The Clock's Ticking on Red Cross Overhaul
Mentality Shift Sought Before Hurricane Season

By Jacqueline L. Salmon
Washington Post Staff Writer
Tuesday, March 21, 2006

John "Jack" McGuire lives with a deadline.

As the interim chief of the American Red Cross, he has exactly 72 days until the onset of hurricane season, when changes in the organization -- forced by its uneven performance in last year's storms -- are supposed to be in place.

The giant charity has launched its biggest overhaul in decades after complaints about how it reacted to the epic hurricane season, criticism of its treatment of minority evacuees and unhappiness from Congress about how it governs itself.

In interviews last week, McGuire and Bonnie McElveen-Hunter, chairman of the Red Cross board of governors, defended the organization's performance but also outlined ambitious plans to revamp the $3 billion charity's disaster response in time for the new hurricane season.

Changes include redesigning how it gets cash to victims, partnering with more faith-based groups and revamping its system for moving supplies.

With Hurricane Katrina, McGuire said, the Red Cross's biggest sin was reacting based on its response to previous hurricanes.

"I hate to use the word 'failure' because, in fact, many of our people really did great stuff," McGuire said last week. But "we had a failure of imagination. We didn't think big enough."

As a result, McGuire, who has applied to get the Red Cross's top job permanently, has vowed to change the "we've always done it this way" mentality that prevails in parts of the 125-year-old organization.

To illustrate, McGuire waved his hand around in his office in the ornate marble Red Cross headquarters across from the Eisenhower Executive Office Building.

"Part of our culture is here in this room," he said, gesturing toward the formal furnishings, the stiff oil painting of founder Clara Barton over the fireplace and a 1951 poster advertising a Red Cross Cold War program.

Some critics are skeptical of Red Cross promises to improve, noting that it has made similar pledges before.

"It's like you're dealing with an active alcoholic," said Peter Dobkin Hall, a lecturer in nonprofit management at Harvard University. "They make all kinds of promises to change, and it doesn't happen because they're not willing to do the work."

But McElveen-Hunter said the organization is serious. "This is part of what we have to do and need to do to be more transparent and to be more open," she said.

Even if the next hurricane season belies predictions of bigger and deadlier storms, state emergency officials and Red Cross chapters that were battered last year are braced for even greater demands because they expect Gulf Coast residents to head for shelters in far larger numbers.

Red Cross chapters in hurricane country are scrambling to get ready, keenly aware that June 1, the official start of hurricane season, is bearing down on them.

"I feel like there is a huge clock that just continues to tick," said Kay Wilkins, chief executive of the Southeast Louisiana Red Cross chapter. Its New Orleans headquarters took on five feet of water during Katrina, and 15 staffers' homes were destroyed. Fourteen employees have left, and the chapter has lost 40 percent of its volunteers.

Margaret O'Brien-Molina, communications officer for the Red Cross's southwest service area, which oversees 59 chapters, is even blunter. "I feel like there is a giant bomb ticking."

In recent months, the Red Cross has been meeting with leaders of ethnic and racial communities and announcing initiatives to recruit more minorities and enlist more houses of worship for emergency shelters.

But some organizations are already disillusioned.

"It's disappointing," said Janet Murguia, president of the National Council of La Raza, a Hispanic group. "We need to see more of a commitment than, 'Oh, we can do better.' What steps are they taking?"

Red Cross official Ana Corea responded that, along with new efforts to reach out to Latinos, the organization is readying proposals to include groups such as La Raza in recruitment drives for Hispanic volunteers.

The Rev. Nelson Rivers III, chief operating officer of the NAACP, said he welcomes the charity's efforts to line up more African American churches for shelters and to train NAACP regional conferees in disaster relief.

But ultimately, Rivers said, the NAACP is waiting to see what happens in the next disaster.

"The proof of the pudding will be in the tasting," he said.

Along the Gulf Coast, chapters have started aggressive outreach efforts themselves.

The Central Louisiana chapter, which sheltered more than 14,000 Katrina evacuees, is training church members and staffers to transform churches into shelters, spokesman Kevin Gebhart said. The Archdiocese of Alexandria, La., is already on board, he said.

Beyond those efforts, Red Cross officials say that to improve their hurricane response, they need to rethink their traditional chapter structure and financing, which relies mostly on local donations and the charity's national Disaster Relief Fund.

That system works fairly well for wealthier states, Red Cross officials say. Hurricane-prone Florida and North Carolina, for example, have a combined 65 chapters and annual donations of more than $45 million.

But it hurts states such as Louisiana and Mississippi, which have a total of 24 chapters with less than $6.5 million a year.

Until now, McGuire's focus has been on overhauling the charity's main business: its long-troubled blood services unit, which provides nearly half of the nation's blood supply.

Since he joined the division two years ago as executive vice president, he has reorganized and streamlined the unit, which has been operating under an agreement with the Federal Drug Administration that strictly regulates how the business is run and subjects it to stiff penalties if problems are found.

In December, McGuire was tapped to run the entire organization on an interim basis after chief executive Marsha J. Evans stepped down. Her abrupt departure drew the attention of Congress, which was already unhappy with the Red Cross's performance after Katrina.

The Senate Finance Committee started an investigation and released internal Red Cross documents that revealed embarrassing details about management infighting.

In response to the criticism, the Red Cross will hold a "governance summit" today at its headquarters, bringing in outside experts to review its structure. And it has begun an internal audit that will take a "deep dive" into its operations, said McElveen-Hunter, who was appointed board chairman by President Bush in 2004.

Sen. Charles E. Grassley (R-Iowa), chairman of the Finance Committee, warned that the Red Cross changes need to be thorough.

"The 'deep dive' review needs to come back with more than just surface-level reforms," Grassley said in an e-mail.