The American Red Cross And The Liberty Fund: Ethically Stuck Between Accountability And Development

Abstract

Organizations today face increasing complexity in their environment. This situation is at the heart of many institutions nowadays: how to become an ethical decision-making organization. The objective of this paper is to analyze a particularly “ethically sensitive” situation the American Red Cross faced with the Liberty Fund. We will examine this by including three factors: becoming a true mediating institution, keeping to the social contract, and maintaining a community frame of mind. Since the beginning of its foundation, the American Red Cross has been providing emergency services to disaster stricken populations, and this was no different during the September 11^th attacks. However, contrary to its usual general disaster fund, the American Red Cross decided to create a separate account for the 1 Billion dollar fund. Yet before this total amount was reached, there was clear insatisfaction from the public as the ARC announced that not all funds would be spent on this relief effort, and that some funds would be kept for prevention and development: the ARC announced, admitted and apologized for “poor judgment” and that all funds would be for the victims of the event. This paper will analyze the decision process surrounding this decision by the ARC taking into consideration accountability and ethics according to three principals derived from scientific literature on ethics: accountability, procedure and altruism.