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
~utrality: In order to continue to enjoy the confidence of all. awareness required for exceptional service.allhandto ensure respectforthe human being. and so on. transportation.org.to prevent and alleviate human suffering WQereit may be. and to give priority to to lT1?sturgentcases of distress. obtain.~~irit:Asafamilvofdonors. and maintain competencies andthe. and youth. Itmust be opento all.Itmust carryon its humanitarian work throughout its territory. e72 Case 11:: American Red Cross . Universality: The International Hed Cross and Red Crescent Movement. racial. Int~grity:Weact with honesty.III~tal'Y.l1lJou~lea. shelter. the Movementmay not fake sides in or engage atany time in controversies of a political. providing fer victims of disasters andh_elpingpeople prevent.en~. "~. HIV/AIDS education.eacknowledge.orpoliticafopinions.~ndnational capacity. ". www. in which all Societies have equal status and share equal responsibilities and duties in helping eachother. living well programs.redcross. and support the rights and diversity of each person in our organization a?dinthecommunities we serve. Unity: There can be only one Red Cross or one Red Crescent Society in anyone country. Source:www.eavors rel. Swimming and lifeguard classes. mental health counseling. always listening totlieirneeds and lookingforways to serve through existing or new initiatives.redcross. and lasting peace amongst all peoples.onal. and openly share ideas and i_nformationwith each other. Disaster Services. 1111~f)~if)lity:ltrnakesno discrimination asto nationality. prepare for.is worldwide. and respond to emergencies.000 volunteers help disaster victims by providing food. class.ithoutdiscrimination to the wounded on the battlefield. Source: American Red Cross. being guided solely by their needs.independently. > Ej(hibit 2 Values of the American Red Cross • • • • • • • Humanitarianism: We existto serve others in need. or ideological nature. ~~lpingOthers:Weareattentive and responsive tothose we serve. and so forth. 9~nti. Community Services.religious beliefs. financial assistance. hUIllanitari an services of their governments and subject tothe laws of theirrespective.the.The National Societies. friendship."_--'-" f)(hibit 1 Principles ofIntemational Red Cross • • • • • • • Hurilanity:ThelnternationalBed Cross and Red Crescent Movement. to identify. Each year 83.rning:We seek. born of a desire tobring assistance IN.org. endeavors. collectively and individually. race. andstaff we search for ways to provide hope to servewhileidemonstratingcompassion.ievethe suffering of individuals.found. It promotes mutual understanding.respect.andappreciation.000 hospitals with about half of the blood used in the United States.esin. and without discrimination. and efficiently with resources entrusted to us. effectively. In~ependence: The Movement isindependent.volunteeJs. ~~spect: Vv. cooperation. seniors. Voluntary Service:ltis a voluntary relief movement not prompted in any manner by desireJorgain. Educational services to prepare for disasters. demonstrate courage and accountability under pressure. inits internati. food and nutrition information. Its purpose is to protect life and he.generosity. Help for the homeless. must allNaysmaintain their autonomy so that they may be able atall times to act in accordance with the principles of the Movement. always tpimprove.countries. Health and Safety Services. Stevvardship: We act respgnsibly. religious. while auxiliari. in excess of 6 million pints of blood. The American Red Cross supplies 3. .
Products and services: Fees for products. Student nurses.C. vice president of Disaster Services at the American Red Cross.• and so forth. the American Red Cross supplies over 3. Each year more than 12 million Americans take advantage of lifesaving courses offered by the Red Cross.570 billion (see Exhibits 3. and so on. It works with the World Health Organization to alleviate malnutrition. Massachusetts General Hospital and the American Red Cross jointly own a patent for a protein associated with the underlying cause of Alzheimer's disease.000 hospitals with blood donations."!' About 12 million Americans enroll in Red Cross courses each year. Recruiting and organizing volunteers. 13 In February 2001 the American Red Cross teamed up with Coinstar. and tissue services.1 Technology and Operations Technology has helped the American Red Cross better coordinate its efforts among its 1. For Cindee Archer. Total operating expenses for the fiscal year 2001-2002 were $3. primary health care programs. feeding programs. and the use of new technology will make this information available online. and diarrhea in poor countries and to support primary health care. Cindy Archer also believed that "more and more people are coming onlinethis isn't going to go away.. The Red Cross has routinely published the latest public health information. The communication network allows it to locate family members during crises more efficiently. Russ Finkelstein." a service that enables blood drive sponsors to use their intranets to recruit donors and allows hospital customers to order blood products online. and improve response time to local disasters. The Web site helps visitors locate local Red Cross shelters. administer funds. Financial Overview In fiscal year 2001-2002 the American Red Cross had operating revenues of $4. and so forth. Geneva Conventions. and obtain information about donating and volunteering. it's only going to get more pervasive. grants. the Internet serves as a vital source of information to the American public and as a new way to collect donations. and so on. other monetary and in-kind contributions. The Red Cross is able to provide long-term aid and education to those in need. plasma.400 chapters and to expand its reach across America.117 billion. strengthen public health.v'? However. Coinstar machines were located within two miles of 130 million Americans. Jane Delano Society. and young adults. You feel this sense of urgency whenever there's a disaster-e-you want that information up as quickly as you can get it. Wireless communication allows the American Red Cross to make faster damage assessment at the scene. indicated that "If every American near a Coinstar machine would donate a handful • • Disaster costs: Assistance to victims."? Archer worked on developing a Web site where visitors could enter a zip code and quickly find information. 4. and 5). International Services. staff expenses at disaster sites." a nationwide disaster simulation to help prepare for acts of terrorism. testing. and it's not necessarily that.743 billion. These "click" sites appeal to a newer and often younger audience for the nonprofits. Investment income and other income: Investment income from endowments and reserve funds and income from contracts to provide various programs. materials.. legacies. "The Internet has definitely changed how the whole organization thinks. In 1999 the American Red Cross joined the Federal Emergency Management Agency for "TOPOFF. and distributing blood and tissue. Red Cross delegates help local citizens rebuild infrastructure. In 2000 it launched "iGiveLife. and major expenses included:" can Red Cross in Washington. As a result of recent research and development. "Some of them think this is going to be a kind of panacea for doing fund-raising. find relatives in a disaster area.P Strategic Alliances The American Red Cross has established a number of alliances with other organizations. Three main funding sources for the American Red Cross were:" • • Contributions: Fund-raising efforts by the United Way & Combined Federal Campaign. online media manager for the Ameri- . Archer stated. Total operating revenues for fiscal year 2000-2001 were $2. A donation to the World Hemophilia Foundation of plasma product is used to treat hemophilia. expenses in blood. fees from collecting. Total operating expenses for the 2000-2001 fiscal year were $2. and courses. Also. Nursing. In addition. Biomedical services: Facility maintenance. D. In the near future. there were costs associated with a Web site that many nonprofit groups did not realize. Inc. keep up with breaking news. director of outreach at Action Without Borders has stated. Youth Involvement. Funding disaster services: Expenses to solicit donations. Consumers could drop loose change into the Coinstar machines located in local supermarkets.712 billion. John Clizbe. Volunteering. Helping kids. to collect Red Cross donations for disaster relief efforts. 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. lack of pure water. It is now possible to make these courses available online. Emergency disaster response. it may be possible for the American Red Cross to offer an online shopping network to generate additional resources. teens.
623 936.293 63 63 23.570 15. net of allowance for obsolescence of $7.036 357.674 28.Red .354 2.103 56 15.604 in 2002 and $19.500 771.541 11. 2002 (with summarized information as of June 30.894 18.301 in 2001: Trade Contributions.089 2.137 liabilities and netassets Cross.162 585.826 823.149 287.402 3.798 1.575..272 $3.825 319.894 18.587 mitl11ents and contingencies L.525.374.662 39.164.453 120.238 2.704 380. $2.913 Receival.386 12._ ~jhibit 3 (ill thousands) Consolidated Statement of Financial Position.'c· _~.. net 304.514 15.411 $439.825 197.050 $ 1.374.385 American.544 155.258 110.545 34.buildings..619 $771. 9.209 39.042 92.209 823.149 2.653 366.. current portion Other Inventories. 2002.243 15.964 325.042 93.293 3.092 20 83 380.823 950.626 1. Annual Report.180 13.437. 2001) $146.569 11.547 986.602.924 liabilities 20..473 7.252 12.385 6.801 126.453 120.92 22.633 4.525.543 16. •.374 203. June 30.066 $380.541 35.lles.654 183 29.421 1.247 309.913 548.784 in 2001 Other assets Total current assets Investments Contributions receivable Prepaid pension costs Land.556 379.892 1.680 (-'elnsieln and postretirement liabilities benefits 357.453 296.750 in 2002 and $6.0..029.626 1. net of allowance for doubtful accounts of $19. and other property.840 12.924 2..57.
845 1.616 154.463 51.745 96.901 174.118 22.302 30.137 $2.156 617.085 (131.848 136.351 230.182 311.2001) (in thousands) $ 205.182 311. 103.931 61.604 (63. 2002 (with summarized information for the year ended 30.261 1.902 32.071 ) 2. Year ended June 30.924.201 (31.902 32.978 203.077 137.960 108.289' 1.970 337.222 67~175 36.402 $1.022 705 Armed Forces Emergency Services Disaster services liberty disaster relief-Sept.195) 411.601 989.086 $380.594 49.238 2.069 2.513 308.156 11 617. 2002.736 3.518 (548) 419.575.587 .967 213.960 1.924.513 308.394 49.906 61.259.815) 1. Annual Report.756 284.915 906 1.171 81.097 4.967 213.570.614 152.712.090 121)24 50.164.872.728 76.008 (1.980 360.089 1.060 6.901 174.844 2.175 81.822 1.137 in net assets from operations gains (losses) effect of accounting change in net assets beginning of year end of year Red Cross.570.066 546.582 58.619 22.410 3.900) (28.726 263.164.410) 420.727 115.035.058 150.649 $ 757.931 420.4 Consolidated Statement of Activities.035.488 58.614 152.736 3.549 84.848 136.342 2.448.742.077 136.699.083 3.108 45.272 65.034 21.259.876) 2.437.674.872.135 2.083 3.18 22.5.208 $2.405 40.686.747) 19.117.960 1.330 (135. response Biomedical services Health and safety services Community services International services program services Supporting services: Fund raising Management and general 61.466.171 82.727 (2.236 213.016 22.195.
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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. Somerset County. The ASAE provides the Red Cross with demographic information about associations and assistance with identifying organizations they wish to contact during times of need. senior vice president. the Red Cross would be that much better prepared to respond to disaster immediately. and creative displays in stores across the country. food. In January 2002 Masterfoods USA presented a check to the Red Cross in the amount of$3. and other services to victims' families and others affected. and changes in legislation. said. 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. and at the Pentagon to provide meals. The workers were unhappy about long hours. a Red Cross spokesperson. the plaintiffs alleged the Red Cross violated Section 2 of the Sherman Antitrust Act. HemaCare's chief executive officer.. and blue M&Ms specifically to benefit the Red Cross. and meals for volunteers and staff working on-site. the Red Cross had annual sales of more than $1. 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. COO of Coinstar. Pennsylvania. and increasing health benefit costs. In the lawsuit. or rescue workers. and relief workers.g. William Nicely. "Everything is happening at such a fast pace. a Red Cross spokeswoman." unfair competition under the California Business and Professional Code. said in a written statement. MD.'? Unfair Trade Practices Lawsuit The Red Cross derived 60 percent of its revenues from the sale of blood. platelets) below production costs to drive out competitors while it charged higher prices for the same products in markets where there is no competition.' stated Skip Seitz." Rich Stillman. 15 One hundred percent of all profits from the sales of these M&Ms were donated to the American Red Cross Disaster Relief Fund. and Liberty Disaster Relief Fund After the terrorist attacks on September 11.5 million."20 Recent Problems Events between 2000 and 2002 provided the American Red Cross with a number of challenges. counseling. "You no longer need a credit card or checkbook to provide financial support to those in need. attack. 2001. She indicated that organization officials earmarked $100 million from the fund to provide short-term financial assistance to families of victims. based on Healy'S policy of using donations for a "long period of C78 Case 11:: Amer lean Red Cr ass . HemaCare Corp. and Coral Blood Services alleged the Red Cross had cost them more than $25 million in lost business. a Mars Incorporated Company. lodging. the new M&Ms' captured the heart of America. "What has taken place is extraordinary. Millions of dollars."!" Masterfoods USA. the Red Cross had collected $202 million in donations. They further alleged that the American Red Cross priced some blood products (e. and we must respond in an extraordinary way." "Through appearances on television. Because of the large dollar amount of donations from the American people. their families. child care. "We believe that's unfair and illegal. We have been in full compliance with the law. declarations. Respite centers were set up in New York City. Less than 50 percent of the money raised was targeted for victims. and will explore efforts in joint training exercises. The American Red Cross has a heavy burden-to live up to the inspiration and memory of those lost.2001."? Blythe Kubina.3 billion. American Red Cross Growth and Integrated Development. In providing more than half the nation's blood. 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. and help from a myriad of volunteers contributed to Red Cross efforts to provide aid to survivors. The lawsuit also charged tortuous interference. white. It is with great humility and pride that we carry out this noble obligation/'P On October 12. stated. those handfuls will make a huge difference in our capacity to help others thisyear. "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. the American Red Cross rose to the challenge of providing the most extensive relief operation in its 120-year history. created a special package of red. thousands of blood donations. Deborah Goldburg. victims' families. Bernadine Healy. unfair trade practices.P This planned distribution of funds. the president and chief executive officer of the Red Cross. The Red Cross is a fine organization. said in a written statement. radio and newspapers. sleeping quarters. which prohibits monopolization. and we will vigorously defend this lawsuit. We just want them to play by the rules that are reasonable and fair and compete on a level playing field. and transportation were provided to families of missing foreign nationals." 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 American Red Cross released a spending plan for the first $300 million in the Liberty Fund. The national campaign theme used for this promotion was "Taking Care of America Everyday. In response to the tragedy. frequent schedule changes. Financial assistance. and other items to relief workers and volunteers. Within 15 days of the September 11. the Red Cross set up family assistance centers to provide counseling. If all Americans donate the change in their wallet or pocket. 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. stated. financial assistance.of change on their next supermarket visit. Funds were used for travel.
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. "As oflast week. 14 months after the fire. All chapters must have an independent annual review." caused a huge uproar." In response. The Red Cross would provide increased financial support to families.500 families affected by the attacks. "They also decided to put a disclaimer in their ads saying that donations will be used for this and other disasters. Jack Campbell. and donors who responded to September 11th. . we will never have public truSt.org Web site. 2001. it was determined that such a report could not be provided by the due date.uncertainty and recovery.000families of displaced workers and disaster workers Provision for 14million meals. As for the Alpine fire in Southern California. on the CBS news show 60 Minutes. COO of the alliance. In addition. announced that the American Red Cross received $930 million in contributions and this money was used to provide the following." she said." The Lancet reported. fires. "The people of this country have given the Red Cross their hard-earned dollars. $ millions gir~Gt. These donations were given in response to Healy'S "Together. Chapters must meet specific national guidelines to maintain their charters. president of the alliance."28 In addition to donating money. made some unsupported public statements regarding the Red Cross that were reported in the Philadelphia Inquirer. chairman of the American Red Cross Board of Governors. Mike Wallace reported. "Outside audits of local Red Cross chapters are rare. sent a letter to CBS News indicating the errors and an explanation. Deborah Daley reported. 2002. and extend the use of toll-free telephone lines. It appears to have contained some inaccuracies concerning floods. "In the West Virginia flood ad. it took us too long to hear their message.P 60 Minutes Program 1." Deborah Daley responded that chapters are accountable in a number of ways. Harold Decker.althservices for 232.P? On March 7. The Red Cross does regular audits of chapters. Experts questioned the wisdom of calling for blood donations when there were very few blood recipients.org" Web site. 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. David McLaughlin stated. David T. Chapters that have over $100. we can save a life" public service announcement. 2002.000 in annual expenses must have an external audit conducted by an independent CPA.assistanceto 3. Wallace reported.000people $169 270 94 3. the Better Business Bureau Wise Giving Alliance removed the American Red Cross from its "give. hire an additiona1200 caseworkers.i" The donors blasted Healy because they expected their donations to be helping September 11 disaster victims now. 2002." Harold Decker. stated. the "this and other disasters" language appears in the same font and size as the rest of the body copy appealing for support. their trust. In fact. and the financial accountability of Red Cross chapters. "Today we are recognizing the work of our staff. the American public donated blood for the disaster victims. Wallace reported. By November 2001 about 10 percent of the red blood cells collected on September 11 and 12 had expired. 2. agreed to a March 30 deadline for the updated report. interim president.'! BBB Wise Giving Alliance On February 16. Regrettably. Art Taylor. "I had no choice. participate in a database to be shared among relief agencies." Healy finally responded with her announcement of retirement. "Donors charged the organization with abuse of their good intentions. 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. David McLaughlin stated. Healy was confronted with allegations of "panicking the public into wasteful donations of blood. the American Red Cross saluted the staff and volunteers who provided assistance to the more than 54. In a comment about advertising practices. 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. and very clear direction for our September 11 relief effort. The largest 126 chapters must send quarterly financial reports to the national Red Cross.266families of . a spokesperson for the Red Cross. Given the recent activities of the American Red Cross. volunteers.P In a congressional hearing.S.~ssistanceto 51. mental he. McLaughlin. The attorney general of New York State threatened legal action. "If we don't subject ourselves to public scrutiny. allegedly because the American Red Cross did not provide a timely report to the alliance. She stated that Wallace's claim that chapters "are not even required to submit financial reports" is completely false. and health services for 129. and Bennett Weiner.32 Another onslaught of negative publicity for the American Red Cross occurred March 10.26 On November 14. CFO of the Red Cross. claiming that the organization's board had pushed her OUt. Deborah Daley. The trouble is.000people. interim CEO and president of the Red Cross."?" In an article in U. News & World Report. it's in small print. H.'dE)ceasedand seriously injured ..
20. 24. and the American Red Cross. November 5: 75.000 in the months since last September. 2001. 7. 2000. 25. where she earned the rank of rear admiral. politics. February 1. 2002. said. C80 Case 11:: American Red CI ass . David McLaughlin. November 19. Cross. Tyrangiel. 33.S. News & WorldReport. Modern Healthcare 31. Red Cross announces major changes in Liberty Fund. Press release. 2001. 8. Greenberg. Blood.S. 12. Taylor. The timely and capable response day-in and day-out to these disasters speaks volumes about the character of the volunteers and staff. With great insight into our mission. 2001. chairman of the Board of Governors of the American Red Cross.org. Navy. Cinda. Ibid. Ibid. Charity olympics. 17. some 45. Press release. US Newswire." Deborah Daley responded that the chapter has provided up-to-date financial information on its response to the Alpine fire three times since November. Samantha. In his announcement. Lancet. Press release. but there are costs. 2000-2001. 11. February 16. 53(8): 12. American Red Cross. How should she proceed? Endnotes 1. Greenberg. 21. 2002." As she begins to guide the organization.redcross. Ibid. 2001. The charity olympics: After weeks of record giving. 2001. February 12.. and the American Red Cross. Becker. October 1: 8. US Newswire. Blood. and the American Red Cross. Newsweek: Former Red Cross head says her fundraising message was clear . 35. PR Newswire. Red Cross workers on strike. 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 3. Greenberg. 2001. 2001. December 9. Daniel S. Red Cross announces major changes in Liberty Fund: Fund solely used for people affected by September 11 tragedy. Evans has served as national executive director of the Girl Scouts of the USA for the past four years. prior to which she had a 29-year career in the U.San Diego was still waiting for a full accounting of how the money donated for the fire victims has been and will be spent. ASAE and American Red Cross formalize partnership agreement. American 2. Red Red Red Red Red Cross. 9.. 30. Tyrangiel. Josh. Marsha Johnson Evans must confront the many issues faced by the American Red Cross. their talent. 28. American 5. Association Management. Fund Raising Management. 15. Annual June 27. 23. 2001-2002. American Red Cross letter to Better Business Bureau's Wise Giving Alliance. PR Newswire. Sanborn. Cross. 2000. Red Crossroads. Taylor. Charity olympics. 32. Ibid. American Red Cross. 2002. A torrent of donations. 16. Stephanie. Press release. 2002. Ibid. 18. November 14. Blood. 29. U. 14. 26. politics. 31(4): 33. Red Cross faces antitrust lawsuit. Cross. 31. and most especially their dedication. Reports. Marsha. 2001. June 27. Modern Healthcare 31. 19. American Red Cross. Levine. American Red Cross. Tyrangiel. March 7. 2000. Press release. 22. Ibid. Ibid. 13. American 4. 2002. Red Cross faces antitrust lawsuit.. American 6. she is well poised to guide our organization as we continue to provide vital services in a world faced by new challenges. Annual Report. 34. Reports. 10. charities wrestle with how best to spend money pouring in since attacks. Looking to the Future After a five-month search. American Red Cross. 27. Johnson Evans was named president and CEO of the American Red Cross on June 27. November 24: 1789. 200 I. Annual Report. Ibid. 2002. American Red Cross and Coinstar to launch new fundraising technology to prepare for disasters. Annual Cross. 2002. politics. Mark. February 1."?" Evans remarked that: In the midst of responding to the extraordinary demands of 9/11 and a lot of criticism about these efforts. Infoworld. www. Nonprofits reap rewards of the Web-Internet proves to be a great fund-raising tool for charities. 22(25): 37. Americans want to know: Is that money helping? Time. January 1: 20. 2000. "Marty's unique style of leadership along with her experience as established administrator will bring new vigor to the American Red Cross.