Charity Governance

IOWANS SHOULD GET OFF THE AMERICAN RED CROSS' CASE

DATELINE: June 5, 2008, Chicago

People should get off the American Red Cross' case. According to Stephanie Strom of the New York Times, the Red Cross has been busy raising funds to assist victims of tornados that struck northeastern Iowa last month. Red Cross in New Dispute Over Disaster Relief Funds. Isn't that what we expect of the American Red Cross?

In recent years, the media has portrayed the Red Cross as a disorganized and ineffective bureaucracy. Red Cross officials must...

AN ALTERNATIVE HYPOTHESIS ABOUT THE AMERICAN RED CROSS’ $200 MILLION DEFICIT

DATELINE: January 16, 2008, Chicago

The American Red Cross just can't seem to catch a break. The opening paragraph of today's article by New York Times reporter Stephanie Strom reports that the American Red Cross is facing a $200 million operating deficit. Short on Fund-Raising, Red Cross Will Cut Jobs. This could lead to the layoff of up to 1,000 employees in the national office, according to Strom, which amounts to a one-third reduction in headquarters staff. There is also talk of reducing regional management. This will be a surprise to staff, but it should not be that much of a surprise. Prior to his forced departure last November, former-Red Cross president and CEO Mark Everson had apparently talked of a 20% reduction in staff.

One thing is for sure: Those who have argued...

NO BOARD FAILURE AT THE AMERICAN RED CROSS: THE EXPERTS ARE WRONG

Mississippi Queen, If you know what I mean
Mississippi Queen, She taught me everything
Way down around Vicksburg, Around Louisiana way
Lived a cajun lady, Aboard the Mississippi Queen….

While the rest of them dudes were'a gettin' their kicks,
Boy I beg your pardon, I was getting mine

Mountain, Mississippi Queen

We never much liked Mountain and we certainly hadn't thought about this FM nugget since high school. Thanks to today's New York Post, the opening guitar riff and raspy-voiced lyrics will be cycling through our head all day. Geoff Earle, Axed Red Cross Chief Had Mississippi Queen, Nov. 29, 2007. It'll take repeated listening to the Foundation's Build Me Up Buttercup to get it out of our heads. The headline's reference is to the Red Cross employee who now-former Red Cross CEO Mark Everson reportedly had an affair that may have reportedly resulted in a pregnancy--the woman is reportedly married so paternity is an obvious issue.  The more conservative N.Y. Times took a far more intellectual approach to the story in its second day coverage. Times reporter Stephanie Strom filled her story...

ACCIDENTS WILL HAPPEN, BUT THIS IS NO DISASTER

DATELINE: November 28, 2007, Chicago

The big news yesterday was the resignation of Red Cross CEO Mark Everson after just six months on the job. We received four e-mails alerting us to that news during the afternoon. Our reaction:...

CALIFORNIA ATTORNEY GENERAL ENTERS INTO A SETTLEMENT AGREEMENT WITH THE AMERICAN RED CROSS: PUZZLING, BUT VERY INTERESTING

Dateline: January 22, 2007, Chicago--GO BEARS

Now-former California Attorney General Bill Lockyer announced late last year (December 27, 2006) that he had entered into an agreement with the American Red Cross (ARC) over its Donor Direct program and the way the ARC determines executive compensation.  In the past we have defended the ARC against certain attacks made by the media and elected officials, but even we are beginning to wonder:  This is a major charitable organization with hundreds of millions of dollars flowing through its coffers.  Why...

DONOR DIRECT IS MEANINGLESS IF ALLEGATIONS OF EMBEZZLEMENT AT AMERICAN RED CROSS ARE TRUE

Dateline: January 19, 2007, Chicago

In the wake of criticism following how it handled funds it received from the public in response to 9/11, the American Red Cross adopted a program called donor direct.  This program was designed to allow donors to specify how they wanted their contributions to the American Red Cross utilized.  Following a much-publicized disaster, a donor could direct his contribution to aid those directly impacted by the disaster or to the Red Cross’ general fund.  This is truth-in-solicitation and the program has some merit, although it is open to some criticism which we have previously detailed.

Donor direct, however, is nothing but a joke...

SIX HURRICANE SEASONS WILL COME AND GO BEFORE THE AMERICAN RED CROSS IS READY TO GOVERN ITSELF: UNACCEPTABLE

Yesterday was the big day.  The American Red Cross began the rollout of its new governance structure, with a more formal plan to arrive this Thursday.  You know there is a problem when...

THE AMERICAN RED CROSS HAS A PROBLEM, BUT NOT THE ONE EVERYONE IS FOCUSED ON: MANAGING ITS OWN CRISIS

The American Red Cross came under a barrage of criticism last week regarding its stewardship of resources used in connection with its Hurricane Katrina relief operations.  New York Times reporter Stephanie Strom fronted the Friday, March 24, 2006 edition with an article entitled Red Cross Sifting Internal Charges Over Katrina Relief.  The accusations in question include “improper diversion of relief supplies, failure to follow required Red Cross procedures in tracking and distributing supplies, and use of felons as volunteers in the disaster area in violation of Red Cross rules.”  Strom reported that interviews with over a dozen volunteers suggested that the Red Cross had “virtually no...

WASHINGTON POST TAKES A CHEAP SHOT AT RED CROSS: NONPROFIT DOESN’T MEAN FOR FREE

To many people believe that as nonprofits, charities are not suppose to be run in a business-like manner.  Nothing could be further from the truth.  The net income may not be payable to shareholders, but if a charity is to survive, it ultimately must take in at least as much as it pays out.  That is why yesterday’s article in the Washington Post by Jacqueline Salmon and Gilbert Gaul, Red Cross Spend $500,000 in 3 Years to Boost Its Profile: Consultant Paid to Lure Stars, Showcase CEO to Help Raise Funds, was so misguided in its focus.  Quite frankly,

SENATOR GRASSLEY GETS WHAT HE WANTS: RED CROSS DISGORGES THOUSANDS OF PAGES OF INFORMATION

The American Red Cross may not have been transparent before Senator Grassley made his recent request for information, but it is now.  The Senator posted the Red Cross’ response to his request on the Senate Finance Committee Web site today, apparently in anticipation of a roundtable between an august body of nonprofit experts and committee staffers scheduled for this Friday (March 3, 2006). 

There is already one lesson for all you confidentiality fanatics out there: