12/14/2005 03:51 pm ET | Updated May 25, 2011

The American Red Cross: Eating Their Young

The American Red Cross, for so essential an institution, has a disturbing and decades-long history of sacrificing its presidents for the failures of its own governing board and its overseers and paymasters in the US and 50 state governments. It fired its presidents after the San Francisco quake, the 9/11 debacle and now after hurricanes Katrina and Rita—all of which exposed it to public anger and ridicule.

Retired Navy Admiral Marsha Evans was shown the door to “spend more time with my family”, in effect trading a $654,000 a year high profile job for a $60,000++ Navy pension. Its board has denied any link between her leaving and the new Congressional hearings on the Red Cross’ incompetence in a major disaster. La plus ca change!

As we now know, the American Red Cross—unlike its foreign counterparts in many countries--does not rescue, does not medicate (other than light first aid), does not fund non-Red Cross community organizations in local areas when it has the kind of “spare change” it’s had recently (think tens of millions of dollars to over $1 billion in the case of 9/11); and it sells donated blood for upwards of $2 billion a year while its disaster response fields an army of fund raising staff whose mastery of the Internet and other media swamps all other nonprofits as it relentlessly seeks to acquire all of the public’s compassionate cash donations.

Who has oversight responsibility for the American Red Cross beyond its bloated 50*-member board? Well, Congress appropriates the money FEMA and the Defense Department pay the Red Cross at the federal level. Local and state governments mobilize the Red Cross after declared local and state disasters, for which the Red Cross is reimbursed for most (but not all) of its out of pocket costs. United Way in many American communities gives the Red Cross between 20-30% of its gross take during the annual United Way campaign in return for Red Cross not doing local fund raising in its own name for several months a year. Easy money in any circumstance.

That Congress, the executive branch and United Way have not performed due diligence is reflective of the Red Cross’ brand being the world’s best known symbol. Perhaps each of us has a primal need to give to them in the event we ourselves are someday in need of a cot, a doughnut and tea and sympathy.

The numbers horrify the other relief agencies and non-US Red Cross and Red Crescent organizations: $568 million collected for last December’s South Asia tsunami, with $401 million still left in the bank after $133 million was dumped on the World Food Program ($50M) and $83M more to the United Nations Foundation (the one set up to handle Ted Turner’s $1 billion 10 year commitment, as opposed to operating UN agencies). It sent just $5 million to the Int’l Federation of Red Cross and Red Crescent Societies (which is supposed to get most of what national Red Cross societies raise so it can distribute these to the local Red Cross/Red Crescent groups in the 11 nations of the tsunami zone)…and maybe…maybe…. $25-30 million or so in direct American Red Cross programs for the 1.8 million tsunami victims without housing, health care and livelihoods.

To recount its 9/11 performance would be unfair because there was nearly no activity for Red Cross to do as the World Trade Center was a crime scene (ergo, no missing persons tracing was done outside the FBI’s and NYPD’s roles), few were made homeless so its shelters stayed empty for the couple of days they were open, and the rest—grief counseling, etc.-- was done well but in a limited fashion. Nevertheless over $1 billion came in from an unsuspecting, uninformed public and the Red Cross never said otherwise. Retired US Sen. George Mitchell (D-Maine) came in at the invitation of its mostly GOP-run board to kick the funds out the door in what resulted in a haphazardly done fiasco (e.g., limo drivers got nearly $30 million if they merely attested to losing fares at the World Trade Center).

One can go back through Red Cross history to the 1927 Mississippi River floods and its treatment of Mississippi’s black population, but that would only embarrass them as they have yet to seriously recruit and train black (or Spanish-speaking) volunteers in significant numbers as the Washington Post pointed out just 2 weeks ago.

The American Red Cross needs an extreme make-over. It runs as poorly and with the same lack of creativity as General Motors and FEMA. It needs new policies allowing it to share the burden of its quasi-public responsibilities with other large relief agencies who do America’s best work in mass disasters abroad; it needs to fund nonprofit community organizations who better understand the communities in which they live; its needs to share its treasure with better organized and run Red Cross societies in other countries who really do a great job in mass disasters; it needs to get straight with the American people about its $2 billion in annual blood sales income and spin off its Biomedical Services division as a for-profit company separate from its disaster relief programs; its Congressional Charter needs revision either more explicitly putting it in the matrix it already occupies (but carefully conceals from donors) as a reimbursed First Responder in declared disasters or it should be forced to compete for government contracts against other large nonprofits; and, it needs to calibrate its fund raising with its ability to program those funds.

A shoddy report card, year after year after year.

*Ed. Note: This article has been corrected. It originally described the Red Cross board as having "85+" members.