Repairing the Red Cross

KAI RYSSDAL: From Clara Barton on down, the Red Cross has a history of helping others. Too often recently, though, it hasn't been able to help itself. Nothing malicious. Mostly mismanaged. That's hurt public confidence. So today the Red Cross promised to change. Helen Palmer reports from the Marketplace Health Desk at WGBH.


HELEN PALMER: Critics say after Hurricane Katrina the Red Cross didn't cooperate with other charities, and it lost relief cash to fraud and disorganization. So the venerable charity sought advice from outside governance experts. Stacey Palmer, editor of the Chronicle of Philanthropy, says making the board smaller is a key reform.
STACEY PALMER:"One of the things that's been so unwieldy about is that they have 50 people around the table trying to make decisions. And that's a big problem. So that's probably the most important one".

Palmer says in future political appointees on the board will have less sway. Bennet Weiner of the Better Business Bureau's Alliance for Wise Giving approves that change of focus and other reform plans.

BENNET WEINER:"They've also announced their intention to take other reform measures such as improved whistle-blower processes so that problems or concerns out in the field can be communicated to them more effectively."

Weiner thinks these reforms will lead to renewed confidence in the Red Cross brand. Stacey Palmer says that's important. Reports of incompetence or worse at an institution that's synonymous with charity have hurt fund-raising overall.

PALMER: It certainly has been challenging for all organizations. They've been affected by the fact that there's lower confidence in the Red Cross. So it's important to all nonprofits that the Red Cross take steps to reassure the public that it is trying to use its donations as well as possible.

The Red Cross is chartered by Congress, so lawmakers will have to sign off on the changes. And that could take months or years.

I'm Helen Palmer for Marketplace.

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