AMERICAN RED CROSS 1

American Red Cross

Student’s Name

Institutional Affiliation
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American Red Cross

Introduction

One of the oldest American nonprofit organizations still operating today is the American

Red Cross, which was established in 1883 by Clara Barton. When Clara Barton was a young

physician, she helped the injured on the battleground of the American Civil War, caring for

soldiers of both the northern and southern states (Hassan, 2019). Clara Barton was inspired to

contribute to other wars by offering humanitarian relief to all injured soldiers (Randal, 2022).

After Clara Barton visited Europe in the years after her involvement in the American Civil War,

she learned about the Geneva-based worldwide Red Cross organization. Barton fought for the

creation of an American Red Cross and the adoption of the Geneva Protocol to protect those who

had been injured in battle, which the US did in 1881.

Currently, the American Red Cross has 35,000 workers and almost 500,000 volunteers.

The administration of the organization is under the control of an executive committee (Carmen,

2020). The chairperson of the board, which is chosen and confirmed by the US President, is one

of the board's 12–20 representatives (Hassan, 2019). To oversee the Red Cross's administrative

operations, the board names a president and Director. The national Red Cross provides money to

all of the ARC's more than 800 local sections around the country. Local section directors are

permitted to oversee daily operations. Members of the regional governing board are proposed by

officials of the local chapters.

Natural and man-made calamities harm millions of citizens every day. The American Red

Cross (ARC), among the oldest non-profit organizations in the country, offers emergency aid,

humanitarian assistance, and assistance in natural hazards wherever they are required (Sharyl,

2017). Through its variety of programs and projects, the ARC continuously contributes to
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disaster planning, relief, and restoration with the help of volunteer groups, contributors, and staff

members. It is crucial to understand that the ARC is there not only amid and following disasters

but also before they occur. The ARC takes pride in its proactive approach to helping

communities become "Red Cross Ready." Making a plan, assembling an emergency kit, and

being aware of potential risks are all part of being "Red Cross Ready," a word used both

internally and across the organization.

Minimizing danger and hardship can be accomplished by being ready before a crisis

arises (Carmen, 2020). Knowing what kinds of catastrophes are likely to happen where you

inhabit, what precautions you may take, what to do in a crisis, and how to restore and rebuild

thereafter are all crucial. "Red Cross Ready" refers to more than just the head of the family.

Disasters will still happen despite safety precautions. Because of this, the ARC is essential to

communities (Melanie, 2021). The American Red Cross has authorization from the US Senate

that requires it to respond to emergencies (Hassan, 2019). ARC members and staff frequently

provide assistance after earthquakes, tornado, storms, or house fires, the most frequent calamity

that calls for a Red Cross intervention, even though they are not initial rescuers. Areas, where the

ARC gets engaged, are decided by local disaster management and public protection officials.

Based on the location of the disaster's epicenter, the ARC employs a 120-hour timeframe

to begin executing a plan to decide where to stage supplies, established an emergency or long-

term sanctuary, arrange food, and support essential existence requirements. The ARC adjusts its

strategies if the disaster changes (Carmen, 2020). The ARC organizes individuals and personnel

from all around the nation to assist the disaster-stricken regions. With the help of supporters,

partners, and volunteers, the ARC reacts to a disaster every eight minutes anywhere in the nation,

including storms, earthquakes, deadly wildfires, and residential disasters.

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The devotion of contributors and the ingenuity of volunteers enable the ARC, a non-

profit organization, to offer its services. The dedication and hard work of volunteer’s power 90%

of what the ARC achieves (Stephanie, 2018). An individual may offer their precious time for a

tragedy for a minute, a day, weeks, or months (Hassan, 2019). The participant decides on their

area of expertise and how they will be able to help during the catastrophe during that time.

Before and during a calamity, the ARC offers volunteers specialized, organized education

(Carmen, 2020). First aid, chest compressions, and automated external cardiac resynchronization

certifications are given to volunteers after they have completed basic training. Additionally, they

receive role-specific instruction, such as how to handle supply management, operate an

emergency accommodation, and operate disaster response equipment.

Need for Change

The Red Cross leadership experienced a significant rate of turnover throughout the first

ten years of the twenty-first era. The ARC has had eight various regular or temporary directors

since Elisabeth Dole stepped down from her position as chair in 2000 (Hassan, 2019). Due to

poor handling of the reactions to the 9/11 attacks, Chairman and Director Bernadine Healy

(2000–2001) was compelled to quit (Carmen, 2020). Similar to how Chief executive officer

Marsha J. Evans was fired after the ARC handled Hurricane Katrina poorly, her resignation was

officially cited as the result of poor board engagement (2002–2005). Between April 30 and

October 27, 2007, Mark W. Everson served as chief executive Officer. After improper sexual

contact with a staff surfaced, he was compelled to retire.

The institution's capacity to fulfill its federal purpose has been seriously hampered by this

repeated executive transition. Some dislike the excessively huge executive board. Chris Light,

the Jules Gosling Director of Government Service at Yale University, observed that the board
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"seems to assume it is a recruiting and dismissing body and does not see its duty as developing a

great Red Cross." "The continual changeover in leadership is crippling and doesn't recognize the

fundamental issue, which is decades and ages of underinvestment in communications,

equipment, and other resources to support the organization's goal," says one expert.

Potential Causes

The committee spent a significant amount of energy and expense looking for the "correct

person" in the situations of Healey and Everson, over two years and 18 months, respectively

(Mike, 2021). The ARC's practice of giving significant severance compensation to executives

who were fired, regardless of how briefly they held their positions, has further damaged the

agency's credibility. When she left her position in late 2001, Bernadine Healey earned a

compensation and retirement package of $6 million (Carmen, 2020). Heather Evans earned

$780,000 in aggregate in 2005, which included two years of severance pay (Carmen, 2020).

Diana Aviv, chairman, and head executive of Autonomous Business, a nonprofit business group,

commented on the organization's losses by saying, "The misfortune of this is that the American

Red Cross is likely the greatest nonprofit in this nation (Hassan, 2019). It's terrible and not

merely for the Red Cross when the headlines involving it focus more on administration and

management than on how it rescues lives.

Local sections are also experiencing issues with leadership. The administrator in

Philadelphia who pocketed to feed her crack drug habit and the executive in Virginia who

falsified initials on authorizations intended for disaster victims were just a few examples of

wrongdoing mentioned by Sky News in a piece on the ARC (Hassan, 2019). The Riverside

County section of the ARC in New Jersey was the scene of one of the greatest charitable scams

in history. Over $800 million in Red Cross finances were stolen by CEO Michael Lecowitch and
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accountant Teresa Escoto, who then wasted the money on gaming and presents for themselves

(Carmen, 2020). Escoto also paid at least $75,000 in compensation to herself. In 2010, an

executive in Northern California pled guilty to criminal allegations that she had pilfered at least

$1 million of the foundation's funds, even after Congress imposed modifications aimed at

eliminating such issues.

Organizational Changes/Restructuring

When Congressman William E. Johnson introduced legislation to restructure the ARC in

2006, Parliament took measures to increase the organization's efficacy and profitability. The

group was also pushed to increase transparency as a result of Grassley's initiative. The ARC

made thousands of files of formerly private material accessible to the public in 2006 (Carmen,

2020). This was the first attempt by Lawmakers to change the foundation's constitution in six

decades. By reducing the board's size by more than 50 percent, to fifteen members by 2012, the

legislation aimed to ease its problems. The President of the United States' role in appointing

board members was also modified.

The chairperson and nine board members, who were typically executive officers and

infrequent meeting attendees, were previously chosen by the head of state. Under the law, the

board proposes a head for the president's endorsement and employment (Carmen, 2020). The

board no longer accepts presidential appointees of any kind. An impartial investigator position

was established to oversee the annual disclosure to Congress and to support whistleblowers if

agency malfeasance was discovered. In February 2007, the American Red Cross amended its set

of ethical standards and behavior. The two-page document must be read and signed by all

workers and participants.

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The American Red Cross offers workers, supporters, and individuals of the public a

mechanism to express reservations or ask queries about potentially criminal, hazardous, or

unethical behavior through the "Concern Service Quality," a 24-by-7, secure, confidential hotline

(Hassan, 2019). The ARC additionally released an eight-page document titled "Integrity

Guidelines and Procedures" that describes how corporate resources, including money and time,

may be distributed and addresses issues including conflicts of interest, record-keeping, and how

to deal with media inquiries.

To accommodate electronic contributions following calamities, the American Red Cross

has worked to build the necessary infrastructures. The primary location for collecting individual

philanthropic contributions is now the ARC webpage. The company had to increase its internet

architecture after September 11, 2001, to handle increased traffic (Hassan, 2019). Following the

disaster in South Asia, the ARC was once more inundated with contributions through the

Internet. The cloud computing team was compelled to outsource some of the operations for the

growth of capabilities to businesses in the information processing sector (Carmen, 2020). In the

existence of the ARC, contributions to Hurricane Katrina victims reached a level never before

seen. Online contributors immediately exceeded the bandwidth of the ARC website.

The ARC yet again contracted some of the duty as more than 75 Internet infrastructure

team members operated around the clock to enhance capacity by a factor of eight. But using text

messaging, the American Red Cross was able to raise $15 billion for the 2009 Haiti disaster

rescue operations, with over $1.9 million coming in the first day (Carmen, 2020). To receive

millions of gifts in $5 to $10 denominations with a cap of five contributions per phone, the ARC

teamed up with a mobile services business called Mobile Peace. The texting contribution system

was promoted on a television program by both Michelle Obama and the Football Association,
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and it transformed charitable giving. Ex ARC chief innovation officer Dave Clarke thinks it

would be a good suggestion to work with different Web technology companies to address long-

term issues with website capacity needs and to stop the ARC from handling each tragedy on an

individual basis, better supporting the burgeoning online funding community.

In 2004, the ARC and the autonomous film company Lionsgate formed an innovative

marketing alliance to jointly publicize the launch of the horror movie Saw IV and raise

awareness of blood donation services (Hassan, 2019). A crucial component of the marketing

strategy for the fourth edition of the most popular horror series ever was the Saw "Give till It

Hurts" donation drive. The Saw charity drive in 2004 helped raise blood donors from 4,500 pints

to 61,000 pints by 2008 (Carmen, 2020). This rise was mostly due to these campaigns. To

promote the debut of Saw V, the Saw movie series once more organized a national donation

drive in 2008 (Jacqueline, 2017). The film's creators and the ARC benefited from these

marketing initiatives. Many strategists think that using this kind of age-specific marketing

approach along with word-of-mouth promotion is the greatest method to tap into a fresh group of

volunteering candidates.

The Red Cross emblem, which is used by the ARC to promote its identity and is

recognized over the world, had also caused conflict, as evidenced by a lawsuit brought forth by

Johnson and Johnson questioning the licensing of the Red Cross insignia used on commercial

items. Johnson and Johnson started putting a red cross on its medical packaging in 1887, and in

1908 they filed the trademarks with the U.S. Intellectual Court for commercial usage (Carmen,

2020). The International Committee of the Red Cross established the symbol in Geneva in 1863

when it determined that "volunteer nursing staff navigating battlegrounds shall wear in all

European states, as a standardized distinguishable sign, a white armlet with a red cross."
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The American Red Cross, on the other side, mentions its federal constitution from the

year 1900 as the parenthood date for its logo. It also notes that the impression was created in

Geneva in 1863 (Carmen, 2020). Over $1.5 million in sales of first aid kits, emergency supplies,

and associated goods were made by the ARC. Because of the ARC's packaging's similarity to

Johnson and Johnson's, Johnson and Johnson claimed that the ARC was profiting from people

mistaking the ARC packets for their own.

Both sides dismissed their lawsuits and court cases as part of the 2008 settlement of the

dispute (Hassan, 2019). The capacity of the ARC to highlight the accomplishments of its sister

worldwide organizations is by far its biggest marketing asset. Harassment towards women, the

aged, and the disabled in calamities is covered in a study written by the World Federation of Red

Cross and Red Crescent Organizations (IFRC). The IFRC concluded that by strengthening

disaster readiness initiatives, incidents like these—as well as sexual crimes be avoided. This

result suggests that such misuse can be diminished or stopped in the future with wider support

from philanthropic groups.

Both sides dismissed their lawsuits and court cases as part of the 2008 settlement of the

dispute (Hassan, 2019). The capacity of the ARC to highlight the accomplishments of its sister

worldwide organizations is by far its biggest marketing asset. Harassment towards women, the

aged, and the disabled in calamities is covered in a study written by the World Federation of Red

Cross and Red Crescent Organizations (IFRC). The IFRC concluded that by strengthening

disaster readiness initiatives, incidents like these—as well as sexual crimes be avoided. This

result suggests that such misuse can be diminished or stopped in the future with wider support

from philanthropic groups.

Ethical Implication
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Similar to society cultures, organizational cultures include conventions, beliefs,

traditions, and fundamental presumptions that exist within an organization. Researchers today

concur that organizational cultures are likely to affect how organizations operate. Particularly,

culture has an impact on human behavior and decision-making, which ultimately has an impact

on policies and practices (Hassan, 2019). Individuals who adhere to certain beliefs create and

uphold policies and procedures, and subjective opinions determine whether or not they are

ethically correct. The circumstance is present in ARC and is not unusual.

Ineffective management has been blamed for many of the charges leveled at ARC.

Notable features include bureaucracy in general and especially: ARC has been characterized as

monocentric, and this characteristic may have its roots in the organization's ideology. Martin's

(2012) decision-making framework will be used to illustrate how this behavior might be seen as

an ethical conundrum that is linked to ARC's corporate culture (Hassan, 2019). The model

suggests several procedures that must be done to resolve ethical issues, but aside from that, it is

an assessment tool that can assist in looking into a problem. The model's initial stage entails

identifying any ethical dilemmas and describing them.

A judgment about ARC's administration style must be made in light of this analysis.

Identifying what can be done is the next step in Martin's (2012) paradigm; various options must

be recognized and assessed based on their potential effects (Carmen, 2020). The two main

choices are to either keep using the current procedure or change it. It is important to emphasize

that there are non-monocentric philanthropic organizations, and they are said to perform better

than monocentric ones (Hassan, 2019). This suggests that moving ARC toward less centralized

methods would be the evidence-based option. Therefore, altering ARC's management procedures
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would be the ethical resolution to the stated conundrum based on Martin's (2012) model and

relevant field studies.

Observations

Numerous ethical hazards and difficulties confront the American Red Cross. For

example, executive salary, avoiding and resolving employee harassment, and taking into account

all participants in its operations strategy are typical issues for every firm of its scale. Other

hazards that are specific to the Red Cross include the open and truthful depiction of the need for

and utilization of financial donations, volunteer activities, and donating blood by the

organization. The ARC was criticized in 2012 for the manner it managed a program to assist

Hurricane Sandy sufferers' transition from temporary to stable homes.

The ARC ultimately arranged with State's Attorney Eric Friedman to give the program an

extra $6 million in compensation, despite charges that it modified the qualifying requirements

halfway through the program. The ARC also consented to making its post-natural disaster

fundraising more transparent. The ARC must be extremely transparent to preserve trust and

forestall accusations that it is improperly managing funds. Employee dishonesty has also been a

problem, ranging from employee fraud to prejudice in the distribution of disaster help. It is a

constant challenge to meet the requirements of all stakeholders, especially the hundreds of

donors to the ARC. Donors should be informed honestly and openly about the ARC's resource

allocation practices.

To act against calamities, the ARC must also preserve competent and effective

functioning as well as increase transparency of the organization's successes, setbacks, and

possibilities for development. The moral risks unique to a disaster relief organization must also

be covered by the ARC. It can be difficult to have effective and clear interactions with local and
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national government organizations. To more effectively achieve its disaster response objectives,

the ARC must create plans and strategies. These strategies must outline how to handle errors and

failures inside the organization. Regaining the faith of the nation in the ARC would require open,

truthful auditing of the organization's objectives, successes, areas for development, and errors. In

conclusion, the American Red Cross has a shareholder responsibility to efficiently and safely

carry out the requirements of its charter. The nonprofit's activities are supported by charitable

contributions, and 95% of its staff are volunteers. Managers and administrators within ARC must

be capable of managing the employees and participants. Executive management must set the tone

for changes to the ARC as a whole, then those changes must filter down to each segment of the

organization. Congress' involvement in and oversight of national, regional, and local entities

must be continuously evaluated and adjusted to meet evolving demands. It is important to

continue emergency relief collaboration with private companies to offer quick and effective

assistance to emergencies. As long as improper interactions or relationships do not jeopardize the

ARC's goal, joint marketing initiatives between the ARC and commercial companies should also

flourish.
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References

Carmen Nobel, (2020) “Donations Test Red Cross Staff.” Eweek 22, no. 37: 23. “Red Crossing

the Line.” Brandweek.

Hassan I. (2019). The American Red Cross' Disaster Protocol: The Delaware Chapter. Delaware

journal of public health, 5(4), 16–17. https://doi.org/10.32481/djph.2019.10.006

Jacqueline L. Salmon (2017), “Red Cross Gave Ousted Executive $780,000 Deal,” The

Washington Post.

Melanie Grayce West (2021), “Red Cross Pledges More Sandy Funds,” The Wall Street Journal.

Mike Spector (2021), “Red Cross CEO Shuffles Executive Ranks,” The Wall Street Journal,

http://online.wsj.com/article/SB122220688507068655.html

Randal C. Archibold (2022), “California: Ex-Executive at Red Cross Pleads Guilty,” The New

York Times,http://www.nytimes.com/2007/05/26/us/26brfs-

EXEXECUTIVEA_BRF.html?_r=1

Sharyl Attkisson (2017), “Disaster Strikes in Red Cross Backyard,” CBS Evening News.

Stephanie Strom (2018), “Firing Stirs New Debate over Red Cross,” The New York Times,

http://www.nytimes.com/2007/11/29/us/29cross.html?ref=us