Inspired by the Swiss Red Cross, Clara Barton and a few of her acquaintances founded the American Red Cross in Washington, D.C. in 1881. Chartered by Congress to be an agency which is designated to helping others, particularly in disasters and emergencies, the organization has grown to become a premier provider of assistance and relief. The American Red Cross runs independently of the United States Government and requires donations of volunteer time and money to function and be ready to help when the unexpected occurs.
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- Administrative expenses
- Fundraising expenses
- Program percentage
- Accessible financial information
- Donor communication
The American Red Cross delivers its program with a 90 percent volunteer force, which decreases the organization's administrative expenses. However, there has been some criticism that past executives have had excessive salaries. The organization spends 4.3 percent of its revenue on administrative expenses.
In 2015, the American Red Cross spent 6.6 percent of the organization's income on fundraising efforts.
The American Red Cross uses an average of 94.9 percent of its annual revenue to fund its programs. A program delivery percentage over 80 percent is considered to be a good indicator of financial responsibility.
Accessible Financial Information
Finding financial information on the American Red Cross website can be challenging. Documents are published on two separate pages, neither of which are linked to or labeled in the site menu. However, the American Red Cross has published financial data from 2006 to 2016, which is a more than what most other charitable organizations have published.
The American Red Cross has robust social media accounts which the organization uses to communicate with donors. The American Red Cross can be found on Facebook, Twitter, YouTube, Flickr, and Instagram. Donors and interested individuals can submit their email addresses for updates via email or bookmark the agency's blog for access to the latest news.
The American Red Cross was recognized by Federal Emergency Management Agency (FEMA) in 2013 for its organizational emergency preparedness efforts. The organization has also received several other awards:
- The Greater St. Louis Chapter was recognized for its partnership with the St. Louis City Office of the Disabled for its involvement in the "All Ready" campaign to help motivate persons with disabilities to prepare for emergencies
- The Mile High Region (Denver) Chapter was recognized for its partnership with local firefighters, fire departments and the Denver Public School Office of Risk Management to educate students in the Denver Public Schools about the importance of fire preparedness and safety planning with their families
- The Bay Area (California) Chapter was recognized for its "Youth for Chinese Elderly" program, which educated more than 16,000 monolingual Chinese immigrants about emergency preparedness, citizen CPR, and basic first aid skills
- Karlynn Workman, in conjunction with the Oregon Chapter and Portland-area Red Cross Club, was recognized for her "Preparedness Pals Resilience" project, which educated local elementary school students about family preparedness
- American Red Cross and HOPE Worldwide were recognized for creating the "Protecting Our Neighbors" program, a nationwide program for fire preparedness and prevention at the neighborhood level
- Total income
- Negative press
Since 2011, the American Red Cross has reported declining revenues:
- 2015: $2,726,672,619
- 2014: $2,974,133,836
- 2013: $3,296,297,562
- 2012: $3,031,937,215
- 2011: $3,342,758,035
Being the primary face of help in a disaster has its inherent challenges. Since the American Red Cross is chartered with Congress to be a significant source of relief and the organization has been trusted for over a century, the American public expects the organization to be prepared and ready at a moment's notice. When it is not, there is significant backlash. Because of this, the American Red Cross has experienced several scandals and controversies through its long history, including the following:
The American Red Cross leapt to action after the terrorist attacks on September 11, 2001. Then-president of the American Red Cross, Dr. Bernadine Healy, personally appeared in different venues, including telethons, encouraging Americans to support the victims of the attacks with generous monetary, food, and blood donations. Americans gave $547 million to the American Red Cross by October 2011 and the fund, now called the Liberty Fund, was to be distributed to victims of 9/11. However, only 30 percent of these funds reached those who were most in need. Dr. Healy determined that the funds should be used to prepare for further attacks. Survivors reported significant bureaucratic delays in receiving their assistance. The final failure by the American Red Cross post-9/11 was reported in February 2002 by the New Yorker Magazine, stating that representatives from the American Red Cross were visiting upscale apartments and distributing checks for up to three months of rent to families who were "displaced, traumatized, or merely inconvenienced" by the attacks, regardless of whether they were really in need or not. The press began coverage of these missteps and the American public was outraged. Dr. Healy resigned (with a severance of over $1 million) because of the debacle.
2006: Hurricane Katrina
After Hurricane Katrina hit the Gulf Coast, the American Red Cross again began working to bring relief. As a result of its efforts, several controversies came to light, the most severe being when 49 people working at a call center in California for the American Red Cross faced criminal charges for their involvement in schemes to help friends and family members fraudulently collect monetary assistance from the American Red Cross. The organization admitted that necessary safeguards and proper procedures were not in place to prevent this from happening, stating that in an emergency, it has little time to gather appropriate resources.
2012: Hurricane Isaac and Superstorm Sandy
Attempting to avoid the problems of past emergencies, the American Red Cross went through massive internal changes, including those involving personnel. When Hurricane Isaac was en route to landfall, the organization sent massive relief efforts to the initially-expected site of landfall, Tampa Bay, which was coincidently and nearly concurrently, holding the Republican National Convention. When the storm changed its course, the American Red Cross remained in Tampa Bay, rather than moving to Miami. Internal critics stated that this was a political ploy and a public relations display, rather than one which was designed to complete the mission of aiding those in need. Reports from Superstorm Sandy were similar. The agency was suffering a public image problem, so near-empty trucks were sent to drive around affected areas to have a presence, but aid was not offered. Full trucks were used as backdrops to press releases, rather than for distributing aid. One of those affected by the storm said that he did not see the American Red Cross until weeks after the storm had passed, but religious groups (in particular Amish and Mormon volunteers) were helping within hours.