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Recession, fires: double trouble for the Red Cross

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Posted: February 15, 2009 12:56 a.m.
Updated: February 15, 2009 12:55 a.m.
Recession, fires: double trouble for the Red Cross

In this Sept. 1, 2008 file photo, Edward Varnado, 7, of Hammond, La., rests on one of the cots provided by the Red Cross at the Frank Cochran Center in Meridian, Miss., while Jacob Hays, 5, of Houma, La., sits on the other end. Families from the coastal areas evacuated from Hurricane Gustav and found refuge at the center, one of several locations set up by the Red Cross to help out with the storm.


NEW YORK — The worsening recession, coupled with a seasonal surge of house fires, has depleted the resources of many American Red Cross chapters as they struggle to meet rising demands at a time of dwindling donations.

Red Cross staff have been laid off in San Diego and Long Beach, California; in western Oregon; Minnesota's Twin Cities, Tampa, Florida, and elsewhere. Office hours have been cut back, salaries trimmed, training programs scrapped.

The small Southwest Georgia chapter, based in Albany, Georgia, has turned down the heat in its office to save money as contributions have fallen by more than 60 percent from the previous year.

"We're wearing thicker socks and more sweaters," said the chapter's executive director, Mari Wright.

However, Wright, like her counterparts running other hard-pressed chapters, voiced determination to maintain core disaster-response services in her economically distressed 11-county region.

"We cannot not be here," she said. "People look to us."

With the Red Cross fiscal year not ending until June 30, there are no overall statistics on the finances of its more than 700 chapters. But Suzy DeFrancis, chief public affairs officer at the national headquarters, said the financial woes are "pretty universal"

"Every chapter is finding this a challenging environment," she said.

The national operation, which relies on the chapters to raise their own funds, has notable challenges of its own. Faced with a deficit that peaked at more than $200 million, it laid off one-third of the 3,000 employees at its Washington headquarters last year and made an unusual appeal to Congress that produced a one-time, $100-million infusion for its disaster relief program.

DeFrancis said the Red Cross is convinced its ability to cope with major disasters is undiminished, but it does not allocate money to help the chapters with their local operating budgets and instead is helping them find cost-cutting steps that leave emergency services intact. Some chapters have merged; others are working together on marketing and fundraising.

While many nonprofits have suffered a drop in donations, the Red Cross's circumstances are unique in some respects.

Chapters consider two core services — disaster response and emergency communications assistance for military families — to be congressionally mandated obligations they must meet regardless of other factors. And recent months have taxed many local chapters with an unusually high number of house fires, often linked to unorthodox heating methods used by financially ailing families as bitter cold enveloped much of the country.

House fires account for the vast majority of the roughly 71,000 local disasters that the Red Cross responds to annually. No chapter, no matter how low its financial reserves, wants to cut back on the assistance routinely offered to families made homeless by such fires — temporary lodging, clothing, rent money and other essentials.

Jim Love, executive director of the Wayne County chapter in upstate New York, said his disaster services budget for the full fiscal year had been $20,000, but $35,000 already has been spent responding to a spate of fires — 14 in January alone. They followed five earlier fires that affected multiple families in apartment complexes.

Some were caused by portable heating units, and one was linked to a family using candles for heat, he said.

Other chapters reporting tight budgets because of heavy fire-response work include the Greater Kalamazoo chapter in Michigan; the Pine Tree chapter based in Bangor, Maine; the Covington County chapter in Alabama; the Southern Alleghenies chapter based in Altoona, Pennsylvania; the Big Sandy chapter based in Prestonburg, Kentucky, and the Pikes Peak chapter based in Colorado Springs, Colorado, which says this is the busiest fire season in its 97-year history.

Big Sandy officials warned publicly they might have to close down because of insufficient funds, but won a reprieve at least until June thanks to a radio marathon that raised more than $27,000.

For other chapters, the fiscal crunch is due mainly to decreasing donations. Many will try to reverse the tide with their annual fundraising drives that start Sunday.

Judy White, head of the Lenoir County chapter in eastern North Carolina, said volunteer training and public education programs had been cut back while she and her colleagues seek $60,000 to balance their budget by June.

In Minnesota, the Twin Cities chapter has laid off 15 employees and cut back on a program giving elderly and poor people free rides to medical appointments. The Tampa Bay chapter recently laid off 22 people — nearly half the staff.

Several chapters taking serious cost-cutting steps are on the West Coast.

The Greater Long Beach chapter in California has laid off two employees, reduced some full-time staff to part-time and cut salaries for remaining staff by 1.5 percent. The chapter's CEO, Nancy Kindelan, said it's the worst financial crisis during her 11 years in the job.

"It was shocking to me, the other day, when only one check came in the whole day," she said. "I don't remember a day like that."

She and her counterparts are working with national Red Cross officials to trim costs, avoid closures of chapters, and preserve disaster response services.

"We're committed to making sure that, while it's tough for the Red Cross, it's not tough for our clients," Kindelan said.

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