STAFF CUTS DRAW BLOOD AT FLORIDA BLOOD CENTERS

February 22, 2010, Chicago

We thought we had previously written about the goings on at Florida’s Blood Centers—we certainly have included a discussion of the conflicts of interest that existed at the center in our new Webinar, which will be available later this year.  We, however, haven't posted a blog about the story that first came to our attention last November when we were in Florida for a conference.

As it turns out, the Orlando-Sentinel has been running stories about this nonprofit since...

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early 2009.  Located in Orlando, the center is the main source of blood in the Orlando area and one of the largest blood centers in the country.  The Sentinel uncovered a number of conflicts of interest and focused on the chief executive’s compensation, which was cast in the stories as unreasonable.  Scott Maxwell, Blood Bank Does What It Should Have Done Months Ago, Orlando Sentinel (November 22, 2009).

After the Florida State Senate held hearings, Florida’s Blood Centers appeared to get religion on governance and transparency.  In November, the center announced that it would no longer do business with board members.  It also set term limits on board members—something that we believe is not the holy grail that many make it out to be.  Dan Tracy, Facing Senate Inquiry, Blood Bank Changes Its Way, Orlando-Sentinel (November 21, 2009).

At the time, the newspaper also reported on the salary of Anne Chinoda, the blood bank’s CEO.  It was close to $600,000.  Apparently a special committee was appointed to review her salary and the salaries of several others.  We refuse to pile on when it comes to salaries.  Chinoda and the others may be worth every penny that they earn.  Just because an organization is a nonprofit doesn’t mean that those who work for it are nonprofits.

In our view, the biggest lesson to come out of this story is a public relations one.  One executive who worked in public relations told a blood donor, “Hardly anyone will pick up this story and run with it because the Sentinel is largely irrelevant.  It’s not like Anne took stimulus money and purchased a G5.  Wake me up when you have news.”  Dan Tracy, Blood-center CEO’s Pay Jumped 22% in One Year, Orlando Sentinel (March 13, 2009).  It is best not to castigate the media.  The Sentinel has kept a sharp eye on Florida’s Blood Center since last March. 

Dan Tracy reported on February 16, 2010 that Chinoda received a 13% pay increase toward the end of 2009, with 42 blood center employees being laid off less than two months later.  Blood-Bank Chief’s Pay Raised to $605,000—Then 42 Jobs Cut, Orlando-Sentinel.  The article contains exactly what you would expect—quotes from people condemning the pay increase in the middle of a recession.  Once again, we refuse to condemn a pay increase or a particular level of pay, but the coverage points out why nonprofit boards should take public relations into account whenever planning action, particularly when the action involves executive compensation. 

Florida’s Blood Center should have had a pay study in hand that it could use to justify the pay increase.  Moreover, we can only wonder how much the original antagonism toward the media inspired the continued coverage.   Lesson:  Once the media has you in their sights, it is hard to avoid further and ongoing scrutiny.  Never mind that few jobs would have been saved  had Chinoda foregone the $71,000 pay increase.  Do the math:  $71,000 divided by 42 jobs comes to $1,690 per job.   But a scandal is a scandal and continues to bear fruit for the meida, which is why nonprofits should avoid that taint of scandal,  as a second article in the Sentinel aptly demonstrates.  Scott Maxwell writes:

Allow me to put $605,000 in perspective for you.

That is substantially more money than the CEOs for Habitat for Humanity of Greater Orlando, the Center for Drug-Free Living, United Cerebral Palsy of Central Florida and the Harbor House center against domestic violence make — combined.

None of this should be viewed as criticism of the Sentinel.  They’re just doing their job and Florida’s Blood Bank is fair game.

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