What’s Best for the American Red Cross: Being among the Public, or Marketing to Them?

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December 24, 2015; ProPublica

The potential effect of restructuring or consolidating the Red Cross chapter system is one of the issues queried in a six-page letter sent to the Red Cross of America’s CEO Gail McGovern by Rep. Bennie Thompson (D-MS) immediately before Christmas. Thompson sits on a committee that oversees the American Red Cross.

NPQ, as you may remember, wrote in, “What Ails the Red Cross Looks Like a Perfect Storm of the Very Familiar” that one of the concerns we would have about its current downsizing plan, which entails the closing of local offices, would be the loss of the critical-in-disaster intimacy held by local leadership and volunteers. After Katrina, the scarcity of a local presence in some areas was seen as a fatal flaw in the response, particularly in low-income areas.

The Red Cross is hardly alone in its consolidation strategy. At that time, we wrote:

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 longtime 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.

Thompson’s letter gives the Red Cross a deadline of January 27th to answer a list of questions, including a number relating to how the closure of 450 of 700 local chapters during McGovern’s tenure of seven-plus years might affect the quality of its disaster response. During that period, the Red Cross’s workforce shrunk by more than a third, to around 23,000.

“In light of the chapter closures and staff reductions, what efforts is the Red Cross undertaking to ensure that it can respond to major and small-scale disasters, particularly in small towns and rural areas?” the letter asks.

Thompson also questions how those chapter closures married to what may be an overdependence on arm’s-length, corporate-style “marketing” affected the Red Cross’ ability to raise money and recruit volunteers. The Red Cross has been running deficits in the tens of millions.

While Thompson introduced the American Red Cross Sunshine Act last year, with provisions requiring more regular government audits of the charity’s finances and its response to disasters, Thompson is clearly intending to get some answers now.—Ruth McCambridge