A Real Story in the Midst of Red Cross Shrinking Ranks and Chapters

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November 28, 2011; Source: Boston Globe (Associated Press)Over the past five years, the Red Cross has shrunk its chapters from 800 to 600, or a full 25 percent. It has also, since this summer, laid off 1,500 people. Eliminated were 1,000 positions at local and regional chapters, approximately 170 positions at its Washington headquarters, and 400 out of

20,000 positions were eliminated specifically in the biomedical and blood services division. Additionally, the central organization has taken control of local fundraising “so that all funds can be spent as strategically as possible.” (This frankly leaves us confused about whether they have taken control of fundraising or spending or both.)

These changes have not necessarily gone down well in all locations. From the Boston Globe:

“Plans to downgrade the century old Greater Nebraska Panhandle Chapter into a service center prompted volunteer board members to resign in protest, and its executive director was fired and escorted from the chapter’s office in tears.

The upheaval began with an emailed memo in July, according to Rick Tuggle, a Scottsbluff banker and chairman of the chapter’s board. The panhandle chapter—which served 11 counties over 14,000 square miles—was told it would be folded into a neighboring Nebraska chapter, Central Plains, with the local board ceding authority over how the money it raised would be spent. Before Tuggle became chairman, almost four years ago, the chapter was floundering financially. He recruited doggedly for volunteers, boosting the volunteer board from 2 to 13 members and helping to hire a new executive director.

“About the time . . . we were celebrating our victories as a chapter, after three years of operation in the black, we get the letter from regional that says, ‘Oh, guess what? You’re not a chapter anymore,'” said Tuggle, who quickly wrote to McGovern, pleading for reconsideration.

Shortly thereafter, the Panhandle group was informed it could remain a chapter in name, but oversight would still go to Central Plains. In August, Panhandle board members met with the executive directors of the Central Plains and Omaha-based Heartland chapters, who said national officials would decide how money they raised would be spent.

By the end of the meeting, six board members had resigned. Some donors then withheld donations, including a $20,000 pledge, rescinded by the local United Way. Next, the executive directors removed Panhandle director Jann Rouzee, and escorted her from the building.

Scottsbluff’s daily newspaper, the Star-Herald, took the side of the local board members in an editorial, saying the higher-ups from afar pushed through the changes “in a bumbling fashion that led to negative publicity and a loss of local support.”

The Red Cross is, of course, not the only federation shrinking its chapters at this point, and NPQ has watched these processes carefully, reviewed in this article prompted by an Easter Seals merger in Humboldt County, California. Our concerns are pretty much highlighted by the story above. What happens to local support and responsiveness when you take away local control and a robust local presence? Can locals really end up feeling that they “own” regional chapters the same way that they did local chapters? What effect will these consolidations have on local communities?—Ruth McCambridge

  • Amy

    Big government spills over into big nonprofits with national headquarters negating the power of local communities to manage their own affairs. What the ivory tower folks fail to recognize is that donors to local chapters have the relationship to their local chapters–not national headquarters. Expect support to continue to decline except in response to major disasters if the Red Cross continues in this vein. If the local chapter is smart, they’ll start their own nonprofit organization that provides support to a self-defined region so that they can regain control of their own fate.

  • Linda Civitello

    Consider other charities that have consolidated — and ask — are they really doing any local services anymore? Fundraising continues at the local level — but is there any local service? :sigh: I support Red Cross when there is need for disaster relief in other US locations and other countries — but also want to know that my local chapter, that knows my community – is ready to respond to local needs as they arise. My heart goes out to the Nebraska folks who turned their local chapter around — and then were shown the door.