Red Cross in Transition Presses Forward on Major Reorganization

Interim executive Jack McGwire continues with plan to have six hundred smaller chapters report administratively to larger ones. 

The Washington Post (Jacqueline Salmon) is ahead of the rest of the press in reporting on a significant realignment of American Red Cross administration.  (But it's a measure of the lack of public interest that the announcement was made at a Red Cross convention back in May as part of a three-year old strategic plan.) 

About 600 smaller chapters of the Red Cross will report administratively to some 200 larger units.  It's called a "hub and spoke," an allusion to the system used to organize transportation & distribution systems like airlines. 

Prof. Paul LIght calls the project a "de facto form of merger," but the rest of the report suggests that it is only an administrative realignment.  Nonetheless, some smaller chapters are upset at their loss of status. 

The "community presence initiative" is part of a larger strategic plan that the Red Cross started implementing under Marsha Evans.  The Red Cross has already implemented eight service areas for its disaster services operations (as shown in this map), replacing a system in which each state had a "lead chapter" for disaster response. 

References to Red Cross organization are hard to find, but this newsletter from a small Red Cross chapter says it is a way to ensure that every community should be part of a local Red Cross unit, ideally with resources and local support in that community, or a neighboring community. 

At the same time, another chapter strategic plan "core template" (MS Word document) establishes a goal to "partner with other chapters and headquarters in order to streamline administrative back-office functions freeing up resources to focus on local service delivery." 

So the Red Cross is tackling its huge mission of universal service delivery, while trying to streamline administrative operations.  Red Cross doesn't have the option of writing off small rural areas, as would a for-profit distribution system.  And it wants every area to contribute resources locally, which usually requires a degree of local control.  Yet it is also under the microscope for its administrative costs. 

No wonder Red Cross has had trouble keeping chief executives.  Running the Red Cross is just like running a large for-profit business, only much harder. 

The Red Cross is not the first  charity to use an interim executive like Jack McGwire to implement the tough changes, so that the organization can return to an "honorary" style executive.  But the experience of the last decade says that is a perilous course.  Three things are needed:

• Congress needs to step in to restructure the American Red Cross board, which only they can do (As Mr. McGwire and Red Cross chair Bonnie McElveen-Hunter are on record as recommending, in their March letter Fixing the Red Cross: Unnecessary Roughness.)
• A national effort to develop plans for coordination of Red Cross disaster response beyond the current Level V (Red Cross response over $2.5 million).  Hurricane Katrina response would have been a Level Eight if the scheme didn't arbitrarily cut off at Five.
• Better communication of Red Cross operational initiatives to a wider community.  At least an executive summary of the Red Cross strategic plan should be available on the Internet. 

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