BBB Wise Giving Report for
American Red Cross

BBB Wise Giving Report issued February 2010
BBB Wise Giving Report expires March 2012


This BBB Accredited charity meets all 20 Standards for Charity Accountability and is a Seal Holder. Find out more...


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Charity Contact Information

Name: American Red Cross
Address: 2025 E Street, NW
  Washington, DC 20006
Phone: 202-303-5000
Web Address: www.redcross.org
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BBB Wise Giving Alliance Comments

Year, State Incorporated: 1905, District of Columbia
Affiliates: Boardman Indemnity, Ltd, and 743 chapters

Stated Purpose: "to provide relief to victims of disaster and help people prevent, prepare for, and respond to emergencies."

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Evaluation Conclusions

               

American Red Cross (the Red Cross) meets the 20 Standards for Charity Accountability.
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Programs

               

The Red Cross provides services to needy individuals through its disaster, health and safety, biomedical, armed forces, international services programs. The organization reports responding to about 70,000 disasters nationwide through its disaster services program. Most of these disasters are single family and apartment home fires. The Red Cross also provides education, training and products that enable people to prevent, prepare for and respond to disasters and life threatening emergencies. Furthermore, the Red Cross collects, processes, and distributes blood and blood products. It reports providing more than 40% of the nation’s blood supply. The organization also strives to ensure that service members, veterans and their families have worldwide, around-the-clock access to timely and reliable comfort and support.

For the fiscal year ended June 30, 2008, the Red Cross's program expenses were:

  
Biomedical services 2,204,010,000
Domestic disaster services 502,216,000
Health and safety services 238,992,000
International relief and development services 191,892,000
Community services 127,450,000
Services to armed forces 57,900,000
Total Program Expenses: $3,322,460,000
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Haiti Earthquake Relief Activities

               

In less than three months, the American Red Cross reports allocating more than $108 million on food and water, shelter, and health, water and sanitation, and livelihoods. 49% of the money has been for emergency relief, which includes food and relief supplies; 40% has been for shelter; and 6 percent has been for water and sanitation and health services; and 5% for livelihoods. Together with our partners in the global Red Cross network, the organization has provided assistance to more than 1.9 million people.
The American Red Cross plans to continue to support earthquake survivors in the months and years ahead. The Red Cross plans to utilize approximately 35-40 percent of the planned spending for the recovery period for shelter. The organization has highlighted that it will initially focus on providing transitional shelter for the most vulnerable people. This includes providing emergency shelter supplies to repair homes, as well as transitional shelters that are safe and robust.
To improve the water supply and sewage systems, the American Red Cross plans to spend approximately 20-25 percent over the next several years for water and sanitation projects in Haiti.
In addition, the American Red Cross reports that its multi-year spending plans places a growing emphasis on helping families rebuild their lives through cash grants, loans and other financial assistance that they can use to buy essential items and empower them as they rebuild their lives.

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Governance

               

Chief Executive : Gail J. McGovern, President and CEO
Compensation*:
 $47,005

Chair of the Board: Bonnie McElveen-Hunter
Chair's Profession / Business Affiliation: Founder and CEO, Pace Communications, Inc.

Board Size: 18

Paid Staff Size: 34000

July 1, 2007 - June 30, 2008 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances. The CEO position was filled by Ms. McGovern in June of 2008. As a result, the $47,005 covers one month of her compensation.
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Fund Raising

               

Method(s) Used:

Direct mail, telemarketing, special events, print advertisements, television, radio, grant proposals, Internet appeals, door to door, planned giving, cause-related marketing, and membership appeals.
Fund raising costs were 18% of related contributions. (Related contributions, which totaled $782,880,000, are donations received as a result of fund raising activities.)
The Red Cross incurred joint costs of $4,000,000 for informational materials and activities that included fund raising materials. Of those costs, $2,200,000 was allocated to fund raising expenses, $1,400,000 was allocated to program expenses, and $400,000 was allocated to administrative expenses.
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Tax Status

               

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.
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Financial

               

The following information is based on the Red Cross's audited financial statements - consolidated with affiliates for the fiscal year ended June 30, 2008.

Source of Funds  
Biomedical products and services 2,118,581,000
Corporate, foundation and individual giving 411,617,000
Biomedical program materials 150,653,000
United Way and other federated 141,700,000
Legacies and bequests 115,921,000
Investment income 92,481,000
Grants 68,578,000
Contracts, including federal government 51,363,000
Contributed services and materials 45,064,000
Other revenues 8,188,000
Total Income $3,204,146,000


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Uses of Funds as a % of Total Expenses

Programs: 90%  Fund Raising: 4%  Administrative: 6% 

Total income   $3,204,146,000
  Program expenses $3,322,460,000
  Fund raising expenses 143,425,000
  Administrative expenses 218,477,000
 
Total expenses   $3,684,362,000
Expenses in Excess of Income   (480,216,000)
Beginning net assets   3,224,303,000
Other Changes in Net Assets (184,450,000)
Ending net assets   2,559,637,000
Total liabilities   1,437,643,000
Total assets   $3,997,280,000

Note 1: According to the Red Cross' audited financial statements (consolidated) for the fiscal year ended June 30, 2008, the organization received $45,064,786 in in-kind donations including services ($26,817,916), materials ($10,587,174), property and equipment ($7,078,095), and space/equipment ($581,601).

Note 2: In the above financial summary, "other changes in net assets" represents $-184,450,000 which includes unrealized investments losses ($-107,250,000) and pension costs ($-76,930,000).

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An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the BBB Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fund raising or promotional purposes.

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