What Ails the Red Cross Looks Like a Perfect Storm of the Very Familiar

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December 14, 2015; ProPublica

For the past few years, NPR and ProPublica have been conducting an investigative series on the American Red Cross. Their articles have charged that the organization has been slow to respond to major disasters such as Hurricane Sandy, that the Red Cross’s claims of what it has produced and spent on Haiti’s recovery don’t match up with what the evidence shows, and that it has suffered from a general lack of organization, competence, and collaboration in the field. They have also charged that the organization has been consistently unwilling to answer reporters’ questions.

The Red Cross’s alleged lack of responsiveness has caught the attention of Senator Chuck Grassley (R-IA), who pointed out in July that the organization is congressionally chartered and if it does not want to answer reporters’ questions, it would have to answer his.

The latest article in the series pointedly lays the organization’s problems at the feet of American Red Cross President and CEO Gail McGovern. But many of the organization’s woes may seem generally familiar to NPQ readers, though on a massive scale and with enormous potential consequences. Some of the charges include:

  • The Red Cross overestimates the wonders of corporate leadership when it follows the mantra “nonprofits should act more like business,” by not only hiring a CEO straight out of the corporate world, but then by allowing the CEO to hire other refugees from her corporate life at AT&T. Here is another good example of the results of such magical thinking.
  • In the Red Cross’s attempt to consolidate many chapters into fewer chapters, it may have become more cost effective and efficient but it also relieved long-time local leaders of their organizing roles and robbed the organization of deep local roots, which were crucial for raising money and volunteers. Such consolidation appears to be the fad in federations with local chapters, and it can particularly victimize rural areas, as this article indicates may be the case with the Red Cross. The same strategy has been used by other chapter-based organizations such as the Girl Scouts, which experienced a revolt complete with lawsuits when it pursued the same type of consolidation. Another local revolt, this time against Easter Seals withdrawing from a rural area, was documented here. NPQ raised a particular concern about the consolidation at the Red Cross as far back as 2011 because the lack of a body of locally organized volunteers in remote areas appeared to be a real yet unintended outcome of the strategy.
  • The Red Cross’s Blood operations have been consuming enormous amounts of time and effort, and it may be that a separation should finally be sought. The organization now faces more competition and has been struggling mightily with compliance and other management concerns. We have recently documented other cases where social enterprise have swallowed the sponsoring nonprofit whole, arguably destroying the whole in service of the social enterprise.
  • The Red Cross suffers from the perception that its strong brand, authoritative posture, and connections to powerful people can save the Board and staff leadership from the concerns of its stakeholders. The new ProPublica article makes the case that a significant portion of the Red Cross’ staff, volunteers, and community stakeholders are unhappy with the organization’s performance.

As we have seen before in the cases of Susan G. Komen and Sweet Briar College among others, real change may yet be forced when the people who are invested in the Red Cross’s mission demand that the organization’s leadership reflect the values of the organization, and perhaps even agitate for new leadership.

Perhaps it’s time for McGovern to step aside, along with some of the board members with whom she is reputed to be very close.— Ruth McCambridge