Charity's relief effort bleeding red ink

WASHINGTON — The American Red Cross said Friday it is going deep into debt to fund a $70 million Hurricane Gustav relief effort, an unusual occurrence even as the nation's biggest disaster-aid charity braces for a trio of powerful storms lurking in the Atlantic.

The Red Cross has raised less than $5 million toward its Gustav expenses, officials said. To recoup its Gustav cost — most of it borrowed money — the nonprofit organization plans to roll out an aggressive national campaign Monday.

In 2005, the Red Cross borrowed money for the first time in its 127-year history when it took out a $340 million loan to help pay for its $2 billion response to hurricanes Katrina and Rita. The nonprofit organization quickly raised the money to cover the debt.

But since Gustav weakened as it churned onto the Gulf Coast, Americans struggling in a soft economy have not responded with an outpouring of giving as they did three years ago when Katrina hit.

The shortfall comes at a perilous time for relief groups as an unusually high number of U.S. disasters this year has taxed charities — from wildfires in California to tornadoes across the South. With their resources depleted, the same charities are mounting efforts for Tropical Storm Hanna, as well as Hurricane Ike and Tropical Storm Josephine.