Red Cross Has Cut Deficit, Met Fundraising Goals, Official Says

By Susan Kinzie
Washington Post Staff Writer
Wednesday, July 22, 2009

The president of the American Red Cross said Tuesday that over the past year, the organization has been able to dramatically cut its deficit and exceed fundraising goals, despite the recession.

Gail McGovern, president and chief executive of the Red Cross, said the nonprofit agency's deficit was cut to $50 million from $209 million a year ago.

The Red Cross cut more than a thousand jobs at its headquarters and more than 350 positions elsewhere across the country, scaled back raises and benefits and reduced expenses, including renting out space at its main office, McGovern said, and plans to balance its budget next year.

Over the past nine months, the agency surpassed its $100 million fundraising goal with $95 million in cash and $15 million in in-kind donations, McGovern said at an event at the National Press Club.

McGovern took over last year at a time when a series of missteps and management problems had eroded public confidence in the District-based charity. Last summer, for example, federal regulators fined the Red Cross for continued failures in managing the country's blood supply.

"There were a lot of false starts to getting the house in order," said Alan Abramson, a professor of nonprofit management at George Mason University. "The new administration seems to have brought some stability over the last year, seems to be working at addressing some of the issues. That's got to be part of the story in the rebound in fundraising."

McGovern said the organization had stayed on mission, and that had restored public confidence. It also found new ways to raise money, including working with the digital media company that raised funds for the Obama campaign. "Our goal is to not only raise money episodically during a disaster, but to ensure that we have the funds to respond before a disaster strikes," she said.

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