In the bill and the findings included with it, Congress rejects popular notions: charity as an independent Third Sector and the value of self-appointed watchdogs.
With little media notice, Congress has approved and the President has signed a bill that restructures the board of the American Red Cross as recommended by the ARC's report on governance released last fall. The Washington Post ran an AP story, the New York Times ignored it completely. This is in contrast to the extensive coverage of the perceived failings of the Red Cross after 9/11 and Katrina.
The American National Red Cross Governance Modernization Act trims the board of the organization to twenty by 2012 and eliminates the board posts for cabinet members, who almost never attended board meetings. Instead, there will now be an advisory board of government officials that will meet with the board at least once a year. Board members will be nominated by the board, with the chapters voting on the nominees in an annual meeting.
Of note are the findings that are incorporated into the act, one of which reaffirms that the American Red Cross is an instrumentality of the United States. This finding runs counter to the tendency In recent years in media and charity circles to treat the ARC as if it were just another private charity. It also challenges the popular but largely misguided concept that charities represent an autonomous Third Sector different from private and public action. The ARC (like many other organizations) is a charity that nevertheless acts on behalf of and in the interests of the government.
The act also creates an ombudsman office in the ARC, answerable both to the CEO and the audit committee of the board, who will report to Congress on trends and systemic issues facing the organization. This approach is an implicit rejection of the idea that external watchdogs (whether journalistic or of the self-appointed variety) are sufficient to monitor an organization of the scale of the ARC. The law recognizes that accountability has to include internal resources and an insider's access as well as an explicit external reporting requirement. As we have seen, despite the scale and prominence of the ARC, both watchdogs and the media have paid scant attention to it except in times of crisis.
Perhaps Congress will eventually extent their vision to include other charities as well. A national charity ombudsman for the US (as opposed to a more heavy-handed regulatory scheme) might be an idea whose time has come.
Note: our past coverage of the American Red Cross is summarized here.