellis’s block needed to be moved from the Rockaways, an eight-mile long, narrow spit of land in New York City, to a shelter with heat and electricity.
“I said, ‘This woman needs to be transported. Can you help?’ And the Red Cross said, ‘We don’t do that,’” Ellis said.
She shot back: “What does the Red Cross do?”
The fact is right now, in the news, reports are highlighting how residents impacted by Sandy are disappointed with the Red Cross or lauding Occupy Sandy. CBS News, for example, acknowledged the kudos the effort was receiving.
Toward the end of Shapiro’s op-ed, it is as if the comparison between the Red Cross and Occupy Sandy was all a formality. The real reason he cannot have his association support Occupy Sandy’s effort is the similar to the reason the Carlyle Group decided to not send 200 volunteers to help:
The bottom line is that for an organization like CEA – which represents 2,000 corporations and even more personal political interests – there is no way we can make a contribution to anything related to the political mission of the Occupy movement.
In a disaster relief effort, it really should not matter what organization one supports if that organization is delivering mutual aid to victims. One should not be telling someone to donate to Occupy Sandy over the Red Cross or the Red Cross over Occupy Sandy unless they can point to some concrete examples where efforts have failed.
Additionally, Occupy Sandy might be filling a gap created by larger organizations like FEMA or the Red Cross so maybe it should not be framed as an issue of who is outperforming who and which one is better. The effort by Occupy Sandy probably does not include people with the experience providing emergency response that people working for FEMA or the Red Cross have. On the other hand, the Red Cross has reportedly been sending goods like blankets, which it prefers to not have to handle, to Occupy Sandy to distribute.
In conclusion, the reason why Shapiro’s op-ed is notable and worth writing about is not that it makes the case for the Red Cross but rather that it lays bear the reality that a radical group of organizers have been tremendously successful. There are reporters, residents and colleagues of Shapiro that find what they have done is exemplary. Corporations and businesses have considered donating, even though they may have had a distaste for Occupy Wall Street. But, in the end, for people like Shapiro, their business or capitalist ideology is impossible to ignore and Shapiro recognizes the popularity and respect is so high that he must justify a rational business decision to not support Occupy Sandy.