Haiti disaster puts Red Cross CEO to the test
Tuesday, February 9, 2010
American Red Cross chief executive Gail J. McGovern was about to give a fundraising pitch to a roomful of Texas millionaires when news of the earthquake in Haiti reached her by text message.
She knew right away that this would be her first real test as chief of the renowned relief organization, which had fallen into debt and disrepute after missteps after the Sept. 11, 2001, attacks and Hurricane Katrina. But she wasn't about to abandon her talk to donors at the home of a concrete-paving magnate, an estate modeled after a French chateau.
Without "an eyelash out of place" -- as one Dallas charity blogger noted -- McGovern went on coolly with her prepared remarks, making scant mention of the disaster then unfolding. And she stayed and mingled afterward, charming the wealthy crowd with a self-deprecating anecdote about her first meeting as Red Cross chief with their home-town son, George W. Bush. (She'd burst into tears telling him that she'd dropped her kid off at college the previous day.)
In the midst of the crisis, the former corporate executive kept her eye unwaveringly on the bottom line.
If that seems unfeeling, remember this: McGovern was hired to pull the Red Cross out of a $209 million operating deficit. In her first 18 months on the job, she has managed to whittle that down to about $33 million, but she's keenly aware that there is more to do.
It was only later in the evening that McGovern was able to hole up in her hotel room and absorb the televised images of Haiti's catastrophe: the pancaked buildings, the people crushed between concrete slabs, the chaos and destruction. She worked late into the night to authorize supplies for beleaguered Port-au-Prince, the capital, and to learn the fate of the 15 American Red Cross workers who had been there. One remains missing and is believed dead.
"At the time it was a bit of shock, as you can imagine," McGovern says. "My first thought was, 'This country has been through so much.' Once I got there on the ground, it was a combination of heartbreak and absolute steely determination -- that we are going to help no matter what."
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When McGovern took over the Red Cross in June 2008, she inherited an organization in turmoil, with mounting debt and a damaged image. She was the seventh CEO in as many years, counting the interim heads. The last guy left after having an affair with a married subordinate.
Donors fled after the disorganized response to Katrina and a public firestorm that erupted when the Red Cross tried to reserve some of the $1 billion raised after 9/11 for future disasters. By 2008, the agency was so short of cash that it had to appeal to Congress for help responding to several hurricanes, and received $100 million. It continues to be cited for safety lapses in its blood-collection operation.
Since her arrival, watchdogs say, McGovern has been a stabilizing force for the Red Cross, which has a $3 billion annual budget, 30,000 employees and 700 chapters across the country. She has shrunk the deficit with a combination of belt-tightening -- including 1,000 layoffs planned before her arrival -- and reinvigorated corporate fundraising.
"All signs seem good so far," said Alan Abramson, a professor of nonprofit management at George Mason University. "She's inherited some tough challenges, including a large deficit and a brand that was hugely known but a little tarnished. It seems over the last year and a half she's begun to turn the ship around."