This action might not be possible to undo. Are you sure you want to continue?
As Marsha "Marty" Johnson Evans American Red Cross on August 5, with the challenge of restoring the . . During the past 24 of negative
Disaster Services. ~~lpingOthers:Weareattentive and responsive tothose we serve.000 hospitals with about half of the blood used in the United States. Source: American Red Cross. mental health counseling. being guided solely by their needs. and lasting peace amongst all peoples. www. cooperation. racial.found. Community Services.ievethe suffering of individuals.redcross. The American Red Cross supplies 3.The National Societies.allhandto ensure respectforthe human being.Itmust carryon its humanitarian work throughout its territory. obtain."_--'-" f)(hibit 1 Principles ofIntemational Red Cross • • • • • • • Hurilanity:ThelnternationalBed Cross and Red Crescent Movement. to identify.~utrality: In order to continue to enjoy the confidence of all. and efficiently with resources entrusted to us. "~. in excess of 6 million pints of blood. living well programs.en~. the Movementmay not fake sides in or engage atany time in controversies of a political.org.volunteeJs.andappreciation. providing fer victims of disasters andh_elpingpeople prevent. Source:www. and to give priority to to lT1?sturgentcases of distress.esin.III~tal'Y. Itmust be opento all. effectively. class.~~irit:Asafamilvofdonors. food and nutrition information.respect. Each year 83. ~~spect: Vv. It promotes mutual understanding.org.eacknowledge. while auxiliari.the. HIV/AIDS education. race. Swimming and lifeguard classes. and without discrimination. or ideological nature. Stevvardship: We act respgnsibly. and so on. born of a desire tobring assistance IN. in which all Societies have equal status and share equal responsibilities and duties in helping eachother. demonstrate courage and accountability under pressure. must allNaysmaintain their autonomy so that they may be able atall times to act in accordance with the principles of the Movement. and so forth. transportation. Health and Safety Services. endeavors. seniors. religious. . inits internati. Educational services to prepare for disasters. Its purpose is to protect life and he. friendship.independently. 1111~f)~if)lity:ltrnakesno discrimination asto nationality. prepare for. 9~nti. and respond to emergencies. andstaff we search for ways to provide hope to servewhileidemonstratingcompassion. financial assistance.countries. Help for the homeless.religious beliefs. Voluntary Service:ltis a voluntary relief movement not prompted in any manner by desireJorgain.ithoutdiscrimination to the wounded on the battlefield. Int~grity:Weact with honesty.eavors rel.redcross. > Ej(hibit 2 Values of the American Red Cross • • • • • • • Humanitarianism: We existto serve others in need.onal. shelter. and maintain competencies andthe.~ndnational capacity. awareness required for exceptional service. hUIllanitari an services of their governments and subject tothe laws of theirrespective. collectively and individually.to prevent and alleviate human suffering WQereit may be. ". and openly share ideas and i_nformationwith each other.l1lJou~lea. In~ependence: The Movement isindependent. and support the rights and diversity of each person in our organization a?dinthecommunities we serve. always tpimprove.000 volunteers help disaster victims by providing food. e72 Case 11:: American Red Cross .rning:We seek.orpoliticafopinions. and youth.is worldwide. always listening totlieirneeds and lookingforways to serve through existing or new initiatives.generosity. Universality: The International Hed Cross and Red Crescent Movement. Unity: There can be only one Red Cross or one Red Crescent Society in anyone country.
" a service that enables blood drive sponsors to use their intranets to recruit donors and allows hospital customers to order blood products online. and distributing blood and tissue. Biomedical services: Facility maintenance. It is now possible to make these courses available online." a nationwide disaster simulation to help prepare for acts of terrorism. In 2000 it launched "iGiveLife. indicated that "If every American near a Coinstar machine would donate a handful • • Disaster costs: Assistance to victims. Recruiting and organizing volunteers. The Red Cross is able to provide long-term aid and education to those in need.• and so forth. keep up with breaking news. testing. Nursing."!' About 12 million Americans enroll in Red Cross courses each year. Three main funding sources for the American Red Cross were:" • • Contributions: Fund-raising efforts by the United Way & Combined Federal Campaign.000 hospitals with blood donations.. and obtain information about donating and volunteering. Total operating revenues for fiscal year 2000-2001 were $2. and tissue services. and young adults. legacies. Youth Involvement. Emergency disaster response. administer funds. The Red Cross has routinely published the latest public health information. materials. vice president of Disaster Services at the American Red Cross. plasma. For Cindee Archer. expenses in blood. and diarrhea in poor countries and to support primary health care. Each year more than 12 million Americans take advantage of lifesaving courses offered by the Red Cross. The Web site helps visitors locate local Red Cross shelters. International Services. Coinstar machines were located within two miles of 130 million Americans.570 billion (see Exhibits 3. Helping kids. staff expenses at disaster sites. In addition. In 1999 the American Red Cross joined the Federal Emergency Management Agency for "TOPOFF. Total operating expenses for the fiscal year 2001-2002 were $3. find relatives in a disaster area. strengthen public health. D. Consumers could drop loose change into the Coinstar machines located in local supermarkets. In the near future. and so on. Massachusetts General Hospital and the American Red Cross jointly own a patent for a protein associated with the underlying cause of Alzheimer's disease. the Internet serves as a vital source of information to the American public and as a new way to collect donations. to collect Red Cross donations for disaster relief efforts. and improve response time to local disasters. and courses. Investment income and other income: Investment income from endowments and reserve funds and income from contracts to provide various programs. fees from collecting.712 billion. teens. Jane Delano Society. Archer stated. there were costs associated with a Web site that many nonprofit groups did not realize. grants.1 Technology and Operations Technology has helped the American Red Cross better coordinate its efforts among its 1. and the use of new technology will make this information available online. It works with the World Health Organization to alleviate malnutrition.743 billion. and so on. and major expenses included:" can Red Cross in Washington. lack of pure water. feeding programs. Cindy Archer also believed that "more and more people are coming onlinethis isn't going to go away. Geneva Conventions. Red Cross delegates help local citizens rebuild infrastructure.. Volunteering."? Archer worked on developing a Web site where visitors could enter a zip code and quickly find information. director of outreach at Action Without Borders has stated.v'? However.117 billion.400 chapters and to expand its reach across America. online media manager for the Ameri- . the American Red Cross supplies over 3. The communication network allows it to locate family members during crises more efficiently. Wireless communication allows the American Red Cross to make faster damage assessment at the scene. Also. Products and services: Fees for products. These "click" sites appeal to a newer and often younger audience for the nonprofits. A donation to the World Hemophilia Foundation of plasma product is used to treat hemophilia. other monetary and in-kind contributions. 4. Funding disaster services: Expenses to solicit donations. 8 The Internet provides information about nonprofit organizations and can provide "click-to-donate" sites for those individuals who are willing to help out with contributions while they are online. Financial Overview In fiscal year 2001-2002 the American Red Cross had operating revenues of $4. it's only going to get more pervasive. primary health care programs. As a result of recent research and development. Russ Finkelstein.P Strategic Alliances The American Red Cross has established a number of alliances with other organizations. You feel this sense of urgency whenever there's a disaster-e-you want that information up as quickly as you can get it. it may be possible for the American Red Cross to offer an online shopping network to generate additional resources. and 5). and it's not necessarily that. "The Internet has definitely changed how the whole organization thinks. John Clizbe. 13 In February 2001 the American Red Cross teamed up with Coinstar. Total operating expenses for the 2000-2001 fiscal year were $2.C. "Some of them think this is going to be a kind of panacea for doing fund-raising. Inc. and so forth. Student nurses.
680 (-'elnsieln and postretirement liabilities benefits 357.623 936.894 18.149 287.258 110.514 15. $2._ ~jhibit 3 (ill thousands) Consolidated Statement of Financial Position.604 in 2002 and $19.626 1.029.421 1.654 183 29.374 203.569 11.272 $3.lles.92 22. Annual Report..385 6.556 379.543 16.500 771.453 296.750 in 2002 and $6..619 $771.545 34..570 15.544 155.0. net of allowance for obsolescence of $7. June 30.587 mitl11ents and contingencies L.301 in 2001: Trade Contributions.243 15.385 American. •.'c· _~.704 380.293 63 63 23.164.674 28.066 $380.247 309.602.092 20 83 380.653 366.103 56 15.209 39.402 3.575.374.525. 9.162 585.894 18.386 12.437.050 $ 1.662 39.924 liabilities 20.924 2.293 3.784 in 2001 Other assets Total current assets Investments Contributions receivable Prepaid pension costs Land.57. net 304.149 2.801 126.209 823.892 1.823 950.633 4.089 2. 2002.137 liabilities and netassets Cross. 2002 (with summarized information as of June 30.238 2.180 13. current portion Other Inventories.826 823.042 93.buildings..626 1.374.541 35.252 12.798 1.840 12.964 325.453 120.042 92.525.411 $439.541 11.547 986.453 120.036 357.Red .473 7...913 548. 2001) $146. and other property..913 Receival.825 197.825 319.354 2. net of allowance for doubtful accounts of $19.
466.5.742.614 152.058 150.222 67~175 36.822 1.848 136.175 81.726 263.289' 1.901 174.405 40.844 2.034 21.351 230.117.924.876) 2.736 3.960 1.745 96.208 $2.872.18 22.089 1.960 108.394 49. response Biomedical services Health and safety services Community services International services program services Supporting services: Fund raising Management and general 61.970 337.570.083 3.238 2.182 311.712.619 22.083 3.236 213.727 115.164.736 3.008 (1.437.699.069 2.077 137.488 58.410) 420. 2002 (with summarized information for the year ended 30.594 49.016 22.156 617.195) 411. 2002.060 6.549 84.2001) (in thousands) $ 205.448.906 61.077 136.090 121)24 50.330 (135.201 (31.035.960 1.164.931 61.604 (63.108 45.980 360.272 65.066 546.118 22.756 284.302 30.967 213.845 1.035.582 58.967 213.518 (548) 419.137 in net assets from operations gains (losses) effect of accounting change in net assets beginning of year end of year Red Cross.410 3.463 51.900) (28. Annual Report.848 136.872.727 (2. Year ended June 30.649 $ 757.513 308.402 $1.022 705 Armed Forces Emergency Services Disaster services liberty disaster relief-Sept.135 2.182 311.085 (131.924.614 152.931 420.575.259.686.137 $2.915 906 1.815) 1.902 32.071 ) 2.747) 19.601 989.261 1.195.674.616 154.156 11 617.728 76.901 174. 103.587 .171 81.086 $380.342 2.4 Consolidated Statement of Activities.902 32.171 82.978 203.097 4.513 308.570.259.
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We have been in full compliance with the law. We just want them to play by the rules that are reasonable and fair and compete on a level playing field. said." In January 2001 a California blood supplier filed an antitrust suit against the American Red Cross claiming the organization used its clout to eliminate competitors. the Red Cross had collected $202 million in donations. their families. HemaCare's chief executive officer. In the lawsuit. and meals for volunteers and staff working on-site. and will explore efforts in joint training exercises. and we will vigorously defend this lawsuit. thousands of blood donations. and increasing health benefit costs. and creative displays in stores across the country. Funds were used for travel. frequent schedule changes. Right now we are just trying to keep up with responses/'" Goldburg stated that the entire amount raised by the Red Cross since the disaster would go into the newly created Liberty Fund. and help from a myriad of volunteers contributed to Red Cross efforts to provide aid to survivors. HemaCare Corp. and Liberty Disaster Relief Fund After the terrorist attacks on September 11. platelets) below production costs to drive out competitors while it charged higher prices for the same products in markets where there is no competition.2001. In providing more than half the nation's blood. which prohibits monopolization. the plaintiffs alleged the Red Cross violated Section 2 of the Sherman Antitrust Act. and blue M&Ms specifically to benefit the Red Cross."20 Recent Problems Events between 2000 and 2002 provided the American Red Cross with a number of challenges. "We believe that's unfair and illegal. the American Red Cross rose to the challenge of providing the most extensive relief operation in its 120-year history. and transportation were provided to families of missing foreign nationals.. In August 2001 the American Red Cross and the American Society of Association Executives (ASAE) signed an agreement under which the two organizations will share data regarding disasters. unfair trade practices. the Red Cross created the Liberty Disaster Relief Fund to be used exclusively to meet the needs of people directly affected by the September 11 tragedy. In January 2002 Masterfoods USA presented a check to the Red Cross in the amount of$3. Pennsylvania. the American Red Cross released a spending plan for the first $300 million in the Liberty Fund.'? Unfair Trade Practices Lawsuit The Red Cross derived 60 percent of its revenues from the sale of blood. If all Americans donate the change in their wallet or pocket."? Blythe Kubina. the Red Cross had annual sales of more than $1. declarations. and other items to relief workers and volunteers. Within 15 days of the September 11. radio and newspapers.' stated Skip Seitz. The national campaign theme used for this promotion was "Taking Care of America Everyday. "Everything is happening at such a fast pace. and other services to victims' families and others affected. 2001. It is with great humility and pride that we carry out this noble obligation/'P On October 12. those handfuls will make a huge difference in our capacity to help others thisyear. a Red Cross spokesperson. American Red Cross Growth and Integrated Development. and relief workers. Because of the large dollar amount of donations from the American people. Worker Strike In June 2000 Red Cross workers who collected blood donations and delivered them to hospitals went on strike after rejecting a contract offer by the American Red Cross. based on Healy'S policy of using donations for a "long period of C78 Case 11:: Amer lean Red Cr ass . stated. "You no longer need a credit card or checkbook to provide financial support to those in need. 15 One hundred percent of all profits from the sales of these M&Ms were donated to the American Red Cross Disaster Relief Fund. created a special package of red. the president and chief executive officer of the Red Cross. The Red Cross is a fine organization. sleeping quarters. and we must respond in an extraordinary way. William Nicely. victims' families. the Red Cross would be that much better prepared to respond to disaster immediately. financial assistance. a Mars Incorporated Company. food. or rescue workers. counseling. Less than 50 percent of the money raised was targeted for victims. In response to the tragedy. child care. senior vice president." unfair competition under the California Business and Professional Code. the Red Cross set up family assistance centers to provide counseling. stated. She indicated that organization officials earmarked $100 million from the fund to provide short-term financial assistance to families of victims. MD. and Coral Blood Services alleged the Red Cross had cost them more than $25 million in lost business.g. a Red Cross spokeswoman. The ASAE provides the Red Cross with demographic information about associations and assistance with identifying organizations they wish to contact during times of need.P This planned distribution of funds. Somerset County. the new M&Ms' captured the heart of America. COO of Coinstar."!" Masterfoods USA. Deborah Goldburg. The workers were unhappy about long hours. The lawsuit also charged tortuous interference. Respite centers were set up in New York City. Financial assistance. The American Red Cross has a heavy burden-to live up to the inspiration and memory of those lost." "Through appearances on television. said in a written statement. The remainder was earmarked to help the Red Cross improve its own organization and expand into new aid programs that might be needed in the event of future terrorist attacks. Millions of dollars. said in a written statement.3 billion. "What has taken place is extraordinary. lodging.5 million. and changes in legislation." Rich Stillman. white. and at the Pentagon to provide meals. attack. Bernadine Healy.of change on their next supermarket visit. They further alleged that the American Red Cross priced some blood products (e. "We believe the American Red Cross has done nothing inappropriate regarding HemaCare's claims to unfair business practices and we were surprised by this lawsuit.
interim CEO and president of the Red Cross. announced changes adopted by the American Red Cross Board of Governors to meet the immediate and long-term needs of people affected by the September 11 terrorist attacks. interim president. Deborah Daley reported. CFO of the Red Cross. It appears to have contained some inaccuracies concerning floods. it took us too long to hear their message. made some unsupported public statements regarding the Red Cross that were reported in the Philadelphia Inquirer. claiming that the organization's board had pushed her OUt.org Web site. The Red Cross does regular audits of chapters. "As oflast week."?" In an article in U. Regrettably. and the financial accountability of Red Cross chapters. "I had no choice." Healy finally responded with her announcement of retirement. Art Taylor.P In a congressional hearing. 2002. .000families of displaced workers and disaster workers Provision for 14million meals. The largest 126 chapters must send quarterly financial reports to the national Red Cross." In response. David McLaughlin stated. "Donors charged the organization with abuse of their good intentions. "Outside audits of local Red Cross chapters are rare. Wallace reported. Given the recent activities of the American Red Cross.26 On November 14. "They also decided to put a disclaimer in their ads saying that donations will be used for this and other disasters.000 in annual expenses must have an external audit conducted by an independent CPA. David McLaughlin stated.'! BBB Wise Giving Alliance On February 16.P? On March 7. David T. a spokesperson for the Red Cross. sent a letter to CBS News indicating the errors and an explanation. The attorney general of New York State threatened legal action.org" Web site. In a comment about advertising practices. announced that the American Red Cross received $930 million in contributions and this money was used to provide the following. In his letter Decker requested a public retraction of Taylor's statements and that the Better Business Bureau's current report on the Red Cross be restored to the give. and extend the use of toll-free telephone lines. fires.000people $169 270 94 3. and Bennett Weiner. participate in a database to be shared among relief agencies. the American public donated blood for the disaster victims. Harold Decker. 2001.S."28 In addition to donating money. "In the West Virginia flood ad. News & World Report.althservices for 232. Chapters must meet specific national guidelines to maintain their charters. 2. the American Red Cross saluted the staff and volunteers who provided assistance to the more than 54.assistanceto 3. we can save a life" public service announcement. These donations were given in response to Healy'S "Together. their trust. "Today we are recognizing the work of our staff. chairman of the American Red Cross Board of Governors. She stated that Wallace's claim that chapters "are not even required to submit financial reports" is completely false." she said. McLaughlin. Chapters that have over $100.i" The donors blasted Healy because they expected their donations to be helping September 11 disaster victims now." Harold Decker.'dE)ceasedand seriously injured .~ssistanceto 51.32 Another onslaught of negative publicity for the American Red Cross occurred March 10. we will never have public truSt. mental he. the "this and other disasters" language appears in the same font and size as the rest of the body copy appealing for support. agreed to a March 30 deadline for the updated report. All chapters must have an independent annual review. Mike Wallace reported. H. volunteers. "If we don't subject ourselves to public scrutiny. president of the alliance. it's in small print. In addition. Healy was confronted with allegations of "panicking the public into wasteful donations of blood.P 60 Minutes Program 1. The Red Cross would provide increased financial support to families.." The Lancet reported. and very clear direction for our September 11 relief effort. hire an additiona1200 caseworkers. A letter from Harold Decker to the Wise Giving Alliance explained that a request by the alliance for an updated report from the Red Cross was received in January 2002. In fact. 14 months after the fire. COO of the alliance. there is so little accountability that local chapters-and there are more than one thousand of them-aren't even required to submit financial reports to Red Cross headquarters in Washington. "The people of this country have given the Red Cross their hard-earned dollars. The trouble is. stated.500 families affected by the attacks. Deborah Daley. 2002. it was determined that such a report could not be provided by the due date." Deborah Daley responded that chapters are accountable in a number of ways." caused a huge uproar. the Better Business Bureau Wise Giving Alliance removed the American Red Cross from its "give.uncertainty and recovery. on the CBS news show 60 Minutes. and health services for 129. $ millions gir~Gt. Jack Campbell. Experts questioned the wisdom of calling for blood donations when there were very few blood recipients. and donors who responded to September 11th. Wallace reported.266families of . As for the Alpine fire in Southern California. allegedly because the American Red Cross did not provide a timely report to the alliance. 2002. By November 2001 about 10 percent of the red blood cells collected on September 11 and 12 had expired.000people.
Tyrangiel. Marsha Johnson Evans must confront the many issues faced by the American Red Cross. 21. 32. Tyrangiel.S. American Red Cross. www. 20. Ibid. Red Red Red Red Red Cross. The charity olympics: After weeks of record giving. 11. 33. The timely and capable response day-in and day-out to these disasters speaks volumes about the character of the volunteers and staff. 8. January 1: 20.San Diego was still waiting for a full accounting of how the money donated for the fire victims has been and will be spent. Charity olympics. Annual Cross. November 14. where she earned the rank of rear admiral. 34.000 in the months since last September. 2000. 22(25): 37. 24. Annual Report. 9. Press release. 2000. my observation is that the Red Cross never lost sight of its responsibility to every community and every victim of the other disasters that occurred. American Red Cross. American 3. How should she proceed? Endnotes 1. Ibid. 2001. 2001. Annual Report. Ibid. Taylor. 12. Marsha. Blood. and most especially their dedication. 2002. 15. November 5: 75. Taylor. 26. Ibid. 28. 31(4): 33. Levine. Mark. 35. Reports. and the American Red Cross. Association Management. politics. Modern Healthcare 31. Press release. Tyrangiel. politics. Stephanie. 2002. 200 I. American Red Cross and Coinstar to launch new fundraising technology to prepare for disasters. June 27. Evans has served as national executive director of the Girl Scouts of the USA for the past four years. Newsweek: Former Red Cross head says her fundraising message was clear . their talent. U. Josh. November 19. Red Crossroads. and the American Red Cross. Ibid. 2002. Infoworld. Becker. Cross. Looking to the Future After a five-month search. 2000. February 12. Greenberg. Red Cross faces antitrust lawsuit. American Red Cross. February 1. 2001. she is well poised to guide our organization as we continue to provide vital services in a world faced by new challenges. prior to which she had a 29-year career in the U. Ibid. Navy. February 16. said. November 24: 1789. February 1.. 7. Cross. Ibid. Americans want to know: Is that money helping? Time. Press release. 2000-2001. 31. 29. Greenberg. Blood. 14. Red Cross announces major changes in Liberty Fund: Fund solely used for people affected by September 11 tragedy."?" Evans remarked that: In the midst of responding to the extraordinary demands of 9/11 and a lot of criticism about these efforts.org. American Red Cross. Red Cross announces major changes in Liberty Fund. Blood. charities wrestle with how best to spend money pouring in since attacks. Reports. 2001. 30. 25. 2000. "Marty's unique style of leadership along with her experience as established administrator will bring new vigor to the American Red Cross. PR Newswire. Cross. Cinda. Red Cross faces antitrust lawsuit. 2002. Press release. 2001. American Red Cross. 2001. American 2. 17. US Newswire. politics. Daniel S. Samantha. 18. chairman of the Board of Governors of the American Red Cross. Greenberg. Fund Raising Management. March 7.. American 6. American 5. but there are costs. 2001. Charity olympics. Modern Healthcare 31. 2002. Nonprofits reap rewards of the Web-Internet proves to be a great fund-raising tool for charities.S. 13. October 1: 8. Lancet. C80 Case 11:: American Red CI ass ." As she begins to guide the organization. Ibid. 16. ASAE and American Red Cross formalize partnership agreement. 10. 53(8): 12. 19. 23. 27. 22. Annual June 27. With great insight into our mission. 2001-2002. 2001. American Red Cross letter to Better Business Bureau's Wise Giving Alliance. PR Newswire. and the American Red Cross.redcross. David McLaughlin. some 45. 2002. Press release. Johnson Evans was named president and CEO of the American Red Cross on June 27.. Red Cross workers on strike. Sanborn." Deborah Daley responded that the chapter has provided up-to-date financial information on its response to the Alpine fire three times since November. American 4. News & WorldReport. A torrent of donations. December 9. In his announcement. US Newswire. 2002.
This action might not be possible to undo. Are you sure you want to continue?