Red Cross looks to stop the bleeding
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BOB MOON: The Red Cross is known for being on the scene in times of upheaval and disaster, but the charity has been going through some upheaval of its own in the last several years, and still is it seems.
After 9/11 it faced a barrage of criticism over the way it set aside donations intended for victims of the attack, and since then its leaders have come and gone through a revolving door, almost a president a year. Now news emerges from the New York Times that the charity faces a $200 million deficit. It may cut as much as 30 percent of its headquarters workforce, and some other jobs around the country.
As Ashley Milne-Tyte reports, fundraising just ain't what it used to be.
ASHLEY MILNE-TYTE: The public was furious when it found the Red Cross was funneling some 9/11 donation money to a general fund, a sort of piggy bank for future disasters. Now the Red Cross promises money donated toward a particular disaster goes solely to that cause. Sandra Minuitti is with Charity Navigator, which evaluates non-profits. She says that pledge undercuts the Red Cross's effectiveness.
SANDRA MINUITTI: Because the Red Cross reacted to the donors' concerns and wishes, now they're a little bit hamstrung moving forward. They don't have the flexibility to have money for other disasters that you know happen quite regularly in all our communities, fires and other tragedies.
The charity's general fund is now low. Minuitti says big disasters galvanize the public to donate. Since Hurricane Katrina there haven't been any. Stacy Palmer at the Chronicle of Philanthropy says the charity can only partly blame its troubles on a lack of catastrophes. She says the reality is the Red Cross has done a lousy job of fundraising lately.
STACY PALMER: One of the things a lot of donors are doing is looking online for information, so they need to find ways to reach out to those donors. And the Red Cross has absolutely tried that, but they need to make more concerted efforts to find new ways to attract money.
But to do that she says you need a strong leader.
PALMER: The Red Cross has gone through so many different presidents that it really has been a problem for them that they don't have one spokesman to go out and raise money. Plus they've had trouble in their fundraising staff. They've had turnover there as well."
She says until the staffing situation settles down it'll be tough for the charity to raise more funds, and in these lean economic times staff will need all the persuasive power they can muster.
In New York, I'm Ashley Milne-Tyte for Marketplace.