one of the reasons i started to volunteer with the Red Cross is EXACTLY because most of the donations goes where it's needed. The Red Cross consistently gets rated (by congress and consumer reports and other watchdog groups) as being one of the top 3 or 4 efficient relief organizations. The key thing when donating is to mark your donation for a specific purpose. For example make the check out to: American Red Cross Hurricane Katrina Relief. Or you can mark your donation for the general disaster fund. If you just make a donation to the Red Cross without anything specific....well yes there are operating expenses and every dime for the Red Cross comes from donations of the american people. they are not funded by government or tax dollars.