Bushfire aid: Red Cross admits to $11 million ‘administration cost’ to help fire victims

The Australian Red Cross has admitted it may spend as much as $11 million processing the millions of dollars people from across the globe have donated to its bushfire appeal.

However, in the face of public outcry, the charity has been forced to revise an earlier statement that suggested a large proportion of the $95 million raised could be quarantined for future natural disasters.

The charity also pledged on Thursday to speed up the rate of its delivery of emergency funds to bushfire ravaged communities.

“We’re now paying a million dollars a day and we’re keen to continue to speed that up, we know the assistance is needed now,” Red Cross’s director of emergencies, Noel Clement.

Clement said the charity had already dispensed 700 grants of $10,000 each, totalling $7 million.

He conceded however that of the revised total of $115 million donated so far – up from yesterday’s figure of $95 million – as much as $11 million could be spent on administration costs.

Such a figure – roughly 10 per cent of total revenue raised – is generally considered to be the uppermost limit of acceptable administrative costs among large charitable organisations.

“We are not expecting to spend 10 cents in the dollar,” Clement told Seven.

“We have a commitment to spending no more than that.

“We know from past experiences we tend to spend a lot less than that, and that’s what we will be working to do.”

Dedicated funds to fire victims

Clement was also forced to correct his organisation’s statement made in a press release issued on Wednesday, which stated:

“It is also prudent to plan for the inevitable disasters to come, so our Disaster Relief and Recover Fund remains in place to scale up and respond when the cyclones and floods hit.”

The charity chief said Red Cross was committed to ensuring the “balance of funds” would be used exclusively to support bushfire affected communities.

The prime minister, Scott Morrison, has weighed in to the controversy, saying during a press conference on Thursday that he was satisfied that charities and state governments were working with the Federal Government to assist fire-affected communities as efficiently as possible.

“The Salvation Army, the Red Cross, St Vincent de Paul – these are trusted, respected good-hearted organisations that have proved themselves in so many disasters, and that’s why we rely on them,” he said.

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