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
HIV/AIDS education. awareness required for exceptional service. seniors.l1lJou~lea.redcross. must allNaysmaintain their autonomy so that they may be able atall times to act in accordance with the principles of the Movement.ievethe suffering of individuals. "~.esin.independently. race.The National Societies. to identify. always listening totlieirneeds and lookingforways to serve through existing or new initiatives. e72 Case 11:: American Red Cross ."_--'-" f)(hibit 1 Principles ofIntemational Red Cross • • • • • • • Hurilanity:ThelnternationalBed Cross and Red Crescent Movement. obtain. The American Red Cross supplies 3. . and lasting peace amongst all peoples. Universality: The International Hed Cross and Red Crescent Movement.eavors rel. hUIllanitari an services of their governments and subject tothe laws of theirrespective. In~ependence: The Movement isindependent. It promotes mutual understanding. financial assistance. collectively and individually. class. cooperation.countries.redcross. being guided solely by their needs. Source: American Red Cross. and maintain competencies andthe. effectively. Educational services to prepare for disasters.ithoutdiscrimination to the wounded on the battlefield. inits internati. transportation. 9~nti.~ndnational capacity.org.andappreciation. Swimming and lifeguard classes. born of a desire tobring assistance IN. Each year 83.eacknowledge.generosity. Unity: There can be only one Red Cross or one Red Crescent Society in anyone country.allhandto ensure respectforthe human being. endeavors. Stevvardship: We act respgnsibly.is worldwide. Voluntary Service:ltis a voluntary relief movement not prompted in any manner by desireJorgain.~~irit:Asafamilvofdonors. and efficiently with resources entrusted to us.rning:We seek.to prevent and alleviate human suffering WQereit may be.orpoliticafopinions. food and nutrition information. and youth.Itmust carryon its humanitarian work throughout its territory. 1111~f)~if)lity:ltrnakesno discrimination asto nationality. providing fer victims of disasters andh_elpingpeople prevent. Disaster Services. and to give priority to to lT1?sturgentcases of distress. Help for the homeless. > Ej(hibit 2 Values of the American Red Cross • • • • • • • Humanitarianism: We existto serve others in need. Int~grity:Weact with honesty. while auxiliari. or ideological nature.en~. in which all Societies have equal status and share equal responsibilities and duties in helping eachother. ~~spect: Vv. the Movementmay not fake sides in or engage atany time in controversies of a political.respect. and so forth. Its purpose is to protect life and he. Itmust be opento all. andstaff we search for ways to provide hope to servewhileidemonstratingcompassion. ".org.found. and without discrimination. demonstrate courage and accountability under pressure. always tpimprove. and openly share ideas and i_nformationwith each other.religious beliefs.volunteeJs. in excess of 6 million pints of blood.III~tal'Y. Community Services. Health and Safety Services.000 hospitals with about half of the blood used in the United States. shelter.the. ~~lpingOthers:Weareattentive and responsive tothose we serve. www. living well programs. racial. and so on.~utrality: In order to continue to enjoy the confidence of all.000 volunteers help disaster victims by providing food. and respond to emergencies. religious. and support the rights and diversity of each person in our organization a?dinthecommunities we serve. mental health counseling. friendship. Source:www.onal. prepare for.
teens. Products and services: Fees for products. As a result of recent research and development." a nationwide disaster simulation to help prepare for acts of terrorism. feeding programs. find relatives in a disaster area. Youth Involvement. plasma.117 billion. Total operating expenses for the fiscal year 2001-2002 were $3. Helping kids. 4. and improve response time to local disasters. Student nurses. indicated that "If every American near a Coinstar machine would donate a handful • • Disaster costs: Assistance to victims.712 billion. director of outreach at Action Without Borders has stated.000 hospitals with blood donations. there were costs associated with a Web site that many nonprofit groups did not realize. it's only going to get more pervasive. John Clizbe. D. In 2000 it launched "iGiveLife."!' About 12 million Americans enroll in Red Cross courses each year. legacies. Cindy Archer also believed that "more and more people are coming onlinethis isn't going to go away. it may be possible for the American Red Cross to offer an online shopping network to generate additional resources. Consumers could drop loose change into the Coinstar machines located in local supermarkets. Jane Delano Society. It is now possible to make these courses available online. 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. A donation to the World Hemophilia Foundation of plasma product is used to treat hemophilia. staff expenses at disaster sites. Also. primary health care programs. the American Red Cross supplies over 3. vice president of Disaster Services at the American Red Cross. Wireless communication allows the American Red Cross to make faster damage assessment at the scene. Red Cross delegates help local citizens rebuild infrastructure. to collect Red Cross donations for disaster relief efforts. Massachusetts General Hospital and the American Red Cross jointly own a patent for a protein associated with the underlying cause of Alzheimer's disease. and young adults. Volunteering. International Services. and distributing blood and tissue. 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. "Some of them think this is going to be a kind of panacea for doing fund-raising. In 1999 the American Red Cross joined the Federal Emergency Management Agency for "TOPOFF.C.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. other monetary and in-kind contributions. Total operating expenses for the 2000-2001 fiscal year were $2. and so on. The communication network allows it to locate family members during crises more efficiently. "The Internet has definitely changed how the whole organization thinks. lack of pure water. You feel this sense of urgency whenever there's a disaster-e-you want that information up as quickly as you can get it. Emergency disaster response. strengthen public health. online media manager for the Ameri- . and tissue services. Investment income and other income: Investment income from endowments and reserve funds and income from contracts to provide various programs. 13 In February 2001 the American Red Cross teamed up with Coinstar.570 billion (see Exhibits 3. and courses.v'? However. expenses in blood. materials. Three main funding sources for the American Red Cross were:" • • Contributions: Fund-raising efforts by the United Way & Combined Federal Campaign.400 chapters and to expand its reach across America. testing. the Internet serves as a vital source of information to the American public and as a new way to collect donations. Biomedical services: Facility maintenance. and major expenses included:" can Red Cross in Washington. Total operating revenues for fiscal year 2000-2001 were $2." a service that enables blood drive sponsors to use their intranets to recruit donors and allows hospital customers to order blood products online. In the near future.• and so forth. and it's not necessarily that.743 billion. and so forth. Recruiting and organizing volunteers. The Red Cross has routinely published the latest public health information. and the use of new technology will make this information available online."? Archer worked on developing a Web site where visitors could enter a zip code and quickly find information. For Cindee Archer. fees from collecting.. Each year more than 12 million Americans take advantage of lifesaving courses offered by the Red Cross. Geneva Conventions. Funding disaster services: Expenses to solicit donations. Coinstar machines were located within two miles of 130 million Americans. keep up with breaking news. grants. The Web site helps visitors locate local Red Cross shelters. administer funds. In addition. Nursing. and 5). Russ Finkelstein. and obtain information about donating and volunteering. Financial Overview In fiscal year 2001-2002 the American Red Cross had operating revenues of $4. and so on. Inc. It works with the World Health Organization to alleviate malnutrition. Archer stated.. The Red Cross is able to provide long-term aid and education to those in need.
913 548.180 13.301 in 2001: Trade Contributions.547 986.924 2. $2.164.453 120.402 3.238 2.453 120.243 15.653 366. 2002 (with summarized information as of June 30.385 American.654 183 29.453 296.541 35.619 $771. 9.626 1. •.209 823.252 12.674 28.544 155.680 (-'elnsieln and postretirement liabilities benefits 357. current portion Other Inventories.042 92.258 110.'c· _~.386 12.0.092 20 83 380. net of allowance for doubtful accounts of $19.149 287.604 in 2002 and $19.894 18.569 11.525.750 in 2002 and $6.293 3.964 325.570 15.374.541 11. and other property.894 18.buildings.801 126.825 197. 2002.924 liabilities 20. net 304.840 12.209 39.575.704 380.798 1..826 823.543 16.525..103 56 15.473 7.149 2.411 $439..545 34.247 309.784 in 2001 Other assets Total current assets Investments Contributions receivable Prepaid pension costs Land.892 1.lles.587 mitl11ents and contingencies L.374.421 1.293 63 63 23..623 936.354 2.633 4.437.626 1.385 6..374 203. net of allowance for obsolescence of $7.57.036 357.050 $ 1.825 319.137 liabilities and netassets Cross.089 2._ ~jhibit 3 (ill thousands) Consolidated Statement of Financial Position.602. June 30..913 Receival.556 379.662 39.823 950.500 771.272 $3..514 15.029.92 22. Annual Report.162 585.042 93.Red .066 $380. 2001) $146.
071 ) 2.302 30.4 Consolidated Statement of Activities.402 $1.034 21.549 84.614 152.726 263.463 51.614 152.960 1.261 1.171 82.712.137 in net assets from operations gains (losses) effect of accounting change in net assets beginning of year end of year Red Cross.208 $2.736 3.967 213.18 22.182 311.008 (1.513 308.901 174.289' 1.137 $2.587 .902 32.575. Annual Report.405 40.960 1.728 76.900) (28.488 58.108 45.727 (2.924.2001) (in thousands) $ 205.582 58.330 (135.699.970 337.931 420.747) 19.259.876) 2.604 (63.090 121)24 50.201 (31.259.238 2. response Biomedical services Health and safety services Community services International services program services Supporting services: Fund raising Management and general 61.060 6.085 (131.649 $ 757.745 96.410 3.686.195.978 203.967 213.118 22.164.437.915 906 1.844 2.727 115. 2002 (with summarized information for the year ended 30.164.236 213.182 311.931 61.272 65.822 1.448.117.097 4.083 3.077 137.594 49.156 11 617.069 2.960 108.848 136.815) 1. Year ended June 30.906 61.135 2.342 2.466.872.980 360.619 22.736 3.616 154.872.171 81.848 136. 103.035.924.570.756 284.570.601 989.175 81.016 22.058 150.845 1.083 3.156 617.742.222 67~175 36.351 230.089 1.518 (548) 419.674.066 546. 2002.513 308.086 $380.022 705 Armed Forces Emergency Services Disaster services liberty disaster relief-Sept.5.902 32.410) 420.394 49.035.077 136.195) 411.901 174.
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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. They further alleged that the American Red Cross priced some blood products (e. The American Red Cross has a heavy burden-to live up to the inspiration and memory of those lost. "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 president and chief executive officer of the Red Cross. Financial assistance. the new M&Ms' captured the heart of America."? Blythe Kubina. COO of Coinstar. Because of the large dollar amount of donations from the American people. and blue M&Ms specifically to benefit the Red Cross. The Red Cross is a fine organization. unfair trade practices. and help from a myriad of volunteers contributed to Red Cross efforts to provide aid to survivors. a Red Cross spokeswoman. declarations."20 Recent Problems Events between 2000 and 2002 provided the American Red Cross with a number of challenges. 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. thousands of blood donations. 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. "You no longer need a credit card or checkbook to provide financial support to those in need. The workers were unhappy about long hours. We have been in full compliance with the law. attack. MD. said. HemaCare's chief executive officer. Within 15 days of the September 11. a Mars Incorporated Company. Funds were used for travel. 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. sleeping quarters.3 billion. child care.' stated Skip Seitz. If all Americans donate the change in their wallet or pocket. senior vice president. We just want them to play by the rules that are reasonable and fair and compete on a level playing field. and Liberty Disaster Relief Fund After the terrorist attacks on September 11. and at the Pentagon to provide meals.5 million. counseling. and other services to victims' families and others affected. Pennsylvania. 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. In January 2002 Masterfoods USA presented a check to the Red Cross in the amount of$3. the Red Cross had annual sales of more than $1. and transportation were provided to families of missing foreign nationals. HemaCare Corp. 15 One hundred percent of all profits from the sales of these M&Ms were donated to the American Red Cross Disaster Relief Fund. American Red Cross Growth and Integrated Development. and Coral Blood Services alleged the Red Cross had cost them more than $25 million in lost business..g. or rescue workers. food. Millions of dollars. The national campaign theme used for this promotion was "Taking Care of America Everyday. Somerset County. Less than 50 percent of the money raised was targeted for victims. 2001. "Everything is happening at such a fast pace. created a special package of red." Rich Stillman. stated. said in a written statement. lodging. and other items to relief workers and volunteers. those handfuls will make a huge difference in our capacity to help others thisyear.2001. "What has taken place is extraordinary. radio and newspapers. their families. a Red Cross spokesperson. Respite centers were set up in New York City. which prohibits monopolization. frequent schedule changes. and relief workers. In providing more than half the nation's blood. and increasing health benefit costs. and we must respond in an extraordinary way. the American Red Cross rose to the challenge of providing the most extensive relief operation in its 120-year history. 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. William Nicely. and changes in legislation. said in a written statement. "We believe that's unfair and illegal.'? Unfair Trade Practices Lawsuit The Red Cross derived 60 percent of its revenues from the sale of blood. The lawsuit also charged tortuous interference. the Red Cross had collected $202 million in donations. It is with great humility and pride that we carry out this noble obligation/'P On October 12. financial assistance.of change on their next supermarket visit. and we will vigorously defend this lawsuit. white. stated. and meals for volunteers and staff working on-site. and will explore efforts in joint training exercises. based on Healy'S policy of using donations for a "long period of C78 Case 11:: Amer lean Red Cr ass . platelets) below production costs to drive out competitors while it charged higher prices for the same products in markets where there is no competition. In response to the tragedy. the Red Cross set up family assistance centers to provide counseling." 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 ASAE provides the Red Cross with demographic information about associations and assistance with identifying organizations they wish to contact during times of need. Bernadine Healy. In the lawsuit.P This planned distribution of funds. the Red Cross would be that much better prepared to respond to disaster immediately. the plaintiffs alleged the Red Cross violated Section 2 of the Sherman Antitrust Act." unfair competition under the California Business and Professional Code. victims' families. and creative displays in stores across the country. Deborah Goldburg."!" Masterfoods USA." "Through appearances on television.
" The Lancet reported. These donations were given in response to Healy'S "Together.P 60 Minutes Program 1. the American Red Cross saluted the staff and volunteers who provided assistance to the more than 54. H. 2002. Harold Decker. Wallace reported." Harold Decker. Healy was confronted with allegations of "panicking the public into wasteful donations of blood. "Today we are recognizing the work of our staff. 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.~ssistanceto 51. a spokesperson for the Red Cross. the "this and other disasters" language appears in the same font and size as the rest of the body copy appealing for support.500 families affected by the attacks. 14 months after the fire. and extend the use of toll-free telephone lines. it took us too long to hear their message.'! BBB Wise Giving Alliance On February 16.org Web site. Deborah Daley reported. hire an additiona1200 caseworkers.. COO of the alliance.assistanceto 3. 2001."?" In an article in U."28 In addition to donating money. Jack Campbell. and donors who responded to September 11th. In addition. mental he.P? On March 7. "They also decided to put a disclaimer in their ads saying that donations will be used for this and other disasters. The largest 126 chapters must send quarterly financial reports to the national Red Cross. the Better Business Bureau Wise Giving Alliance removed the American Red Cross from its "give.i" The donors blasted Healy because they expected their donations to be helping September 11 disaster victims now. All chapters must have an independent annual review.S.266families of . Wallace reported.000people $169 270 94 3. fires. She stated that Wallace's claim that chapters "are not even required to submit financial reports" is completely false. The trouble is.000families of displaced workers and disaster workers Provision for 14million meals. sent a letter to CBS News indicating the errors and an explanation. $ millions gir~Gt. 2002. allegedly because the American Red Cross did not provide a timely report to the alliance. The Red Cross does regular audits of chapters. chairman of the American Red Cross Board of Governors. The attorney general of New York State threatened legal action. The Red Cross would provide increased financial support to families. "In the West Virginia flood ad. It appears to have contained some inaccuracies concerning floods. In a comment about advertising practices. on the CBS news show 60 Minutes. Art Taylor. and very clear direction for our September 11 relief effort. and Bennett Weiner. Chapters that have over $100. 2002. the American public donated blood for the disaster victims. Chapters must meet specific national guidelines to maintain their charters." Healy finally responded with her announcement of retirement. Deborah Daley. interim president. "Donors charged the organization with abuse of their good intentions. David McLaughlin stated.26 On November 14. Given the recent activities of the American Red Cross.P In a congressional hearing. Regrettably. we can save a life" public service announcement. participate in a database to be shared among relief agencies. "As oflast week. David McLaughlin stated. 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. Experts questioned the wisdom of calling for blood donations when there were very few blood recipients.org" Web site. agreed to a March 30 deadline for the updated report. CFO of the Red Cross.32 Another onslaught of negative publicity for the American Red Cross occurred March 10. . In fact. Mike Wallace reported. we will never have public truSt. "If we don't subject ourselves to public scrutiny. 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.uncertainty and recovery. "The people of this country have given the Red Cross their hard-earned dollars.althservices for 232.'dE)ceasedand seriously injured .000 in annual expenses must have an external audit conducted by an independent CPA. volunteers.000people. By November 2001 about 10 percent of the red blood cells collected on September 11 and 12 had expired. 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." Deborah Daley responded that chapters are accountable in a number of ways. it's in small print. "Outside audits of local Red Cross chapters are rare. "I had no choice." caused a huge uproar." she said. and health services for 129. David T. made some unsupported public statements regarding the Red Cross that were reported in the Philadelphia Inquirer. As for the Alpine fire in Southern California. their trust. it was determined that such a report could not be provided by the due date. McLaughlin. stated. and the financial accountability of Red Cross chapters." In response. announced that the American Red Cross received $930 million in contributions and this money was used to provide the following. 2. interim CEO and president of the Red Cross. News & World Report. claiming that the organization's board had pushed her OUt. president of the alliance.
22(25): 37. 2001. American Red Cross and Coinstar to launch new fundraising technology to prepare for disasters. Ibid. Greenberg. Ibid. Press release. A torrent of donations. 9. American Red Cross letter to Better Business Bureau's Wise Giving Alliance. 22. 30. 21. Press release. Ibid. Annual Report. US Newswire. 2001. Charity olympics. The timely and capable response day-in and day-out to these disasters speaks volumes about the character of the volunteers and staff.000 in the months since last September. www. Lancet. 16. 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. U. Red Red Red Red Red Cross. Red Cross faces antitrust lawsuit. Ibid.redcross. Association Management. October 1: 8. 2001.. 31. Mark. February 1." Deborah Daley responded that the chapter has provided up-to-date financial information on its response to the Alpine fire three times since November. David McLaughlin. Red Cross announces major changes in Liberty Fund: Fund solely used for people affected by September 11 tragedy. American 4. News & WorldReport. Sanborn. Ibid. 14. How should she proceed? Endnotes 1. 29. With great insight into our mission. 2001. 27. 12. Becker. Levine. 10." As she begins to guide the organization. and the American Red Cross.S. American 6. and most especially their dedication. Annual Cross. American Red Cross. 2002. 26. prior to which she had a 29-year career in the U. Samantha. February 12. Annual June 27. some 45. American 5. 53(8): 12. Taylor. 35. chairman of the Board of Governors of the American Red Cross. she is well poised to guide our organization as we continue to provide vital services in a world faced by new challenges. 11. Greenberg. 8. their talent. Charity olympics. November 5: 75. The charity olympics: After weeks of record giving. American 2. Reports. Blood. November 24: 1789. 18. Tyrangiel. Modern Healthcare 31. November 14. American Red Cross. December 9.. politics. American 3. Press release. 19. Americans want to know: Is that money helping? Time. 2002. 2002. 2001. Cross. Johnson Evans was named president and CEO of the American Red Cross on June 27. Nonprofits reap rewards of the Web-Internet proves to be a great fund-raising tool for charities. but there are costs. Marsha. US Newswire. 2001. "Marty's unique style of leadership along with her experience as established administrator will bring new vigor to the American Red Cross. politics. Red Cross workers on strike. Annual Report. 33. March 7. PR Newswire. Fund Raising Management. 17. Press release. Evans has served as national executive director of the Girl Scouts of the USA for the past four years. Reports. Navy. politics. 13. 25. Tyrangiel. 23. Marsha Johnson Evans must confront the many issues faced by the American Red Cross. 2002. 15. Newsweek: Former Red Cross head says her fundraising message was clear . Red Crossroads. Ibid. Cross. Blood. Press release. Red Cross announces major changes in Liberty Fund. 2001. 31(4): 33. Red Cross faces antitrust lawsuit. Infoworld. said. January 1: 20. Josh. 2000. 34. November 19. February 1.S. Cinda. Cross. 7. and the American Red Cross. 2000-2001..San Diego was still waiting for a full accounting of how the money donated for the fire victims has been and will be spent. 2002. charities wrestle with how best to spend money pouring in since attacks. 32. C80 Case 11:: American Red CI ass . Modern Healthcare 31. 20. 2000. 28. Ibid. 2001-2002. Ibid. Stephanie."?" Evans remarked that: In the midst of responding to the extraordinary demands of 9/11 and a lot of criticism about these efforts. ASAE and American Red Cross formalize partnership agreement. 2002. In his announcement. 24. 2001. Blood. Looking to the Future After a five-month search. February 16. Daniel S. Taylor. where she earned the rank of rear admiral. and the American Red Cross. 2000. PR Newswire. 2000. 200 I. Greenberg. American Red Cross. Tyrangiel. American Red Cross.org. 2002. June 27.