Case Study: American Red Cross

International Business & Economics Research Journal

Volume 3, Number 1

American Red Cross
Debora J. Gilliard (E-mail:, Metropolitan State College of Denver, USA Rajendra Khandekar (E-mail:, Metropolitan State College of Denver, USA

Abstract The American Red Cross has been plagued with problems over the past two years from an antitrust lawsuit, repercussions from the distributions of funds from the Liberty Fund to the survivors of the World Trade Center disaster, problems with donated blood, a negative report from the Better Business Bureau, and a negative news report on CBS’s ’60 Minutes’. This case study looks at the history of the Red Cross, provides information about the services provided by the organization, discusses the problems the American Red Cross has encountered over the past 3 years, and introduces Marsha Evans who took the position of CEO in August 2002.

1. Introduction


s Marsha „Marty‟ Johnson Evans took the helm of the American Red Cross on August 5, 2002, she was faced with the challenge of restoring the public‟s faith in the organization. During the past 24 months, there has been a barrage of negative publicity regarding the American Red Cross. In June 2000, workers at the American Red Cross went on strike. The organization was hit by a lawsuit filed by HemaCare Corp. and Coral Blood Services in January 2001. The plaintiffs alleged that the American Red Cross engaged in unfair trade practices in the pricing of blood. The Better Business Bureau made false public statements about the ability of American Red Cross to meet their standards for charitable solicitations. Then on September 11, 2001, Americans watched in horror as terrorists flew two planes into the World Trade Center buildings. In the aftermath of this tragedy, donations poured into the American Red Cross, and a special fund – the Liberty Disaster Relief Fund – was established by the then American Red Cross President Bernadine Healy. When it was announced that not all donations would be used for victims of the 9/11 disaster, there was a huge public outcry from donors. Dr. Bernadine Healy was forced to retire, and interim CEO Harold Decker announced that all donations to the Liberty Disaster Relief Fund would be used in the organization‟s 9/11 relief efforts. Finally, on March 10, 2002, 60 minutes, a CBS news show, ran a misleading and inaccurate story about the American Red Cross. On June 27, 2002, Marsha Johnson Evans was named new CEO and President of the American Red Cross. At the time of this announcement, Evans stated: “This is a time of great challenge for many charitable organizations including the American Red Cross. One the one hand, we need to motivate Americans to donate their time and their treasure, which is never easy, but always comes down to whether they trust an organization and believe in their work. On the other hand, we face a host of challenges including the need to better prepare this nation for disasters both natural and man-made; as well as the rigors of furnishing a safe and available blood supply with all the costs and complexity this involves.” [9] 2. American Red Cross in 2002 Henry Dunant set forth the idea of the Red Cross in 1859 when he saw wounded and dying soldiers on the battlefield in Solferino, Italy. He organized local people to bind the soldiers‟ wounds and to feed and care for them. Henry Dunant called for the creation of a national relief society and this pointed the way to the future Geneva Convention. In 1863, in Geneva, Switzerland, the International Red Cross was created with the purpose of providing nonpartisan care in times of war. The Red Cross emblem was adopted as a symbol of neutrality although today the Red Crescent is also a recognized symbol. Today the Red Cross incorporates the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies as well as National Societies in 175 countries....
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