If you ask Americans to name an aid or relief organization, more likely than not, the first one that comes to mind will be the Red Cross. The name, organization and eponymous logo are ingrained in the history and culture of America. American Red Cross (ARC) has a long history of providing aid and comfort to those in need if and when disaster strikes. Polling data from 2005 showed that 62 percent of Americans had a very positive view of the ARC, with 21 percent holding “somewhat positive” views. The Red Cross logo is synonymous with aid efforts here in the states and abroad.
Hurricane Matthew has left the U.S. eastern seaboard and dissipated over the Atlantic as of October 12. The storm has left over 1,000 people dead, predominantly in Haiti. There has also been an unprecedented level of flooding in certain areas of the Southeastern U.S., especially around rivers and coastal areas. In times of crisis such as these, aid organizations are usually ready to step in, with American Red Cross assumed to be at the forefront. Yet, in recent years, the American branch of the Red Cross has left a strong sense of doubt among civilians in the ARC’s ability to perform its functions. Scandal after scandal has rocked the organization, and many have been critical of the validity of its efforts over the course of multiple disasters. The question that the American people now seem to face is, can the American Red Cross be trusted to come to their aid anymore?
A Series of Unfortunate Disasters
Unfortunately, American Red Cross has left a lot to be desired in recent years with their responses to several major disasters on the national and international levels. In the wake of 9/11, the ARC was criticized for its minimal involvement in relief efforts. It was also criticized for its management of donated funds. The ARC’s Liberty Fund, which was set up in response to the attacks, raised over half a billion dollars. Of that amount, nearly half was earmarked to be used for future events and contingencies. However, the decision was reversed after public outcry and political scrutiny arose.
The ARC’s woes did not end after 9/11. Its involvement in relief efforts following Hurricane Katrina in 2005 was criticized as unorganized and insufficient. The ARC’s involvement in the wakes of Hurricane Isaac and Superstorm Sandy followed a similar pattern. According to a ProPublica and NPR report, the Red Cross ordered empty aid trucks to simply drive around in order to give the impression that something was being done. Other ARC vehicles were used as props in the background of press conferences. This was coupled with a laundry list of incidents of mismanagement, mistakes, and misappropriation of funds.
The most damning case of all emerged in the years following the massive earthquake that hit the country of Haiti in 2010. Millions of people donated to the ARC, raising nearly half a billion dollars. According to a report by NPR however, no one can accurately account for the whereabouts of those funds or how the Red Cross distributed them. One particularly egregious example was a multi-million dollar project to build thousands of housing structures in an impoverished area. The result was a mere six houses being built. Internal Red Cross documents point to cases of mismanagement, ignorance, and even outright incompetence during the Haiti response. Additionally, the ARC continued to smear its reputation when it refused to be transparent regarding finances and show how the money raised was spent.
Bringing in New Blood
It’s not unheard of for a non-profit organization to hire someone from the for-profit world to manage its affairs. In 2008, Red Cross did just that, bringing in Gail McGovern, a former executive from AT&T and Fidelity Investments, as well as a former Harvard Business School professor. McGovern pledged to turn the organization around and reportedly brought in other colleagues from AT&T in order to help save the organization from dire financial straits. Payrolls and budgets were subsequently cut, and many local Red Cross chapters were closed. In 2013, McGovern announced that Red Cross was financially stable. However, according to ProPublica, the ARC posted a deficit of $70 million in 2014.
A (Possible) Solution?
The U.S. Senate is currently debating a bill introduced in the wake of reporting done by ProPublica and NPR on the Red Cross’ mismanagement. Senator Chuck Grassley, R-IA, introduced the American Red Cross Transparency Act in July of 2016. The bill would essentially change the congressional charter of the ARC and open up its records to scrutiny by the Government Accountability Office. With the recent revelation in 2015 that Gail McGovern attempted to lobby a member of Congress to kill an investigation into the ARC, more transparency may be needed to help restore the public’s faith in the organization.
The ARC is an organization that can only function with its reputation intact. Donors will not contribute financially if they feel that it will be squandered or wasted. Trust is difficult to earn, easy to lose, and harder to win back. As the Earth continues to warm due to climate change, the effects will be felt more as flooding and storms increase in intensity. Individuals will need to depend on organizations like the Red Cross to provide essential aid in what will likely be more and more frequent damaging disasters. For an organization so dependent on the financial support of the public, the Red Cross cannot afford any further damage to its reputation. The individuals who will depend on the Red Cross can’t afford it either.
Image source: AP Photo/Tom Hood