I think it would be a mistake to bias charitable donations towards acute problems as opposed to chronic ones.
But on the other hand, increases in the total amount of charitable giving are a net plus, so I'm not complaining about this story, I just think it's good to think of the bigger picture too.
Initial disaster relief by necessity has to address short-term needs. Food, shelter, medicine, sanitation. Once basic needs are met, some organizations declare victory and leave. Others - typically those based in the community in the first place - continue to work on long-term recovery efforts, ranging from education, microloans, economic development, job training, etc. It really depends on the organization and the needs of the community.
Never donate to the Red Cross, pick a Real Charity
The Red Cross is very good about covering their tracks... but they do very little to actually help people. Any money you donate today will never make it to people in need. Most of the "help" the red cross is/will be credited for is provided by the US Government via federal programs (FEMA, Local Aid, etc), military aid, Or Local VOLUNTEERS not from the Donations of Citizens.
Most of the money will be used to pay for more marketing for the Red Cross, and to pay their Executives High Dollar Salaries.
Here is a 20/20 Story
However, to be honest the Red Cross is VERY good about keeping their name out of papers. Paying just enough to people to make most complaints seem like "conspiracy theories"
If you want to waste your money, go head.. But Giving to the Red Cross will help people about as much you burning it in your fire place
And do not get me started on the Massive Scam that is their Blood Selling business, where you are legally prohibited from "selling" your blood so they take it for free, then flip it for a massive profit by selling it to the hospitals for those in "need", or in reality for cosmetic and elective non-emergency surgery which is where most of the blood supply is used.
I don't doubt that an international association like the Red Cross has administrative overhead. It is reassuring thought that overall reports  seem to be positive.
If that argument is not enough, I'd argue further: we cannot know for sure how (or if) our contribution will make it to those that need it, but I'd rather donate now and research later than postpone the donation "just until I find the ideal charity" and then forget about it. The Red Cross has been around for around a hundred years, though, so I'd say that's good enough when it comes to trusting a random association to coordinate at a global scale.
Disclaimer: I donated to the Red Cross
I'm only familiar with the analysis given on "giving what we can" but I also think it's dangerous for everyone to rely on this one analysis. I guess there is room for "meta charity" where people donate their time and expertise to figuring out which charities are the most efficient.
Disclosure: I work for http://www.globalgiving.org which helps grassroots non-profits from around the world that lack name brand recognition fundraise for their projects. Kiva is to microloans as GlobalGiving is to donations.
The report itself says "We feel that this intervention faces an unusually low burden of proof, though donors' intuitive reactions to it may vary widely."
EDIT: actually the full report deals with the relative effectiveness of cash transfers in some detail.
That being said, effectiveness of dollars spent is just one measure of a non-profit. It's similar to asking what's the best food. Each person has their own preference, much like each community/country has their own needs. There's no silver bullet to solving the world's problems. It's going to take a wide range of non-profits to address a wide range of problems. When determining your giving, a diversified approach will likely give you the biggest long term impact.
He sets aside some amount of his income (say 10%) for giving. Some percentage of that (5%) is allocated to organizations that will receive money each month/quarter/year. The remaining 5% is donated as needs arise (disaster relief, meeting someone who needs financial help, etc). At the end of the year, if any of that 5% remains, it is given away to one of the other organizations he supports.
So, this sort of planned/unplanned giving allows you to distribute your funds across organizations (those that provide acute care and those attempting to solve chronic problems.