National organization faces $250 million deficit
A national financial problem with the American Red Cross is having a local impact.
The disaster relief organization is running a $250 million deficit, explained Terry Hackney, executive director of the Blue Mountain chapter in Walla Walla. “The upshot is, nationally, we’re trying to be more efficient about delivery of services.”
Creditors told national leaders “you need to get your house in order,” Hackney said. “So American Red Cross is changing the way it does things and live within its means. We see it happening everywhere in the nonprofit sector.”
One problem stems from being too top-heavy in administration across the board, he said. Every chapter has been forced to streamline “back office” functions. In Walla Walla that means Hackney’s hours are reduced to part-time and running the chapter is more dependent on volunteers.
“The American Red Cross is responding to the economics of these times. It’s painful. But I’ve been here seven years and we’ve done a great job of building up the volunteer base here,” he said.
“There is a really good core of people invested in making this Red Cross work. We’re getting back to the mindset of a volunteer organization.”
The public should notice little to no difference in disaster relief services, Hackney predicted.
Other changes will be felt. One thing the national agency discovered is that curriculum and fees for standard classes, such as CPR, looked different across the country, even within the same state.
That’s been addressed and Walla Walla will see a rise in the cost of taking lifesaving classes. The CPR class was $30 for a one-year certification; now it’s $90 for a two-year certification on the national fee schedule, Hackney said. “It’s sticker shock for people locally. I think we all recognized that was going to happen. We knew $30 per student didn’t cover our costs. It was a drain on our chapter.”
The standardization, while more expensive for now, will be a benefit to students, he said. “My analogy is McDonalds. No matter where, if you order a Big Mac, you expect a Big Mac.
“If you go into a chapter and want a CPR class, whether Walla Walla or Seattle, it should be the same product. And it wasn’t.”
And while the agency has decided to consolidate the 3,000 or more bank accounts set up for local chapters, donations dedicated for use in Walla Walla will be only used here, Hackney said. “Because all our services are delivered locally, regardless of where the money is being housed. We’re still going to be the face of the Red Cross. We’ll still be here.”
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