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
It promotes mutual understanding. and openly share ideas and i_nformationwith each other.eavors rel.ithoutdiscrimination to the wounded on the battlefield.l1lJou~lea.III~tal'Y. "~. or ideological nature.ievethe suffering of individuals. friendship. always tpimprove. > Ej(hibit 2 Values of the American Red Cross • • • • • • • Humanitarianism: We existto serve others in need. seniors. and efficiently with resources entrusted to us.000 hospitals with about half of the blood used in the United States.generosity. Universality: The International Hed Cross and Red Crescent Movement. 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. Source:www.org. living well programs. effectively. transportation. Educational services to prepare for disasters. awareness required for exceptional service. Each year 83.eacknowledge.redcross. and lasting peace amongst all peoples. and without discrimination. HIV/AIDS education. www.volunteeJs. while auxiliari. endeavors. and so on. and youth.onal. Voluntary Service:ltis a voluntary relief movement not prompted in any manner by desireJorgain. prepare for. born of a desire tobring assistance IN.andappreciation.The National Societies. andstaff we search for ways to provide hope to servewhileidemonstratingcompassion. Disaster Services. the Movementmay not fake sides in or engage atany time in controversies of a political.to prevent and alleviate human suffering WQereit may be. Unity: There can be only one Red Cross or one Red Crescent Society in anyone country.found."_--'-" f)(hibit 1 Principles ofIntemational Red Cross • • • • • • • Hurilanity:ThelnternationalBed Cross and Red Crescent Movement. In~ependence: The Movement isindependent. providing fer victims of disasters andh_elpingpeople prevent. class. to identify. racial. ~~spect: Vv. in which all Societies have equal status and share equal responsibilities and duties in helping eachother.rning:We seek. and support the rights and diversity of each person in our organization a?dinthecommunities we serve. The American Red Cross supplies 3.esin. obtain. demonstrate courage and accountability under pressure. race. e72 Case 11:: American Red Cross . religious. and so forth.org.religious beliefs. and respond to emergencies. Source: American Red Cross. in excess of 6 million pints of blood.Itmust carryon its humanitarian work throughout its territory.~utrality: In order to continue to enjoy the confidence of all. mental health counseling.000 volunteers help disaster victims by providing food.~~irit:Asafamilvofdonors. Its purpose is to protect life and he.independently.respect. inits internati. Swimming and lifeguard classes. Int~grity:Weact with honesty. hUIllanitari an services of their governments and subject tothe laws of theirrespective. shelter. and maintain competencies andthe. ~~lpingOthers:Weareattentive and responsive tothose we serve. financial assistance.redcross. being guided solely by their needs.orpoliticafopinions. 9~nti.is worldwide. 1111~f)~if)lity:ltrnakesno discrimination asto nationality. Health and Safety Services. Itmust be opento all. cooperation. always listening totlieirneeds and lookingforways to serve through existing or new initiatives. Stevvardship: We act respgnsibly. and to give priority to to lT1?sturgentcases of distress. food and nutrition information.en~.countries.~ndnational capacity. Community Services.the. ".allhandto ensure respectforthe human being. collectively and individually.
and young adults. and obtain information about donating and volunteering. Wireless communication allows the American Red Cross to make faster damage assessment at the scene. Total operating expenses for the 2000-2001 fiscal year were $2. In the near future. The Web site helps visitors locate local Red Cross shelters. Cindy Archer also believed that "more and more people are coming onlinethis isn't going to go away. In 1999 the American Red Cross joined the Federal Emergency Management Agency for "TOPOFF. it's only going to get more pervasive. Jane Delano Society. vice president of Disaster Services at the American Red Cross. to collect Red Cross donations for disaster relief efforts. "The Internet has definitely changed how the whole organization thinks. Student nurses."!' About 12 million Americans enroll in Red Cross courses each year. online media manager for the Ameri- . primary health care programs.570 billion (see Exhibits 3. Investment income and other income: Investment income from endowments and reserve funds and income from contracts to provide various programs. Geneva Conventions. Archer stated.712 billion. Volunteering.400 chapters and to expand its reach across America. lack of pure water. staff expenses at disaster sites. It is now possible to make these courses available online. feeding programs. the Internet serves as a vital source of information to the American public and as a new way to collect donations. and distributing blood and tissue.1 Technology and Operations Technology has helped the American Red Cross better coordinate its efforts among its 1. These "click" sites appeal to a newer and often younger audience for the nonprofits. The Red Cross is able to provide long-term aid and education to those in need. expenses in blood.117 billion. and improve response time to local disasters. administer funds. it may be possible for the American Red Cross to offer an online shopping network to generate additional resources. grants. and the use of new technology will make this information available online. In addition. Russ Finkelstein." a nationwide disaster simulation to help prepare for acts of terrorism. Coinstar machines were located within two miles of 130 million Americans.• and so forth. and so on. Each year more than 12 million Americans take advantage of lifesaving courses offered by the Red Cross.. find relatives in a disaster area." a service that enables blood drive sponsors to use their intranets to recruit donors and allows hospital customers to order blood products online. You feel this sense of urgency whenever there's a disaster-e-you want that information up as quickly as you can get it. and major expenses included:" can Red Cross in Washington.C. For Cindee Archer. testing. The Red Cross has routinely published the latest public health information. the American Red Cross supplies over 3. Inc. As a result of recent research and development. Consumers could drop loose change into the Coinstar machines located in local supermarkets. and 5). materials. 4. legacies. and it's not necessarily that.743 billion. other monetary and in-kind contributions. 13 In February 2001 the American Red Cross teamed up with Coinstar. Products and services: Fees for products. teens. D. and tissue services.000 hospitals with blood donations. there were costs associated with a Web site that many nonprofit groups did not realize."? Archer worked on developing a Web site where visitors could enter a zip code and quickly find information. It works with the World Health Organization to alleviate malnutrition. In 2000 it launched "iGiveLife. and diarrhea in poor countries and to support primary health care.P Strategic Alliances The American Red Cross has established a number of alliances with other organizations. director of outreach at Action Without Borders has stated. and so forth.v'? However. indicated that "If every American near a Coinstar machine would donate a handful • • Disaster costs: Assistance to victims. Recruiting and organizing volunteers. Biomedical services: Facility maintenance. Red Cross delegates help local citizens rebuild infrastructure. Massachusetts General Hospital and the American Red Cross jointly own a patent for a protein associated with the underlying cause of Alzheimer's disease. 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. "Some of them think this is going to be a kind of panacea for doing fund-raising. Youth Involvement. Nursing. Helping kids. and so on. Total operating revenues for fiscal year 2000-2001 were $2. strengthen public health. The communication network allows it to locate family members during crises more efficiently. Three main funding sources for the American Red Cross were:" • • Contributions: Fund-raising efforts by the United Way & Combined Federal Campaign. Emergency disaster response. plasma.. Funding disaster services: Expenses to solicit donations. Financial Overview In fiscal year 2001-2002 the American Red Cross had operating revenues of $4. fees from collecting. and courses. keep up with breaking news. International Services. A donation to the World Hemophilia Foundation of plasma product is used to treat hemophilia. John Clizbe. Also. Total operating expenses for the fiscal year 2001-2002 were $3.
103 56 15.'c· _~.buildings.964 325.575.209 823.544 155. net 304.569 11.258 110.473 7.823 950.243 15.541 35.92 22.042 92.149 2.626 1.825 319.453 120.453 296.042 93. Annual Report.541 11.354 2.547 986.421 1.543 16.894 18.164.089 2.162 585.525. net of allowance for doubtful accounts of $19.209 39. 2002 (with summarized information as of June 30. •. net of allowance for obsolescence of $7.653 366.556 379.036 357. June 30. and other property.301 in 2001: Trade Contributions.386 12.514 15.924 liabilities 20.662 39.525.437.Red .619 $771..149 287.604 in 2002 and $19.801 126.913 Receival..623 936.798 1._ ~jhibit 3 (ill thousands) Consolidated Statement of Financial Position.293 63 63 23.272 $3.029.913 548.0.654 183 29..674 28.411 $439..587 mitl11ents and contingencies L. current portion Other Inventories.704 380.626 1.633 4. 2002.894 18.57.180 13.238 2.545 34..252 12.784 in 2001 Other assets Total current assets Investments Contributions receivable Prepaid pension costs Land.840 12.374.453 120.066 $380.750 in 2002 and $6..374.050 $ 1.892 1. $2.500 771. 2001) $146.402 3.385 American.293 3.826 823.247 309.825 197.680 (-'elnsieln and postretirement liabilities benefits 357. 9.570 15.lles.385 6.374 203.092 20 83 380.602.137 liabilities and netassets Cross..924 2.
513 308.035.727 (2.164.570.601 989.117.066 546.674.845 1.156 11 617.272 65.5.090 121)24 50.466.619 22.616 154.736 3.182 311.815) 1. response Biomedical services Health and safety services Community services International services program services Supporting services: Fund raising Management and general 61.978 203.402 $1.448. 2002. Year ended June 30.2001) (in thousands) $ 205.208 $2.902 32.614 152.901 174.742. 103.410) 420.726 263.872.575.745 96.906 61.901 174.330 (135.924.931 61.699.016 22.844 2.582 58.034 21.086 $380.394 49.182 311.236 213.872.302 30.137 $2.083 3.289' 1.960 108.164.118 22.649 $ 757.201 (31.008 (1.915 906 1.4 Consolidated Statement of Activities.175 81.686.085 (131.902 32.069 2.437.728 76.756 284.060 6.822 1.259.195.736 3.587 .058 150.077 136.604 (63.848 136.848 136.089 1.222 67~175 36.035.967 213.135 2.518 (548) 419.171 81.071 ) 2.980 360.712.513 308.342 2.900) (28.351 230.747) 19.405 40.18 22. Annual Report.876) 2.238 2.077 137.410 3.195) 411.156 617.137 in net assets from operations gains (losses) effect of accounting change in net assets beginning of year end of year Red Cross.570.083 3.549 84. 2002 (with summarized information for the year ended 30.463 51.097 4.960 1.171 82.594 49.727 115.924.614 152.931 420.970 337.261 1.022 705 Armed Forces Emergency Services Disaster services liberty disaster relief-Sept.488 58.108 45.967 213.259.960 1.
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The workers were unhappy about long hours.P This planned distribution of funds."? Blythe Kubina. the Red Cross had annual sales of more than $1. HemaCare Corp. stated. victims' families. the president and chief executive officer of the Red Cross. In the lawsuit. It is with great humility and pride that we carry out this noble obligation/'P On October 12. thousands of blood donations.of change on their next supermarket visit. "We believe that's unfair and illegal. said in a written statement. based on Healy'S policy of using donations for a "long period of C78 Case 11:: Amer lean Red Cr ass . their families. The national campaign theme used for this promotion was "Taking Care of America Everyday. Funds were used for travel. the American Red Cross rose to the challenge of providing the most extensive relief operation in its 120-year history. declarations. a Red Cross spokeswoman. Pennsylvania. 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. the Red Cross had collected $202 million in donations. and creative displays in stores across the country. In response to the tragedy. We just want them to play by the rules that are reasonable and fair and compete on a level playing field. the new M&Ms' captured the heart of America. HemaCare's chief executive officer. Deborah Goldburg. 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.." unfair competition under the California Business and Professional Code." Rich Stillman. "What has taken place is extraordinary.'? Unfair Trade Practices Lawsuit The Red Cross derived 60 percent of its revenues from the sale of blood."20 Recent Problems Events between 2000 and 2002 provided the American Red Cross with a number of challenges. and blue M&Ms specifically to benefit the Red Cross. "You no longer need a credit card or checkbook to provide financial support to those in need. and other services to victims' families and others affected. 2001. Somerset County. those handfuls will make a huge difference in our capacity to help others thisyear. attack. 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 we will vigorously defend this lawsuit. The American Red Cross has a heavy burden-to live up to the inspiration and memory of those lost. and Liberty Disaster Relief Fund After the terrorist attacks on September 11. The lawsuit also charged tortuous interference. If all Americans donate the change in their wallet or pocket. food. platelets) below production costs to drive out competitors while it charged higher prices for the same products in markets where there is no competition. counseling. and increasing health benefit costs. and meals for volunteers and staff working on-site. 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 other items to relief workers and volunteers. senior vice president. and changes in legislation. They further alleged that the American Red Cross priced some blood products (e. In providing more than half the nation's blood. the plaintiffs alleged the Red Cross violated Section 2 of the Sherman Antitrust Act. frequent schedule changes.3 billion. and Coral Blood Services alleged the Red Cross had cost them more than $25 million in lost business. and will explore efforts in joint training exercises. American Red Cross Growth and Integrated Development. a Red Cross spokesperson. or rescue workers. the Red Cross would be that much better prepared to respond to disaster immediately. Financial assistance. Because of the large dollar amount of donations from the American people. William Nicely. COO of Coinstar. "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. unfair trade practices. The ASAE provides the Red Cross with demographic information about associations and assistance with identifying organizations they wish to contact during times of need.5 million. a Mars Incorporated Company.2001. white. stated. In January 2002 Masterfoods USA presented a check to the Red Cross in the amount of$3. Bernadine Healy.' stated Skip Seitz. and relief workers." 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. financial assistance. child care. Less than 50 percent of the money raised was targeted for victims.g. "Everything is happening at such a fast pace. which prohibits monopolization. Respite centers were set up in New York City. sleeping quarters. said. 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. created a special package of red. and at the Pentagon to provide meals. Millions of dollars. Within 15 days of the September 11. The Red Cross is a fine organization. MD. She indicated that organization officials earmarked $100 million from the fund to provide short-term financial assistance to families of victims. the American Red Cross released a spending plan for the first $300 million in the Liberty Fund." "Through appearances on television. and we must respond in an extraordinary way."!" Masterfoods USA. said in a written statement. and transportation were provided to families of missing foreign nationals. lodging. We have been in full compliance with the law. and help from a myriad of volunteers contributed to Red Cross efforts to provide aid to survivors. radio and newspapers. 15 One hundred percent of all profits from the sales of these M&Ms were donated to the American Red Cross Disaster Relief Fund. the Red Cross set up family assistance centers to provide counseling.
000people. Deborah Daley reported. 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. She stated that Wallace's claim that chapters "are not even required to submit financial reports" is completely false.althservices for 232.P 60 Minutes Program 1.'! BBB Wise Giving Alliance On February 16.32 Another onslaught of negative publicity for the American Red Cross occurred March 10. "As oflast week." Harold Decker. The Red Cross does regular audits of chapters." Deborah Daley responded that chapters are accountable in a number of ways. Wallace reported. the American public donated blood for the disaster victims. McLaughlin. Art Taylor. "I had no choice. David McLaughlin stated. it took us too long to hear their message. The attorney general of New York State threatened legal action. Experts questioned the wisdom of calling for blood donations when there were very few blood recipients. Harold Decker. participate in a database to be shared among relief agencies. "In the West Virginia flood ad.P? On March 7. and health services for 129. Chapters must meet specific national guidelines to maintain their charters. their trust. 2.000 in annual expenses must have an external audit conducted by an independent CPA. In a comment about advertising practices. chairman of the American Red Cross Board of Governors. volunteers. News & World Report. and donors who responded to September 11th. 2002. The trouble is.. we can save a life" public service announcement. David McLaughlin stated. made some unsupported public statements regarding the Red Cross that were reported in the Philadelphia Inquirer. H. announced that the American Red Cross received $930 million in contributions and this money was used to provide the following.266families of . Jack Campbell." she said. Healy was confronted with allegations of "panicking the public into wasteful donations of blood.uncertainty and recovery. .P In a congressional hearing." caused a huge uproar. allegedly because the American Red Cross did not provide a timely report to the alliance. fires. "If we don't subject ourselves to public scrutiny. It appears to have contained some inaccuracies concerning floods. "Outside audits of local Red Cross chapters are rare.org Web site. These donations were given in response to Healy'S "Together. president of the alliance. "They also decided to put a disclaimer in their ads saying that donations will be used for this and other disasters. 2001."?" In an article in U. the Better Business Bureau Wise Giving Alliance removed the American Red Cross from its "give.'dE)ceasedand seriously injured . 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.org" Web site. and Bennett Weiner.i" The donors blasted Healy because they expected their donations to be helping September 11 disaster victims now. the American Red Cross saluted the staff and volunteers who provided assistance to the more than 54. Given the recent activities of the American Red Cross. it's in small print. hire an additiona1200 caseworkers. In addition. "Donors charged the organization with abuse of their good intentions.assistanceto 3. "Today we are recognizing the work of our staff. Regrettably. 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. Wallace reported. on the CBS news show 60 Minutes. interim CEO and president of the Red Cross. and the financial accountability of Red Cross chapters. sent a letter to CBS News indicating the errors and an explanation. Deborah Daley. CFO of the Red Cross.500 families affected by the attacks. claiming that the organization's board had pushed her OUt. By November 2001 about 10 percent of the red blood cells collected on September 11 and 12 had expired. 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. $ millions gir~Gt. The largest 126 chapters must send quarterly financial reports to the national Red Cross. 14 months after the fire. In fact. COO of the alliance." In response. Chapters that have over $100. we will never have public truSt." The Lancet reported. agreed to a March 30 deadline for the updated report. Mike Wallace reported.S.26 On November 14. stated."28 In addition to donating money. it was determined that such a report could not be provided by the due date. a spokesperson for the Red Cross.~ssistanceto 51. 2002. and extend the use of toll-free telephone lines.000people $169 270 94 3." Healy finally responded with her announcement of retirement. 2002.000families of displaced workers and disaster workers Provision for 14million meals. "The people of this country have given the Red Cross their hard-earned dollars. As for the Alpine fire in Southern California. 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. The Red Cross would provide increased financial support to families. David T. All chapters must have an independent annual review. and very clear direction for our September 11 relief effort.
. Daniel S. November 14. U. 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. 28. American Red Cross. chairman of the Board of Governors of the American Red Cross. The timely and capable response day-in and day-out to these disasters speaks volumes about the character of the volunteers and staff. 20. PR Newswire. With great insight into our mission. 2002. prior to which she had a 29-year career in the U. Red Cross announces major changes in Liberty Fund: Fund solely used for people affected by September 11 tragedy. 8. Ibid. 31. Red Cross workers on strike. In his announcement. 22(25): 37. Red Cross faces antitrust lawsuit. Annual Report. but there are costs. 2002. she is well poised to guide our organization as we continue to provide vital services in a world faced by new challenges. Tyrangiel. 16. Reports. 15. Annual Cross. November 5: 75. October 1: 8. American 3. 2002. Stephanie. US Newswire. February 12. 11. Greenberg. January 1: 20. American Red Cross and Coinstar to launch new fundraising technology to prepare for disasters. 32. Becker. June 27. "Marty's unique style of leadership along with her experience as established administrator will bring new vigor to the American Red Cross. 2000. 2001. November 24: 1789. 2002.S. Press release. Greenberg. Press release. Marsha Johnson Evans must confront the many issues faced by the American Red Cross. Ibid. and most especially their dedication. US Newswire. Tyrangiel. 25. Reports. Ibid. 53(8): 12. Annual Report. Blood. their talent. Annual June 27. Press release. Red Crossroads." As she begins to guide the organization. said. Modern Healthcare 31. March 7. and the American Red Cross. 2001.. 2001. politics. 2002. 30. American 5. 34. Red Red Red Red Red Cross. Modern Healthcare 31. The charity olympics: After weeks of record giving. 2002. 33. 12. 10. Blood. American Red Cross letter to Better Business Bureau's Wise Giving Alliance. ASAE and American Red Cross formalize partnership agreement. 2002.000 in the months since last September. American Red Cross. Cross. 2000. Josh. Levine. Lancet. Cross. Cross. December 9. How should she proceed? Endnotes 1. politics. charities wrestle with how best to spend money pouring in since attacks. 24. 9. 35. 26. Ibid. American 4. Red Cross faces antitrust lawsuit. 2001-2002. 2000. February 16. PR Newswire. 31(4): 33. Johnson Evans was named president and CEO of the American Red Cross on June 27. Association Management. American 2. Greenberg. 2001. and the American Red Cross. Samantha.org. Blood. politics. Press release. 2001. November 19. where she earned the rank of rear admiral. 2001. Americans want to know: Is that money helping? Time. 200 I. Ibid. Charity olympics. Newsweek: Former Red Cross head says her fundraising message was clear . Marsha. February 1. 2001. 14. Charity olympics. Ibid. American 6. Red Cross announces major changes in Liberty Fund. 7. C80 Case 11:: American Red CI ass . David McLaughlin." Deborah Daley responded that the chapter has provided up-to-date financial information on its response to the Alpine fire three times since November. 2000-2001. 2000.redcross. Fund Raising Management.S. Tyrangiel. Taylor. Evans has served as national executive director of the Girl Scouts of the USA for the past four years. American Red Cross. Press release. American Red Cross. 21. 23. 13. Infoworld.. 27. 22. 29. 17. Mark. February 1. Ibid. Looking to the Future After a five-month search. A torrent of donations. Ibid. some 45. News & WorldReport. and the American Red Cross. Taylor. 19. 2001. Nonprofits reap rewards of the Web-Internet proves to be a great fund-raising tool for charities. American Red Cross. www. 18.San Diego was still waiting for a full accounting of how the money donated for the fire victims has been and will be spent. Navy."?" Evans remarked that: In the midst of responding to the extraordinary demands of 9/11 and a lot of criticism about these efforts. Cinda. Sanborn.
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