The following is a conversation between Gail McGovern, President and CEO of the American Red Cross, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.
Denver: There is nothing on this show I enjoy doing more than taking an organization that we are all so familiar with, but don’t really fully understand or appreciate, and learn about their challenges, all that they actually do, and how they go about doing it. And there may be no finer example of that than the American Red Cross. And it’s a great pleasure to have with us this evening their president and chief executive officer, Gail McGovern. Good evening, Gail, and welcome to The Business of Giving.
Gail: Thank you so much, Denver. I really appreciate being on your show. Thank you.
We have a federation that coordinates us. So, if there’s a disaster in an area that’s too big for one country to handle, the federation will help us figure out who needs to help and what sort of help they need to give. There is also the Committee of the Red Cross, the International Committee of the Red Cross. Their sole purpose is to ensure that humanitarian law is in effect. They go behind enemy lines. They make sure that prisoners of war are being handled appropriately, and together, it’s probably the largest humanitarian movement in the world.
Denver: It seems the Red Cross has just always been there, and it has touched so many of our lives at one time or another. But share with us some of the history of the organization and a few key milestones along the way.
Gail McGovern
Gail: The American Red Cross was founded by Clara Barton in 1881. Most people don’t know this, but there are 191 Red Cross societies around the globe. I have 190 counterparts. In addition to having this robust network of national societies, we have a federation that coordinates us. So, if there’s a disaster in an area that’s too big for one country to handle, the federation will help us figure out who needs to help and what sort of help they need to give. There is also the Committee of the Red Cross, the International Committee of the Red Cross. Their sole purpose is to ensure that humanitarian law is in effect. They go behind enemy lines. They make sure that prisoners of war are being handled appropriately, and together, it’s probably the largest humanitarian movement in the world. There are 19 million volunteers, all told.
…about a quarter of the people in our country think we are an agency of the Federal Government. But all of our funding comes from private individuals, corporations.
…it is by law our responsibility to give mass care and feeding during a disaster…
Denver: Wow, that’s astounding. And the relationship that the American Red Cross has with the Federal Government is a special one, unique. What is the nature of that relationship?
Gail: I affectionately call it our unfunded mandate. Most people think that we are getting funding from the Federal Government. In fact, about a quarter of the people in our country think we are an agency of the Federal Government. But all of our funding comes from private individuals, corporations. But the reason I say we have a congressional mandate is that, it is by law our responsibility to give mass care and feeding during a disaster. And we have that responsibility, along with FEMA, who is the co-lead of that particular set of events. And there’s a national framework, and there are 13 parts to this framework, and everyone has a role and responsibility. We’re the only nonprofit that’s baked into that framework. The Department of Defense will do search and rescue. The Department of Energy will make sure that power gets back on… all the way to mass care and feeding. So, we do sheltering and feeding and making sure people have a roof over their heads.
Denver: That is very unique and important perch indeed. As you said, you are most closely identified with disaster relief. But that’s only part of the story. Another part of the story, one that is perhaps not fully appreciated, is what you do to support service men and women, veterans, and their families. It’s really quite a lot. Tell us about it.
Gail: I’m really glad you asked this question because they say that 1 in 5 people in our country have been touched by the American Red Cross in some way, but what we do for the Military is so much like a well-kept secret. Most people don’t realize it. However, I find that if I go to an airport with my Red Cross pin on, and I stop a service member, and I thank them for their service, they will tell me Red Cross stories. So, the military knows us well.
First of all, we receive about 420,000 phone calls every year for emergencies, and this could be anything from: Get my daughter on; her father is on his deathbed; or Get my husband home; he’s about to become a father for the first time. Sadly, we’re getting about one call a day on average from concerned family members who are worried about a veteran in their family or a service member in their family– that they may be contemplating suicide– and we’re handling those calls as well. So, these connections are really important.
And we convene all the relief agencies that touch the military. So, if it’s something we can’t handle, we will make sure that that veteran or service member has an outreach to a whole host of other nonprofits that can help them out. We take calls on behalf of ourselves, but also we parse them into other organizations. We have volunteers in every VA hospital. We greet every wounded warrior when they come back to the US, and they come to two places– either Fort Belvoir or Walter Reed. At Walter Reed alone, we have 800 volunteers. These are doctors, nurses, physical therapists, etc.
We have volunteers on every military base, including in theater. We have volunteers that were in Iraq, that were in Afghanistan, and they are getting these emergency messages to the right person, dealing with the commanding officer, morale boosters. It’s really quite important for everything that we do, and it’s something that I’m very proud of, and it touches me personally because I have a stepson who is an active-duty airman. He’s a master sergeant in the Air Force. He often tells me how grateful he is that he knows what he would do if there was an emergency.
Denver: That could be a nonprofit organization unto itself, it is so big and so extensive. Then there are blood donations. We have a serious problem in this country, Gail, particularly during the summer months, with donations of blood, of which the Red Cross supplies some 40%. Do you know why not as many people are donating blood today as once was the case?
Gail: It’s a great question, and it’s one that perplexes me and my colleagues in the United States that are also in the blood banking industry, and in fact, it’s a worldwide problem. The number of new donors is going down, and it has done so over time. So, there are a couple of things that might be contributing to it. There are so many people that telecommute. So, if a big company is throwing a blood drive, there are less employees that are there that particular day. There are lots of restrictions on people who donate if they travel to certain parts of the world, and people are traveling more often. It could be that it’s just not top of mind.
But we are doing whatever we can to increase the number of new donors and also to touch lapsed donors. We had a big marketing campaign. You pointed out that the summer is challenging. It really is a challenging time because we collect a lot of blood from universities, colleges, even high schools, and they’re out of session, and it’s a troublesome problem because July and August, there are a lot more accidents. So, there are more instances of trauma. The need is constant.
In fact, this number still astounds me. We need 15,000 people a day to show up to donate blood. And then, the next day, we need a different 15,000 people because you can’t keep donating blood every single day obviously. So, the fact that these people present and selflessly open up their veins to save the life of a total stranger, it fills my heart with their generosity. It’s really pretty incredible.
Denver: You’ve had some interesting promotions, too. Share some of those.
Gail: We recently, in fact right now, we’re running a promotion with giving our blood donors a $ 5 gift card from Amazon, and it was generously donated by Suburban Propane, a company that is a big fan of the American Red Cross. It’s kind of a cool thing because it’s a way we can acknowledge and thank our donors. But the other thing that’s cool about it is, a lot of them will say “No, no, no. You can keep it.” So,it’s also acting as a reminder for people to get out there and donate blood.
Denver: Training is another big piece of what you do. Millions and millions of lessons provided every year. What are some of those lessons where you train and teach?
Gail: A big course is First Aid & CPR. By the way, statistically speaking, 27% of us are going to eventually see someone that’s in cardiac distress.
Denver: I saw that. I couldn’t believe it. It’s 1 out of 4, over 1 out of 4.
Gail: Over 1 out of 4. It’s really important for people to take a First Aid & CPR course. If you just don’t have the time, we have a ton of apps, 12 million downloads of these apps. One of my favorite ones is the First Aid App. You open up your phone. Right there on the phone, you can dispatch 911. There’s video and explanation in alphabetical order of anything that could possibly happen to you, starting with allergies. Literally, the day we put this up, it’s on your smartphone; so, the day we put it up, one of the reviews, five-star review, said “I just saved my grandmother from choking with my iPhone.” So, it’s pretty incredible! It’s a really good thing to have in your hand.
Denver: Quite the testimonial.
Gail: It really was. The reviews are very similar that we get as a result. So, we teach First Aid & CPR. We teach swimming lessons. We teach lifeguarding, junior lifeguarding.
Denver: We’ve got a shortage of lifeguards, right?
Gail: We really do. The course is wonderful. It’s really wonderful. We teach babysitting classes. We very often will just do free CPR Saturdays and just teach chest compressions, for example. It’s a really important thing about our mission. It seems like wherever I go, I’m recognizing an ordinary person who has done something extraordinary to save a life. There were two grandparents who were walking through a street in Minnesota, and they heard screams, and this four-year-old kid had fallen through a frozen lake. Pulled her out, did First Aid CPR on her for 20 minutes, and that kid is perfectly fine today. An eleven-year-old took a babysitting class. She saved her three-year-old sister from choking. It’s a beautiful thing. It’s important.
The swim side of it is important too. There are 50 cities where the drowning rate is abnormally high compared to the national norm. We went into these cities, and we’re teaching kids to swim, a ton of them for free. We did 50,000 in three years. We just did 25,000 this last year. These are kids that can’t swim, and they wind up joining a swim team. They wind up being lifeguards. It’s a really cool thing.
Denver: I think 19% of Americans can’t swim. I’m one of those Americans who can swim, and I probably should be on the other side of that statistic because I can’t swim very far. That’s for sure.
We were talking about when people think of the Red Cross, they think of disaster relief. What am I thinking about now? I’m thinking about earthquakes, I’m thinking about hurricanes, I’m thinking about floods. The Red Cross response to many, many smaller disasters, particularly house fires; how common an occurrence are they? And what do you do here to protect homes against fires?
Gail: Most people, in fact I probably argue almost everyone knows we respond to big disasters like you said. But we actually respond to 64,000 disasters on average every year. Once every 8 minutes, we are responding to a disaster. As you pointed out, the vast majority of them are home fires. The vast majority of those home fires are caused by cooking accidents. It can happen to anyone, any socio-economic group, anywhere, any place. There are 2,500 deaths a year from home fires. Way bigger than natural disasters. These can be prevented if people do two things. They need to have working smoke alarms, and they need a plan to get out of their home in two minutes or less. That sounds like a ridiculous number, but it’s two minutes or less.
I don’t care if you live in a mansion or if you live in a one-bedroom apartment, it is essential to get out. Everything goes up very quickly these days. We were watching this, and we were responding so often, and we are dispatched by the fire department. We give comfort and hope. We give people a place to stay, and we give them some financial assistance. But we thought, we’ve got to do something about this. So, we started a home fire campaign. We have installed 1.4 million free smoke alarms. When I say installed, I don’t mean we’re just giving them out. We go door to door with a step ladder, a drill, and tons of free smoke alarms. The cool thing about it is people just let us in because they see the Red Cross logo, and they’re so delighted.
So, we’re focusing on areas that are prone to home fires, that are in challenged, vulnerable communities where the socio-economic situation is not great. Imagine a family that is trying to figure out, “Should I fill my kid’s diabetes drug, or should I buy a smoke alarm?” For them a smoke alarm is a luxury. We go in, we install them, then we make sure they have a way to get out, and they know they have to get out in two minutes. When they have smoke alarms, we check the batteries, and you’d be amazed how many don’t even have batteries in them anymore. I know a lot of people that take them out because they’re ringing and they’re annoying. So, we make sure they’re in working order.
As a result of this campaign, there were 464 lives saved. I love thinking about those people. Some of them were children. Everything they wind up doing in life is because they had a smoke alarm in their home, and they knew what to do to get out. In fact, one story, if you’ll indulge me. It was a family of four; five-year-old kid, three-year-old kid, and the parents. They had smoke alarms, they had batteries. They were in good shape. Then we asked them: how long do you think you have to get out of the house? They said, “Five, ten minutes.” We made them do some fire drills. About three days later, they had a fire. Smoke alarm went out. We had told them, watch out for your kids because they tend to hide in the closet because they’re scared when they hear the noise. The five-year-old woke up first, ran in to her brother’s room, pulled him out of the closet, and then woke up the parents. They all got out in time because this kid knew about the fire drill. It’s a beautiful thing when it works, and we are bound and determined.
The other thing we’re doing is training kids in schools… grades one through three. We’ve done 1.2 million kids. These kids go home, and they nag their parents about having a fire drill, and they’ve become preparedness ambassadors. I’m hoping the next generation is better prepared than the one we’re in right now.
Denver: Can’t start early enough. Again, talking about the things that you do that a lot of people don’t know. That certainly would be near or at the top of the list.
Let’s get on to those big disasters. My goodness, last year in this country, we had Houston. We had Hurricane Maria in Puerto Rico, and I think Irma was down in Florida. This year, it’s a volcano in Hawaii, and there are floods right now in Pennsylvania, and oh my goodness, these devastating wildfires out west. Tell us about some of the work where the Red Cross is currently involved.
Gail: The other thing you skipped is the floods in Iowa. They were pretty dramatic as well. Right now, we’re really focusing on the wildfires. The good news is, we were able to shut down some of the shelters in the two biggest fires that were taking place. At the peak, we had 1,100 people living in shelters. But we are really resource strapped because this keeps happening. In fact, now, there’s a new fire that just started called the Holy Fire. We had 14 people in the shelters, but that isn’t contained yet.
This thing just keeps evolving. What’s troublesome is this is not the season for wildfires. Nevertheless, it’s happening. The Carr fire, I believe, was the largest wildfire in all of California’s history. It is devastating. It’s gobbling up so much acreage. I’m really proud of the work that we’ve done there because 80% of the workforce that we had there came from California. It was a classic example of neighbor helping neighbor. We had about, at the peak, over a thousand volunteers and workers there; well over 90% of them were volunteers. That’s a lot of work.
You mentioned the season last year. Oh my gosh. At one point, we had 320,000 people living in Red Cross shelters, and that’s the population of Pittsburgh. When you are dealing with a population the size of Pittsburgh, anything can happen. So, in three separate shelters, three different women went into labor the same day. It was unbelievable. Our volunteers got them to a local hospital. They came back with their babies, and I had the privilege of meeting a three-day-old, five-pound baby girl, and in the next half hour, I kid you not, a woman who was 85 years old, was wheeled into our shelter in a hospital bed with her hospital ID still on her wrist. Every age and circumstance in between, it was really quite a stunning year for us..with a lot of challenges.
Denver: A lot of challenges. In fact, I think your team prepared for 7 major disasters, and you said well, that’s a great exercise but it’s never going to happen. Lo and behold. You better prepare for 10 this year.
Gail: That is exactly right. They came in. They told me, “We need to be able to house half a million people, serve a million meals a day. We need to galvanize 50,000 volunteers, and that’s what it’s going to take for us to be ready.” So, I said, “Great. Go ahead!” and I was thinking it’s not going to happen. Lo and behold! It’s exactly what happened, and we were ready for it.
Denver: Clear up for me a misconception that I have, and that is: when a disaster strikes, particularly a hurricane or an earthquake or a flood, there’s a tremendous call for public support and financial support; and people respond. And I see crawlers on TV and things of that sort; I never see that with wildfires. Would that be the case?
Gail: We do have crawlers on TV. We do raise money for wildfires as well. I’m happy to report that we raised enough money to cover all of our expenses in the wildfires that we experienced recently in California. They just don’t get as much news coverage. Honestly, it’s a lot of evacuation, and that’s extremely important, but people then are released and able to go back home. So, I think that’s a little bit of it too.
There is something that just tugs at people’s heartstrings when they see a person rescued off of a rooftop because of a hurricane or tornado or a situation like that. But the American public never ceases to amaze me. Their generosity. You hear about this culture of divisiveness and tribalism. I don’t see it. I see generosity. I see resiliency. I see kindness. It’s a privilege to be part of the Red Cross to get to see it.
Denver: A lot of people think you’ve got the best job in America because you do see the best of human nature. You really do.
Gail: I really do. I really think I do.
Denver: Gail, how do you prepare for a disaster, and particularly one where there’s been a good deal of warning, like a hurricane?
Gail: I mention those statistics. We have eight warehouses that we keep fully stocked. What most people don’t know is when it’s a hurricane, we have spent so much money before the hurricane even hits. So, when people give us designated dollars for a storm, we love it. We program it. We make sure it goes in the right hands. But people need to understand that a lot of that money is being spent before the disaster even strikes.
So, money for an unrestricted disaster relief fund is the way we’re able to pull this off. We make sure those eight warehouses are completely stocked with cleaning supplies, hygiene kits, ready-to-eat meals, cots, blankets; anything you would need to be able to stand up a shelter. We have volunteers that stand at the ready, and we have a lot of in-kind miles, so we can get them from here to there. But a typical volunteer, you know, when the weather comes for a hurricane, there’s a big cone. We will start stationing and pre-positioning volunteers in that whole cone and then move them as it gets closer and we know where it’s headed.
The key is to get them there along with the supplies before the storm hits because after it hits, airports are closed. People have no place to stay. We have a national shelter system with 62,000 shelters in it. We don’t own any of that real estate. They’re schools. They’re convention centers. They’re churches. They’re partners. We make sure that they’re in the ready. Speaking of partners, we have over 100 memorandums of understanding with nonprofits, for profits, because when one of these hits, it takes a lot more than one agency to be able to respond. You better believe it.
Denver: What about technology? You’ve been at this post for 10 years now, and I can only imagine the technology you’re deploying today is dramatically different than what you were deploying 10 years ago to make the American Red Cross more responsive. Give us an idea how some of that has changed.
Gail: First of all, my background is in computer programming, when the dinosaurs roamed the earth, I might add. I love technology just by my nature. We deployed as an example a new system called RC View. It uses geo-satellite technology, and we can see what is going on on the ground. We can see where feeding trucks are. We can see how many people are going to shelters. We can see damage assessment. Its maiden voyage was during the floods in Louisiana, which were huge. We thought: Are we ready to beta test this on something so big? And we just went for it. It used to be our volunteers would be two in a car. It would drive up a street. One used a clipboard, wrote down which houses looked damaged. Then they would turn around, go to the other side, and they would write down on that side what houses were damaged. Took forever. But it had to be done. So, this was a very manually intensive way of responding.
In RC View, we see what the damage is immediately, and we were able to deploy caseworkers from their homes. We didn’t even have to fly them in. They started making outbound calls to these communities saying, “Okay, here’s a number, call me,” and we’re able to get them relief much, much quicker. That one deployment, just the Louisiana floods, we saved $4 million. That $4 million went right back to relief to help the people that were impacted. The technology we’re using is really cool. We’re teaching Alexa, Amazon’s Echo product how to do First Aid CPR. We are using chat bots. If you want to figure out if you’re eligible to donate blood, you can just put in something, and the bot will figure it out for you, and it’s incredibly accurate.
Denver: Just removing the barriers that prevent people from doing the little things that they intend to do, but just never do.
Gail: Exactly right. It’s really an extraordinary transformation for us.
It’s All hands on deck! during a disaster. There was a point in the Red Cross history before I had arrived that we thought we had to do everything on our own. It really doesn’t work very well. You go into one of our mega shelters for example, and you will see people with T-shirts on from so many different organizations: for profit, nonprofit. Is it a big business? I think it’s a big humanitarian business for the most part. The care and the compassion. Literally our volunteers that are deployed in big disasters have 12-hour shifts, seven days a week for three solid weeks. We have to drag them out of there and send them home. There’s something really special about the humanitarian side of all of this.
Denver: I’m old enough that I can remember a time when disaster relief was primarily under the purview of government and NGOs, but today, corporations and businesses are engaged in a very significant way. It’s become more of the disaster relief industry. How has that involvement changed the way work is getting done?
Gail: You said something really interesting which I’m going to repeat. It’s All hands on deck! during a disaster. There was a point in the Red Cross history before I had arrived that we thought we had to do everything on our own. It really doesn’t work very well. You go into one of our mega shelters for example, and you will see people with T-shirts on from so many different organizations: for profit, nonprofit. Is it a big business? I think it’s a big humanitarian business for the most part. The care and the compassion. Literally our volunteers that are deployed in big disasters have 12-hour shifts, seven days a week for three solid weeks. We have to drag them out of there and send them home. There’s something really special about the humanitarian side of all of this. To my way of thinking, the more the merrier, honestly. We have so many relationships with corporations. They are so helpful to us. That technology I described, we put business cases in front of about five or six companies, and they funded the whole thing. We love the relationship that we have with business.
Denver: Did Salesforce pick up the tab for Hawaii…Marc Benioff?
Gail: That was an absolute amazing act of generosity. It was unbelievable. He paid for what he thought it was going to cost. Then we let him know that it was costing more, but that we were going to raise funds for it. And he said, “No, I’m going to pay for that part, too.” They sent me an email. Salesforce is an amazing partner in so many different ways.
There’s nothing interesting about writing a story that says, the American Red Cross saved lives. It’s much more interesting if you can find a misstep. So, criticism comes in two categories. One, deserved criticism, and when that happens, we admit our mistakes. We learn from them. The criticism makes you feel uncomfortable, but nevertheless, it makes you better. For that, I have no problem with it.
Some of it is a bit misleading with sensational headlines. When that happens, unfortunately, people are so busy, and there’s so much news coming at them that they re-tweet “fake news” 11 times more than they retweet the real news because the fake news has more interesting headlines. It’s more sensational. So, when that happens… and it happens… we do our best to just dispel the myths and put out the facts.
Denver: They certainly are. As so often is the case, Gail, the biggest player in the field of endeavor is also the one with the biggest target on their back. And the Red Cross, you know, you’ve come in with your fair share of criticism after Houston last year. For instance, some people said they were in need of help, and the Red Cross wasn’t there for them. Others question how the money was being used and deployed. And ProPublica has done a number of critical stories. How do you respond to those concerns?
Gail: First of all, we’re a beloved brand. We measure our trust. It’s always in the 70s. Maybe a blip now and then, but it’s always averaging in the 70s. When you are a big beloved brand, let’s put it this way. There’s nothing interesting about writing a story that says, the American Red Cross saved lives. It’s much more interesting if you can find a misstep. So, criticism comes in two categories. One, deserved criticism, and when that happens, we admit our mistakes. We learn from them. The criticism makes you feel uncomfortable, but nevertheless, it makes you better. For that, I have no problem with it.
Some of it is a bit misleading with sensational headlines. When that happens, unfortunately people are so busy, and there’s so much news coming at them that they’ll re-tweet “fake news” 11 times more than they retweet the real news because the fake news has more interesting headlines. It’s more sensational. So, when that happens… and it happens… we do our best to just dispel the myths and put out the facts.
I think if anyone came to our website, they would see exactly how we’re spending the money. I believe we lead the sector in transparency. If you look at where we spent the money in Hurricane Harvey, which you mentioned, every single dime is accounted for. On the average, 91 cents of every dollar we spend is going to our services. We keep our overhead really low. We’re kind of maniacal about it. I just hate spending any money that isn’t mission-related. We really try everything we can to be more efficient and effective.
In Houston, which you mentioned, we gave 575,000 households $400. So, we spent about $230 million giving instant relief. We had a set of criteria. I wish I could have helped everyone that was impacted at all, but there was just not enough money to be able to do that. We targeted the people whose homes were damaged beyond repair, who were in financial need, who were impacted. We have people applying for aid honestly from China and from Ireland. At the end, I’m really proud of what we did during Hurricane Harvey. It hurts to have to say no. But you can’t help everyone, so we helped the people that were in the most dire need. And we’re still there, and we’re still giving financial assistance, and we’re giving grants to other nonprofits that can help as well.
Gail McGovern and Denver Frederick inside the AM970 studio
Denver: Let’s turn to your tenure at the Red Cross. When you arrived there back in 2008, you walked into an incredibly difficult situation. A $209 million operating deficit, and the organization was literally borrowing money to make payroll. But you were able to balance that budget in just two years. How did you approach that challenge, Gail, in making those tough decisions, but also knowing you needed people to follow you after the ship was righted?
Gail: It was an interesting journey, I have to say. When I came in, I could see it. I could see what needed to be done. It wasn’t that complicated really. Getting it done was complicated. But what needed to be done was pretty evident. We had 720 different chapters. Each one had a CEO. Each one had infrastructure under them that was necessary if you were operating alone, if you were a separate charity. But we’re all part of one charity. So, with it came a lot expense. Every chapter had their own general ledger, their own financial systems, their own bank accounts, their own website. If you put in disaster relief in Google, we wouldn’t even come up because there were 720 little websites. So, it was pretty evident that all that back office stuff had to become centralized.
The trick of it was doing it without losing the hearts and minds of the people that were there. It would have been tempting to just rip the Band-Aid off and say, ta-dah! But what I learned very early on was the culture of the American Red Cross. They are so mission-driven. Red Crossers just are there to help others. So, if you could lead through the lens of: we have to save the American Red Cross and through the lens of: who would be there to fulfill our mission if we aren’t? It kind of turned it around.
Honestly, I don’t think people understood this situation we were in. When we laid out the financials to those 720 CEOs and showed them what the place where we were heading, people laid down their self-interest. It was a journey. It took a while. But the fallout was actually fairly minimal, and most of the fallout was very friendly. People said, “I didn’t quite sign up for this. I get it. I support it. But I think I’m going to try to do something else.” Almost everyone stuck with it. Almost everyone stayed and helped. The incredible thing were the sacrifices we had to make; some of it was easy money, honestly. Everyone was doing their own purchasing. We are probably the only organization in the world that was paying retail for everything.
Denver: Leveraging nothing.
Gail: When we consolidated purchasing, that was $50 million right there. Everybody was doing their own audits and paying tax accountants. That was another $5 million right there.
Denver: It’s funny how there’s always a misconception, at least I have found at that local level, because they always look to the national and think how the national is sort of ripping them off… on how they’re funding them or supporting them. And it’s only when you get transparent and they see: “Oh my goodness! They’re actually the ones that are subsidizing us!” It does change, but that’s never their original thought.
Gail: You are so right. In fact, I think the way we’ve won the minds and hearts of everybody was to just be totally transparent with the chapters. We just said, Here is the situation and PS, we did something really bold that had me up at night for a number of weeks… we just took away the assessment. We said, You do not have to pay dues to us anymore. We said to them, Raise money for the Red Cross; we were also tripping on each other during fundraising. We were fundraising. They were fundraising. So, we said, You do all the fundraising. We will do none of it. Just raise money for the Red Cross… for your chapter, for the whole Red Cross, whatever your donors want to do. Ask for big asks. Go do the fundraising, and we’ll do all this back office junk that you don’t even like to do.
The sleepless nights were: Can they do it? Can they raise money for the whole Red Cross? You know what was the defining moment, and I loved it. They were like, “But if we can’t raise the money?” I was teasing them. I had a whole group of them in. I said “I have more confidence in you than you have in you.” I said, “You can do it. Just do it. Everybody loves the Red Cross. Just go out there and do it.” Lo and behold! I think we were all surprised that they were able to start turning our fundraising around too.
Denver: Speaking about your fundraising: at the time of disaster, people support the Red Cross like no other organization. But with that said, is fundraising a challenge at times when a major disaster is not there that galvanizes the public?
Gail: It’s a great question. Honestly, disasters do keep us top of mind. People see us; they’re thinking about us. They’re seeing the good work we’re doing, so it helps. But as I tell my team over and over again, we are humanitarians, and we do not like disasters. They hurt people. They harm people. They cause heartbreak. You just have to go to a Red Cross shelter and see what I’m talking about. You don’t say, Gee I hope we have another one of these so we cover our expenses. You just don’t want that to happen. So, we’ve gotten much more adept at talking about the 64,000 disasters, of talking about the need to be ready for the next disaster, about the great works that we do for the military. We’ve just gotten a lot better at talking about the mission, and it’s made it a lot easier to fundraise.
Denver: Your legacy is probably going to be having turned around the financial fortunes of the organization at a very precarious time in its history. But you have said you would like your legacy to be having made the Red Cross the very best place to work and to volunteer. What are some of the things that you do to help shape and influence the corporate culture of the Red Cross?
Gail: That’s a great question. First of all, the underpinnings of the culture itself were great, and I had not very much to do with that because it’s mission-driven; it’s caring; it’s compassionate. Believe it or not, it’s a culture that kind of naturally embraces change, and people will kill for that culture.
Denver: They don’t like uncertainty, but they will embrace change.
Gail: Exactly right. In fact, the reason why it attracts people that are like that is because no two disasters are the same. So there’s always change. The sand is always shifting under your feet. I think it’s in our DNA. I have a quote in my office by Clara Barton. I can’t say it exactly right but it’s, “I defy the tyranny of precedence.” I just love that line. Then she says, “I always look for ways to improve the past.”
Denver: You know what my favorite Clara Barton quote is? She says, “I might sometimes be willing to teach for nothing, but if I’m going to be paid at all, I shall never do a man’s work for less than a man’s pay.”
Gail: You know what she did after that? She forwent her salary, and kept teaching for free. She’s my hero. She really is. I channel her whenever I can. So, it’s a culture that embraces change naturally. It’s a culture that’s very compassionate. The problem is, and it’s very similar to businesses that I have familiarity with, It gets silo’d. The people that are doing disaster don’t really work with the people that are doing blood donations or recruiting blood donors, and they don’t work with the people that are training. There’s no vitriol between them. There are just silos. What I would love to do is have a culture where we all are working with each other, where we do cross-pollination across these silos so people know the different lines of service.
We move a number of tomorrow’s leaders from experience to experience, so they get a good vantage point. The other thing which was an unintended consequence, and it was great, is these smoke alarm campaigns?…we had people from our IT department, from legal, from finance… areas that would never touch the mission that way; from our biomed business, from our health and safety business. The next thing you know, people re-fell in love with the Red Cross. They’re welcomed into a stranger’s home. They’re helping them potentially save lives. They refell in love with the mission.
I’m really all about getting employee engagement up, getting volunteer satisfaction up because that’s more sustainable than a financial turnaround.
Denver: How do you do that?
Gail: One of the things that we did that was absolutely… two things. One, we stood up a high-potential program at the Red Cross. We move a number of tomorrow’s leaders from experience to experience, so they get a good vantage point. The other thing which was an unintended consequence, and it was great, is these smoke alarm campaigns? The one that I was recently on? We had people from our IT department, from legal, from finance, areas that would never touch the mission that way… from our biomed business, from our health and safety business. The next thing you know, people re-fell in love with the Red Cross. They’re welcomed into a stranger’s home. They’re helping them potentially save lives. They refell in love with the mission. I’m really all about getting employee engagement up, getting volunteer satisfaction up because that’s more sustainable than a financial turnaround.
Denver: You’re also all about hiring great people, and I know that you are exceptionally proud of the senior team that you have assembled at the Red Cross. Everybody knows you want to hire great people. How do you go about it? What are some of your tricks of the trade?
Gail: I’m a little bit of a maniac about this, I have to say. I have a reputation of driving people crazy because I will limp along with a vacancy for as long as it takes for me to get the best person for the job. I have seen more people hire for expediency and then dig out of a personnel problem and wish they never did it. I would much rather keep that job open until the right person comes in. I don’t necessarily look for someone who can do the job when they walk in. I know this sounds lame, but people don’t do it. I look for smart, and I look for nice. If they have those two traits, you can pretty much teach somebody anything. You may not be able to teach them to be a brain surgeon, but in business and in nonprofit, you can pretty much teach them just about anything. There’s nothing worse than hiring somebody who’s really smart who isn’t nice.
The other thing I do, and I’m in the process of doing it right now, and it drives my team crazy… I make every single person at my leadership table interview the incoming person. One thumb’s down? I won’t hire them because it becomes a self-fulfilling prophecy. They start saying, I told you they weren’t going to work out. It’s unhealthy, but I also do not staff for like-mindedness. That’s a problem because you’re all really happy. You love each other; you walk right off a cliff together.
Denver: Just like having a desk drawer with twelve pairs of scissors.
Gail: I love that. I am going to use that, and I will give you attribution for it, Denver.
Denver: I had Ken Dudek on the show from Fountain House, and he also hires for one thing that he says can’t be taught, and that is positive people. He says, a person’s either born positive or not, and there’s just no teaching a person who’s not predisposed to be positive to ever be positive. I remember that very well.
Gail: I’ll tell you something that my husband and my daughter accuse me of all the time. They say, “You’re a card-carrying member of the Happy Club.”
Denver: You’re also a card-carrying member of the workaholic club too, and I know work-life balance can be a challenge for many nonprofit organizations, but especially one where there can be irregular hours, and there certainly is an emotional toll when you’re seeing victims of natural disasters. Parkland would be a great example. You work very, very hard. How do you promote a healthy work-life balance at the American Red Cross?
Gail: This is a really great question and a tough one to answer. When I was in corporate America, I was an officer at AT&T. I had a two-year-old kid, and my husband had lymphoma, and I somehow managed to have work-life balance. I didn’t really have much of a choice. I would pack up my stuff at 6 o’clock, and I would go home, and I’d give incredible quality time to my family, and then I don’t require much sleep, so I’d open up my briefcase and work again at night. My husband pulled through. He’s awesome, but I used to give lots of speeches on work-life balance.
When I came to the Red Cross, I don’t know if it was the direness of the situation because we were in financial straits or my love for the organization; I’ve loved every job I’ve ever had, Denver, including the one I had when I was 14 years old when I was a cashier. I just love to work, but I am in love with the Red Cross. The work-life balance thing has sort of gotten out of skew. My daughter is now in college. It’s hard for me because I enjoy the work. It doesn’t feel like work. It really doesn’t. My husband is very tolerant of me loving this job, so I’m personally not practicing it as much as I should, but I do encourage my team to take time off. If they need to leave, I would never say, No, you have to stay. I know every one of their kids’ names. I know what soccer games are playing. I try and encourage it and make sure that people know that it’s okay and encouraged.
Denver: I had Aaron Hurst on the show a while ago. He’s the founder of the Taproot Foundation. He had a great quote. It was, “If you haven’t managed volunteers, you really have never managed.” Despite having had those senior leadership positions at AT&T and Fidelity earlier in your career, Gail, you have said you’ve learned more about leadership at the Red Cross than at those other positions. What have you learned?
Gail: That quote about the volunteers is exactly right. I prided myself when I was at corporate at being a reasonable boss and a supportive boss. I would gather input; very participative boss. When I would go from job to job, people would want to join me at my new job. I always felt that I was a good leader. But at the end of the day, after we debated and everybody’s opinion was heard, I would say, Okay I’ve heard it all. Now, we’re all going to jump, and everybody would say, How high?
You turn to volunteers and you say, Here is the direction we’re going to go, and you go: Jump! They go, No! it’s very humbling. I’m thinking, What do you mean no? Then I’d start thinking about it. It’s like, I can’t take away their bonus. There’s no leverage. What it taught me is, the best way to lead is to be influencive of your ideas, not the power of your office. When you convince a volunteer to do something, it’s probably the right thing to do. They’re a great check.
It’s sort of like having a toddler at home. It doesn’t matter what you do for a living, you walk in the house, and you’re not big anymore. You can’t say, Do you know who I am? It’s the same thing with volunteers, and it’s humbling. It taught me very much how to lead from the heart more than the head. I’m a quantitative sciences major, so that left side of my brain, it likes to get engaged. I’ve learned to lead through the lens of the mission. I’ve learned that everyone wants to have a higher purpose in life, and I should have tapped into that when I worked at AT&T and Fidelity.
There’s a heartfelt reason why people come to work, and if I could transport, I would tap into that, and I still probably would have moments where I’d have to say, Jump! But for the most part, when you lead through the heart, you’re much more authentic and credible.
It’s a slippery slope, particularly for a woman to be frank. You don’t want to come off too cheesy. But when you’re leading a mission-driven organization, you can always lead from the heart.
Denver: What would you do differently if you were transported back there today?
Gail: At AT&T if people would get overly excited, I felt like I needed to calm them down, I would say things like, “People, we’re not saving lives here! It’s telephone calls. Just calm down!” At Fidelity, I’d say, People, we’re not saving lives here! It’s just managing money. Calm down!” But people want to be part of something bigger than them. What I should have done is say, “This work is really important. We are connecting people with the people they love, with the data they need.” Or, “We’re making people’s financial dreams come true. We’re putting kids thru college or helping people retire.” There’s a heartfelt reason why people come to work. I don’t care what you do. There’s a heartfelt reason why people come to work, and if could transport, I would tap into that, and I still probably would have moments where I’d have to say, Jump! But for the most part, when you lead through the heart, you’re much more authentic and credible.
It’s a slippery slope, particularly for a woman to be frank. You don’t want to come off too cheesy. But when you’re leading a mission-driven organization, you can always lead from the heart.
Denver: I think you sometimes think you’re coming off cheesy, but then you find out the way people respond, you really are not coming off that cheesy. They really embrace it and buy into this.
Let me close with this, Gail. You’ve been out there at Red Cross for about a decade, which is a relatively long time these days, and as you have strived to change and better the institution, the institution invariably also changes you. How has the American Red Cross changed you, not just as a leader, but as a person over the past 10 years?
Gail: I’ve become much more humble. I’ve become much more grateful. I have a deeper love for our country;, I’ve always loved being a US citizen, but you see the resiliency of people who have lost everything. You don’t see that in other countries during disasters, and I’ve been around. You see the generosity of the American public. I got a $1 gift that came from the tooth fairy with a letter from a seven-year-old that said, “Can you use this to help people?” You see that, and it’s humbling.
I’ve been back and forth to Haiti a number of times. My first trip there was four days after I was diagnosed with breast cancer. I was feeling kind of sorry for myself until I got there. When I learned that one in 10,000 people that live in Haiti will ever see a doctor in their lifetime, and I had six different doctors giving me second opinions for my recurrence of breast cancer. I came home, and I thought: I am not going to complain about this or anything else. I’m just grateful for everything I have, and I think I’m a kinder person. Just tiny little acts of kindness… you can do them every day. I know people pay it forward when they experience it.
Denver: It sounds like it’s been a great marriage. Gail McGovern, the President and CEO of the American Red Cross, I want to thank you so much for being here this evening. How can listeners become involved, take a training class, become a volunteer, or financially support all the work that you do?
Gail: They should go to our website, redcross.org, and they can do all the things you described. We have an 800 number, 1-800-red-cross. We just love people that volunteer their time. No gift is too small. We’ll put it to great use, and giving the gift of life and donating blood is really precious too.
Denver: Thanks, Gail. It was a real pleasure to have you on the program.
Gail: Same here. it’s a pleasure to be here.
Denver: I’ll be back with more of The Business of Giving right after this.
Gail McGovern and Denver Frederick
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/businessofgiving.