National Press Club

Red Cross President Offers Tips for Non-Profits

July 23, 2009 | By Hope Katz Gibbs | hope@hopegibbs.com

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When Gail McGovern took over as president of the Red Cross in April 2008, the former vice president at AT&T and Fidelity Investments had no idea she’s have to deal with the aftermath of eight hurricanes and tropic storms, a record tornado season, and the worst flooding in the Midwest in 15 years.

She did know that she was inheriting a $209 million operating deficit, a mandate from to eliminate it within two years, and that she was the 10th person to take the helm of the PR-challenged agency in the last decade, she told an NPC Luncheon July 21.

Yet, the Harvard marketing professor — who since 1998 has twice been named one of the “50 Most Influential Women in Corporate America” by Fortune magazine — said she isn’t complaining.

“I pinch myself every day because I feel so fortunate to serve in this remarkable [128-year-old] institution.”

McGovern credits the downturn in the economy for giving many non-profits, especially her own, the impetus to make “needed and sometimes overdue changes. “

She suggested five ways that non-profits can successfully survive turbulent financial times.

  1. Have a monomaniacal focus on the agency's mission and on the people it serves. “As leaders of non-profits we must make every single decision through the lens of our respective missions,” McGovern said. “The country depends on us to do so. We need to look at everything we do and every dime we spend, and eliminate all extraneous activities that don’t support the people we serve.”
  2. Be better stewards of donors’ dollars. “This has been one of my main areas of focus,” she said, noting the organization recently laid off 1,000 employees and 350 in the field of their total staff of 33,000 employees. That, along with other cutbacks, has enabled McGovern to cut the organization’s deficit by 75% — to $50 million.
  3. Find new ways to raise money and engage donors. McGovern said in September 2008, in the heart of hurricane season, she launched a $100 million fundraising campaign to replenish the Red Cross’ depleted disaster relief fund. She surpassed that goal within nine months.
  4. Embrace new tools. McGovern said this is critical but easier said than done. “While the nightly news and newspapers are important ways for people to get information, more and more people of all ages are getting immediate information from the web and their cell phones. Non-profits have to embrace new forms of media, and while this may seem like a statement of the obvious, pause for a moment and remember that we’re a big, 128-year-old institution. Don’t underestimate the massive change in mindset that this requires.”
  5. Keep looking to the horizon. “I recently met with senior leaders from our major U.S. chapters and asked them to generate ideas that would enable the Red Cross to prosper and grow to 2020. Their ideas were creative, exciting, wacky, and truly showed out of the box thinking. The exercise has me thinking about forming a futurist think tank composed of volunteers.”

McGovern also said that one of her most memorable days on the job was when she flew to the disaster site after Hurricane Ike struck Houston in September 2008. She helped serve chili to the thousands of people that had been displaced from their homes.

“We first went to a giant kitchen that has the capacity to make 45,000 meals and elderly men with giant biceps lifted vats of chili into a big van. Then we drove to the site, and I had no idea how the people would know we were there, but I was assured they’d know. Within 10 minutes, there was a line that stretched for blocks because we were bringing the first hot meal these hurricane victims had since having their lives upended. We dished out that chili for hours, and I never before felt like I was making such an incredible difference. I have the best job in the world.”

When asked if she’d welcome embedded reporters at disaster sites, the Red Cross president said she’d be happy to have them. “I actually think our disaster sites would make a great Reality TV show.”