Marketing Expert Picked to Lead Red Cross

The new president of the American Red Cross called the charity “an incredibly powerful brand” that continues to appeal to the American people despite the “hits” it has taken in recent years.

“This is a brand to die for,” Gail J. McGovern, who has been a marketing professor at the Harvard Business School for the past six years, said in an interview. “It creates a visceral reaction. When people see it, they know that help is on the way.”

Ms. McGovern was named president of the American Red Cross last week, following a unanimous vote by its 25 trustees, and will start June 23.

Ms. McGovern spent 24 years at AT&T, where she rose to become executive vice president of the consumer-markets division. From 1999 to 2002, she held high-level management positions at Fidelity Investments. She was twice named one of the most powerful and influential women in corporate America by Fortune magazine.

The top job at the Red Cross has traditionally been a plum assignment, but the nation’s largest disaster-relief organization is grappling with layoffs and a large budget deficit. Controversies over its response efforts and personal scandals have led to the resignation of five Red Cross presidents in the past nine years.

Ms. McGovern, who is 56, said that she views the Red Cross presidency as the capstone of her career and that she intends to “stay for a long time.”

“If this were going to be easy, it wouldn’t be worth moving my family, changing my life, and jumping into something new,” she said. “If it isn’t hard, it’s not worth doing.”

The Red Cross, which is based in Washington, considered 170 people for the position and interviewed 20, according to Laura Howe, a spokeswoman for the charity. Ms. McGovern will earn a salary of $500,000 and receive a signing bonus of $65,000.

Michael L. Wyland, a charity consultant in Sioux Falls, S.D., said the Red Cross seems to be focusing inward on operations with its new chief executive officer. Past presidents such as Elizabeth Dole and Mark W. Everson, he said, may have been chosen in part for their star appeal or Washington connections.

Ms. McGovern “is not a high-profile political person, and she doesn’t appear to be a celebrity,” Mr. Wyland said. “It sounds like they’re bringing in somebody who is operationally very strong.”

Ms. McGovern is a trustee of the Johns Hopkins University, and she co-chairs a campaign that initially set out to raise $2-billion for the university over seven years. The campaign is two years ahead of schedule, and the goal has been raised to $3.2-billion. She also has organized fund-raising events for Children’s Hospital Boston, Dana-Farber Cancer Institute, and the United Way of Boston.

Fritz Schroeder, a fund raiser at Johns Hopkins, said Ms. McGovern has been involved in strategy sessions on the campus and has met with potential donors who ultimately gave the university six-figure gifts.

“She’s an inspiring leader,” Mr. Schroeder said. “We literally drag her around the county to different regions where we don’t have people like Gail McGovern.”

The Red Cross faces a budget deficit of $200-million and recently laid off 1,000 employees in its national and regional offices. The organization has been hurt by its inability to raise significant money during times when no major disasters have attracted attention to the charity.

Bonnie McElveen-Hunter, chairman of the Red Cross’s board, said the board voted unanimously to hire Ms. McGovern because it believed her marketing and fund-raising experience would help the charity find a solution to that problem.

“A CEO recently came up to me and said, ‘We’ll be there for you during the next disaster,’” Ms. McElveen-Hunter said. “My response was, ‘We may not be there, unless we can sustain the organization through the times when we don’t make the front page in response to a disaster.’”

Ms. McGovern said her first priority would be to educate the public about the Red Cross’s role in everyday activities, such as handling the nation’s blood supply, teaching first aid and CPR, and responding to small fires at homes and apartments.

“Too often people think of the Red Cross only when there’s a national disaster,” Ms. McGovern said. “We help people every day at the grass-roots level. When more people understand what the Red Cross does for this country, they’ll open up their minds and hearts and hopefully become financially active with the Red Cross.”

Disaster Fund Raising

The Red Cross has always raised significant money following high-profile disasters, but nearly all of those funds go to the recovery effort and can’t be used to prepare for future disasters. That policy was adopted after the 2001 terrorist attacks, when controversy erupted over its plan to use some of the nearly $1-billion raised to prepare for possible attacks elsewhere, a decision it later reversed.

Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, which has held hearings on the Red Cross, said Ms. McGovern has an “impressive” résumé and that it will be important for her to continue to work to regain the trust of donors.

“Her experience with fund raising shows she’s been able to persuade donors of the worthiness of her cause and gain their trust,” Senator Grassley said. “That’s very important at the Red Cross, which alienated some donors after stockpiling donations after September 11 instead of using those donations to help victims.”

Ms. McGovern said she is confident in her fund-raising ability even though her prior experience all came in a volunteer capacity. “If I have passion around the mission of an organization like I do for the Red Cross, I’m not shy,” she said. “I know how to make the ask.”

Ms. McElveen-Hunter said the Red Cross was unlikely to announce a major new fund-raising campaign anytime soon.

In 2007, the charity started the Tiffany Circle, a society of women leaders who give $10,000 per year to the Red Cross. The Red Cross raised $3-million through the program in 2007, exceeding its $1-million goal. This year, the goal has been raised to $6-million, and 87 percent of the 2007 participants have renewed their gifts.

She said she expects the Tiffany Circle to become a $100-million annual campaign within a decade.

“You have to start somewhere,” Ms. McElveen-Hunter said. “It’s better to start with successful models that are small than to roll out a whole new campaign.”

Cutting Costs

Ms. McGovern said she would look to continue cost-cutting at the Red Cross by overhauling the charity’s infrastructure, although she doesn’t anticipate any additional layoffs. She also said she would work to ensure that the charity’s blood collection and distribution business handled the nation’s blood supply in a “flawless manner.” The charity has faced fines from the federal government for procedural failures that have endangered public health.

Ms. McGovern received a bachelor of arts in quantitative sciences from the Johns Hopkins University in 1974 and later earned a master’s degree in business from Columbia University.

The charity’s search for a new president was concluded in less than five months. It took the Red Cross 16 months to find Mr. Everson, after Marsha J. Evans resigned in December 2005 amid criticism of the charity’s handling of Hurricane Katrina. Mr. Everson had been on the job for just six months before he resigned in November 2007, when the board found that he had had an affair with the head of a Red Cross chapter in Mississippi.

Mary S. Elcano, who has been serving as the Red Cross’s acting president, will return to her position as the charity’s general counsel and corporate secretary.

The Red Cross announced last month that Jeffrey T. Towers, a veteran fund raiser, will become chief development officer for the organization. He was previously a top fund raiser at the U.S. Fund for Unicef, in New York.