Campaign for the Capital?

Elizabeth Dole departs the American Red Cross after 7 years at the helm and hints at a possible bid for the U.S. Presidency

The American Red Cross, one of the country’s largest charities, is seeking a new top executive after its high-profile leader, Elizabeth Hanford Dole, announced her departure in order to consider a run for President of the United States. Such a campaign could put issues of importance to charities in a national spotlight.

“The Red Cross is now solid as a rock and, at this important time in our national life, I believe there may be another way for me to serve our country,” said Mrs. Dole, who joined the charity in 1991 after having served as Secretary of Labor and Secretary of Transportation.

Norman R. Augustine, chairman of the Red Cross’s Board of Governors, said the organization will immediately begin a search for a new leader to replace Mrs. Dole, who leaves on January 15. The charity named Steve Bullock, chief executive officer of the Greater Cleveland chapter, as acting president.

In announcing her resignation to a group of Red Cross employees at the charity’s Washington headquarters, Mrs. Dole touted her accomplishments and basked in the applause of co-workers and the attention paid by the press to her possible candidacy for the Republican nomination for President.

But Mrs. Dole, who is married to former Senator and GOP Presidential nominee Bob Dole, will face intense scrutiny of her record at the Red Cross. She has drawn great praise — and sometimes severe criticism — for her roles as a fund raiser and manager, and once faced a call for her resignation from a major newspaper. Just last month the Minnesota Attorney General’s Office issued a scathing report on the charity’s handling of disaster relief in the wake of Midwest floods.

In her farewell speech, Mrs. Dole said that when she came to the Red Cross, the charity was successful and beloved but “struggling mightily to preserve its tradition of trust.” Problems, she said, included a disaster relief fund facing an impending $30-million deficit and the reality that fund raising would be hurt because of declining support through the United Way.

During her administration, Mrs. Dole redesigned the Red Cross’s fund-raising practices and helped raise $3.4-billion for services to the public, including more than $650-million for disaster relief.

Some critics say that Mrs. Dole’s fund-raising prowess may have been exaggerated. Donations to the Red Cross dropped from $535.6-million in fiscal 1993 to $465.6-million in 1995, the year the group posted a $60-million operating-budget deficit, its first ever. And the organization is falling far short of an ambitious goal it set in 1994 to double the amount of annual gifts to $1-billion by 2000.

But the Red Cross says that its private support for fiscal year 1998, which ended last June 30, was up nearly 16 per cent, to $567-million. “We have never been in better financial health,” Mrs. Dole said. The Red Cross ranked third on The Chronicle’s Philanthropy 400 list of the charities that attracted the most private money in 1997, with $490.2-million (The Chronicle, November 5, 1998).

Some observers say that over the years, Mrs. Dole was able to drum up money from many individuals, corporations, and government officials who were less interested in helping the Red Cross than in impressing her husband, when he was an elected official, or Mrs. Dole herself, anticipating that she might one day run for President. Some worry that a successor with a lower profile would not have such clout; others are relieved that donations under such circumstances are likely to be a thing of the past.

In an interview with The Chronicle shortly before she announced her departure, Mrs. Dole said that her potential as a candidate for high office might have an effect when she seeks gifts. “I don’t even think about it, I just go on doing my thing,” she said. “But maybe there are more people who would come to an event or something.”

Defenders of Mrs. Dole say that the Red Cross’s bottom line was battered in recent years by a series of hurricanes, storms, and other disasters, many of which did not pierce the public consciousness enough to stimulate significant donations. Also costly was the “transformation” of the group’s biomedical division, which is responsible for the collection and distribution of blood — a process that took seven years and cost $287-million.

The undertaking began in 1991, after the U.S. Food and Drug Administration issued rigorous new regulations to govern blood banks. In 1993, the F.D.A. went further, suing the Red Cross in federal court for alleged regulatory violations. As part of the consent decree that resulted from the lawsuit, the Red Cross made a multitude of changes designed to insure better quality control.

Some critics said that Mrs. Dole and the Red Cross made the changes only under federal pressure. But others praise her for putting the Red Cross — which provides about half of the country’s blood supply — back on track.

Mrs. Dole’s management skills came under fire in 1997 after the Red Cross’s consultant, KPMG Peat Marwick, completed a report on the charity that urged a major overhaul of the management of the national office. The review suggested the appointment of a “more robust leadership team” to work with Mrs. Dole, including the hiring of a chief operating officer to help run the organization.

The management review was one reason The Philadelphia Inquirer wrote an editorial in March 1997 calling for Mrs. Dole to step down. The newspaper was also concerned about a story by its Washington bureau that three top advisers from Bob Dole’s 1996 Presidential campaign had won six-figure consulting contracts from the Red Cross during the time that Mrs. Dole was president of the charity. “She has been tiptoeing ever so precariously around and over the charity’s bylaws that demand political neutrality for the organization,” said the newspaper’s editorial.

Mrs. Dole branded the charge as unjustified and “an affront to all Red Crossers.”

A few weeks ago, Mrs. Dole and the Red Cross had to fend off an attack on its bread-and-butter program of disaster relief. Minnesota Attorney General Hubert Humphrey III assailed the Red Cross for the way it solicited and handled charitable donations during and after the 1997 floods in the Minnesota and Red River Valleys. Mr. Humphrey said the charity had failed to spend $4-million in donations earmarked for flood victims.

“When people gave the Red Cross their hard-earned money, they expected it would promptly get to those whose lives were devastated by the floods,” said Mr. Humphrey.

The Red Cross said that Mr. Humphrey’s report was misleading. The charity, which has spent more than $12.4-million providing disaster relief in the area, said that it is still on the scene spending money to meet continuing needs of flood victims. “We think they have totally misunderstood our process out there,” Mrs. Dole said of Minnesota officials in an interview. “You don’t just throw all the money out the first day. It has to be done in an orderly way.”

In the end, Mrs. Dole clearly expects her legacy at the Red Cross to be one of achievement, not of controversy.

In her farewell speech, Mrs. Dole said she was proud to have restructured the group’s blood-bank program and reinvigorated its fund-raising efforts, including making sure that the charity builds up a pot of money to draw on for disaster relief. She cited her work to improve Red Cross services to the armed forces and to help the charity’s chapters raise more money while maintaining high standards of efficiency.

In her interview with The Chronicle, Mrs. Dole also pointed to her efforts to increase the number of disaster-relief workers from 3,000 in 1991 to 21,000 today, and to create a 24-hour-a-day “war room” to prepare for impending troubles by relying in part on equipment moved ahead of time to areas at risk of storms or other calamities. The Red Cross responded to more than 240 disasters last year and committed more than $160-million to help victims.

The prospect of a President Elizabeth Dole with an interest in charity issues excites many non-profit leaders. During her husband’s campaign for President in 1996, Mrs. Dole said that if she became First Lady, she would be a “pied piper” for charities, coaxing Americans to dig deeper into their wallets to help churches, humanitarian groups, and other non-profit organizations. She said she would try to increase giving by as much as $62-billion annually and try to get Americans to donate a higher percentage of their income.

Mrs. Dole may have given a hint of her future plans in a recent interview. Asked what it was like to return to the Red Cross from her leave of absence to campaign for her husband in 1996, she said, “It was great because I love what I do here. But I have to tell you, I enjoyed being on the campaign trail a lot: There are a lot of wonderful people out there.”