Thursday, October 30, 2014

American Red Cross Again In Serious Trouble

by Gary Snyder

A lengthy joint report published this week by ProPublica and NPR finds that the Red Cross completely failed many of its rescue efforts during Hurricanes Isaac and Sandy in 2012.
ARC tried to cover up foul up after foul up. Some of the overt mistakes included allegations that 1) diverted (see internal report) 80 nearly empty trucks that should’ve contained food were told to drive around to “look like you're giving disaster relief” so that the agency would impress Red Cross “brass” in the area; 2) the caterer couldn’t produce lunches and dinners so Red Cross volunteers had to distribute cold leftovers; 3) used an emergency response vehicle and staff for a photo-op for 5 hours; 4) shelters were not properly staffed, materials and food resources; 5) more

Two weeks after Sandy hit, Red Cross Chief Executive Gail McGovern declared that the group’s relief efforts had been “near flawless.” The group’s self-assessments, drawn together just weeks later, were far less congratulatory.
The charity, nevertheless, ultimately raised $312 million to help Sandy victims. (ProPublica has raised questions about the opacity of Red Cross disclosures on how this money was spent.)

There is a long a rich history of poor leadership, misappropriations, political intervention and questionable representation of the operations of the organization. 

Although blood-compliance problems are seldom in the forefront for the public, decades of Red Cross problems include unsuccessful attempts to improve its blood-collection program to meet government safety standards. After a Federal Drug Administration Consent Decree the agency, ARC continues to be cited by the U.S. Federal Drug Administration for failure to take precautions to assure the safety of the blood donations. This failure has resulted in huge fines amounting in tens of millions of dollars. In 2010 alone, federal health regulators fined the American Red Cross $16 million for sloppy screening of donated blood.

There are several reasons for years of lax governmental oversight by Congress. The Red Cross was created under a special Congressional charter. The President of the United States, who is honorary president of the organization, appoints eight members of its board of governors. This relationship has caused significant problems in several of the Red Cross administrations. The American Red Cross was essentially pardoned from its misdeeds. In the past, it was bailed out with a $100 million no-strings attached tax-payer funded bonus to cover a shortfall.

Leadership has been a serious problem. The current president is the seventh CEO in as many years, counting the interim heads.

The boards and administrations have taken so little action about the problems that the American National Red Cross Modernization Act of 2007 (Pub. Law 110-26), a bill to strengthen the governance structure of the American Red Cross, was signed into law to provide to provide the first major overhaul of the organization since its 1947 congressional charter.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News,, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter,, CORP! Magazine, Crain’s Michigan Nonprofit,, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner,, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today,, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization),, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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