On February 1, the American Red Cross announced that a $200 million deficit required staff cuts at the organization’s national office.  Headquarters has been mum about implications for local chapters, although assurances have been offered that disaster services would not be affected.

Red Cross officials say the staff cutbacks will not weaken emergency-response operations.

“I don’t believe the public is going to see much impact from these reductions,” DeFrancis said. “We’ll still be there to feed, shelter and comfort victims of disaster.” (AP/IHT)

But, is that really the case?   A few minutes of Googling pulled up this startling revelation. 

The Phoenix-based Grand Canyon Chapter of the American Red Cross has eliminated 34 positions as part of a staff restructuring to reduce the chapter’s budget by more than $1 million. (BizJournals)

Realistically, a cut of that size in a staff already was 95% volunteer, must affect services.  The continuity and institutional knowledge that career employees provided cannot be replaced simply by adding more volunteers.  Moreover, layoffs like this are “morale-dampening” said  former Red Cross CEO Bernadine P. Healy.

Although Red Cross officials acknowledge that the charity faces a “very competitive fund-raising environment,” they paint a different picture of the organization, as one that is beginning to recover from its past problems. (Chronicle of Philanthropy)

Analyses by outside experts suggest that Red Cross management is in denial.

Fund-raising problems, the September 11 flap, and the revolving door for chief executives, he says, are only the beginning of problems hurting the charity’s reputation and making it less appealing to donors. In addition, the Red Cross has been dogged by complaints from victims and relief workers over how it responded to Hurricane Katrina, as well as many other lesser disasters, and Congress last year transferred some of the organization’s disaster-relief responsibilities to government entities…. (Chronicle of Philanthropy)

When, I wonder, will Red Cross management finally get a clue?