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(Reuters) — The American Red Cross risks damaging the reputation of the global Red Cross brand because of its refusal to stop accepting donations from tobacco companies, a top official with the humanitarian network said.
These concerns are prompting the International Red Cross and public health organizations to press the U.S. group to end its longtime policy of taking tobacco money, Reuters has learned.
The International Red Cross, which recently rolled out a global disease prevention program with a strong anti-smoking component, hasn't accepted tobacco donations since 2008. Most of the group's 189 national affiliates don't accept money either, but the powerful U.S. member does, as do about half a dozen other countries, including Germany, Russia and Vietnam.
While precise figures are not available, the American Red Cross and its U.S. affiliates have received at least $12 million from tobacco companies such as Altria Group, Reynolds American and Philip Morris International since 2001, according to Red Cross tax records and tobacco company press releases and annual reports.
An American Red Cross spokeswoman, Laura Howe, declined to comment on the dispute with its parent body — whose guidelines are not binding on its affiliates — but said it was happy to accept any funds that support its efforts to assist disaster victims. She also declined to say how much it received from each company.
International Red Cross officials say that by accepting the donations, the U.S. group risks damaging not only its own reputation but that of the entire global humanitarian network. Some public health advocates agree, saying there is a contradiction between the Red Cross's mandate to aid the vulnerable and its acceptance of money from an industry whose product may cause death.
Matthias Schmale, undersecretary general for the International Federation of Red Cross and Red Crescent Societies, said officials have talked with American Red Cross officials and asked them to drop the tobacco funding.
"We have been very clear about the potential reputational damage not just for them but for all of us," Mr. Schmale said in a telephone interview from Geneva. "So far, we have not taken the route of public condemnation. We want to respect that they are an important supporter of ours."
He said the parent body would continue "to put pressure" on the American Red Cross to change its policy, although he would not say what form that pressure would take.
Despite the controversy, there has been little public debate about the donations. And the dispute between the American Red Cross and its parent body has not been reported until now.
How the dispute is resolved could be felt beyond the American Red Cross. Anti-tobacco activists hope that if the U.S. group bows to pressure, it could influence other nonprofits to reject millions of dollars in donations.
John Stewart of Corporate Accountability International, a watchdog group, said if the American Red Cross stopped accepting tobacco money it would undercut the tobacco industry's global public relations strategy to gloss over its "tarnished image."
Critics argue that by accepting donations from tobacco interests, the organization, one of the largest charities in the United States with 2013 revenue of $3.4 billion, is muddying its public health mission while providing the tobacco industry with a public relations boost.
Major U.S. and European tobacco companies including Reynolds American, Altria and Lorillard as well as Philip Morris International and British American Tobacco P.L.C. acknowledged the donations and said they were among some of the millions of dollars they give away.
"When there are important disasters, and people have significant needs, that is the right thing for corporations to do," said Altria spokesman David Sylvia.
Ms. Howe, the American Red Cross spokeswoman, said in an email that all donations "are important to the American Red Cross and the disaster victims they assist."
"Collectively, donations of all amounts allow us to provide disaster victims with food, shelter and emotional support," she said.
Asked about any pressure from the international body to stop taking money from tobacco interests, Ms. Howe said: "As a matter of practice, we don't share the details of private conversations between Red Cross officials."
The International Red Cross has been encouraging its U.S member to drop the funding since 2008, but it stepped up the pressure in 2014 after implementing a new healthy living program that includes smoking cessation.
Pressure on the American Red Cross is coming on other fronts as well. On Dec. 19, some of the largest U.S. public health advocacy organizations, including the Public Health Law Center and Action on Smoking & Health, wrote to American Red Cross President Gail McGovern, urging the organization to stop taking tobacco donations.
"The Red Cross/Red Crescent Movement is respected around the world for protecting life, health and human dignity," the letter said. "To lend its enormous credibility, connection and influence to an industry that sells and promotes a product that kills 6 million people a year is a serious violation of the most basic principles of public health."
The American Red Cross would not comment on the letter, which has not been made public before.
The tobacco money represents a steady but small percentage of the American Red Cross's annual contributions — it took in more than $1 billion in donations in fiscal 2013.
Tobacco companies have been donating to the American Red Cross in some instances as far back as the 1960s, but confirming the size and dates of donations made before 2001 is difficult because historical documents are not easily obtainable.
The Red Cross may take the money from tobacco companies because, like most nonprofits, it is under pressure to raise money each year for its general fund whether or not there is a disaster that brings in donations, said Ken Berger, president and CEO of Charity Navigator, which rates charities for donors.
"One reality is no matter what size a nonprofit is, they are usually strapped for cash," he said. "To have money that is unrestricted and could be used for general operations are the most precious (donations)."
Altria's Mr. Sylvia said it has donated to the organization for decades and now contributes $500,000 annually to the American Red Cross Annual Disaster Giving Program. It also has provided many one-time donations after specific disasters.
Reynolds American, its foundation and subsidiaries have given more than $1 million to the American Red Cross during the last five years, according to the company. Philip Morris International has given $123,000 since 2008.
(Reuters) — A decision by a Florida jury to impose punitive damages of $23.6 billion against RJ Reynolds Tobacco Co. on Friday is likely to be rejected on appeal or the award reduced substantially, lawyers with expertise in jury awards said on Sunday.