Red Cross Needs to Make More-Extensive Changes

To the Editor:

Your article on changes at the Red Cross (“Pulling Back the Reins,” November 9) makes clear the relative narrowness of the changes proposed in the operation of the American Red Cross.

Restructuring the American Red Cross board is long overdue but this does not begin to address the wider range of problems the American Red Cross created for itself — and not just since September 11, 2001.

Some of these problems date back to the major Mississippi floods in 1927. They have repeated themselves and in fact have gotten far worse.

Here we are in 2006 with well over one million U.S. nonprofit corporations. Despite the exponential growth — for good and ill — of the nonprofit sector, the American Red Cross has kept far ahead of the pack in fund-raising technology and entrepreneurship but lagged woefully in programming the billions of dollars it raises.

Nowhere in this article on the American Red Cross is there an indication of change in the American Red Cross’s hands-off policy vis-à-vis other nonprofits, especially those in areas affected by a particular disaster.

Acting Red Cross president John McGuire has in fact mentioned the need to work more collaboratively with locally based community and nonprofit groups, but this needs to be stage-center when discussing matters like board restructuring.

Diminishing board representation of powerful chapters around the United States means they will be less able to wall off other local nonprofit groups that can be of invaluable support in a post-disaster environment.

Since the chapters are responsible for fund raising, the more powerful ones may bridle at having to share funds with other local groups. Hurricane Katrina is a case in point as to why small, locally based groups (including local Red Cross chapters) are more appropriate players in disaster response.

The Red Cross’s Biomedical Services division reports over $2-billion a year in income from the sale of donated blood and its byproducts. The charge to the U.S. health-care system for blood has a major impact on hospital and health-insurance costs. What this has to do with philanthropy has long escaped most knowledgeable people and this division of the Red Cross should be formally split off from the disaster-relief and community-service mission of the American Red Cross. Bigger isn’t better and there is little “profit” (e.g., “surplus”) in keeping this function central to the American Red Cross’s mission.

These and other criticisms of the American Red Cross have mounted over the years and have made the current Red Cross one of the least popular relief agencies among its peers. An aggressive posture regarding its critics has made it even less popular.

This is a shame since the idea of an effective American Red Cross is worthy of support from all of us.

Richard M. Walden
President and Chief Executive Officer
Operation USA
Culver City, Calif.