DiagnosticsRed Cross Leader Describes First-Year Triumphs, Challenges
In a speech at the National Press Club in Washington, D.C., Gail McGovern, President and CEO of the American Red Cross, described the challenges of running a nonprofit in the recession but also pointed to success in cutting the organization"s deficit by 75 percent and surpassing its goal of raising 100 million in nine months.
According to Gail, "Despite the growing bills from the storms, wildfires, floods and other disasters we could not and did not walk away. Then and now, the Red Cross will not pack up and go home as long as there is a single person in our shelters".
Read Gail"s remarks as prepared for delivery.
McGovern outlined the unusual demands thrust upon the Red Cross in her first year at the helm, a multitude of major natural disasters, the organization"s financial troubles, and the economic crisis.
"The fact is, this economy is presenting many challenges for non-profits. But it"s also providing the impetus for the American Red Cross and other non-profits to make needed and sometimes overdue changes. Simply put, there"s a greater acceptance to change in a crisis."
During the last year, Red Cross responded to eight named hurricanes, a record tornado season, the worst wildfires in California history, and flooding in the Midwest-all of which emptied its disaster relief fund coffers. The organization faced an operating deficit of $209 million. In addition, the country entered into a recession, which led more people to seek assistance at a time when fundraising has been difficult.
"These are extraordinarily difficult times for non-profits, businesses and families across the nation. I believe that if we focus on our mission, are outstanding stewards of our donor"s dollars, seek new ways to engage donors, leverage new tools and look towards the horizon, we"ll weather the storm," said McGovern. "When times are tough, the country needs us even more, and we"re committed to be at our very best," she said.
Non-profit organizations must continually demonstrate that donations are well spent. "We must be relentless in demonstrating that their hard-earned money is well spent," McGovern reported. She noted that through a strong collective effort, the Red Cross was able to drive down its deficit from $209 million a year ago to $50 million today - a 75 percent cut and $86 million better than expected.
Fundraising can be a particular challenge during tough economic times. "We fielded a combination of tactics from good old-fashioned community outreach to digital media," the Red Cross leader said. "We learned that the key was to set our sights high and try lots of different approaches", adding that these techniques had yielded $95 million in cash and $15 million in in-kind donations, surpassing the original $100 million goal.
Finally, McGovern stressed the importance of looking ahead while dealing with the daily challenges, recognizing that planning for the future is key. "Cost-consciousness is a critical element for success for non-profits, but it can only take you so far. We all need to ensure that we look toward the future to stay relevant and to grow," she said.
American Red Cross