International Red Cross Society
The International Red Cross Movement is the biggest humanitarian movement in the world. The organization has approximately 97 million volunteers and staff across the entire world. The movement was founded to ensure that the lives and health of human beings were upheld, to prevent and eradicate human suffering, and to ensure that all human beings were respected. The movement has several organizations that are independent from each other.
The American Red Cross is part of the International Red Cross Movement. Nearly every nation in the world has a National Red Cross and Red Crescent Society. Every national Red Cross entity works in line with the international humanitarian law and the rules of the International movement. The American Red Cross is no exception to these rules.
My initial impression of the American Red Cross Society upon seeing its website is that it is a well-organized body committed to charity works. There are different tabs that lead the reader to different facets of the organization. The home page has tabs that direct readers on how to donate funds, how to donate blood, acquiring training and certification, ways in which individuals can help, finding a local Red Cross, heart-warming stories about the people who have been helped by the society as well as a tab that directs readers to the organization’s store.
In addition, a page chronicles the intriguing history of the American Red Cross is available. The founder was a woman named Clara Barton. She first heard about the international humanitarian organization as she was visiting Europe shortly after the Civil War. When she returned home, she and her acquaintances formed the national organization in 1881. She also campaigned for the government to ratify the Geneva Convention that protects those injured during war. The government ratified this convention in 1882.
It is interesting to note that at first, the American Red Cross Society was only tending to those individuals who had been injured during wars overseas. For instance, the organization helped take care of the wounded during the Spanish-American war. Fast forward to more than fifty years later, the American Red Cross focuses both on those injured during war and civilians back in the States. The organization now focuses on five principle areas:
1. Providing international relief
2. Collection, processing and distribution of blood
3. Provision of support to military members and their families
4. Taking care of the civilians who have been affected by natural and man-made disasters in the country.
5. Providing health and safety training and education to all interested members of the public.
Vision, Mission, and Goals
The American Red Cross is determined to eradicate and prevent all forms of human suffering during emergencies and national disasters in America and her borders by mobilizing the efforts of volunteers and donors.
The American Red Cross aspires to turn compassion for those in need into action. The organization is there in times of need so that:
a). all people who have been adversely affected by disaster receive care, shelter, and a helping hand regardless of gender, race, social standing, and socio-economic ability.
b). everyone in the country can easily access safe blood when they are in dire need of it
c). each member of the military as well as their family members receive support when and where they need it.
d) During emergencies, there will always be a trained Red Cross member nearby to offer his services to the local community.
Along with the organization’s vision and mission statements, the organization also has a few principles that guide its activities in America and across the world. These principles include humanity, impartiality, neutrality, independence, unity, voluntary service, and universality.
In the year ended 2013, the American Red Cross Society had an estimated revenue of $3.5 billion. Forbes ranked it as the fifth biggest charity organization in America due to its corresponding income of that year.
At the end of 2014, there was some controversy surrounding how the American Red Cross Society spends the money donated to the organization to fund relief efforts across the world. The CEO claimed that 91 cents of every dollar that is donated to the charity organization goes towards relief services. This insinuates that the overhead costs of the company are much lower than one would expect. However, the financial records of the organization for the fiscal year 2013 show that the organization had annual revenue of $3,435,941 while its expenses were $3,380,583. Furthermore, from 2009-2013, the fundraising expenses have continued to increase. In 2013, the fundraising expense alone was a staggering 17.5% of the total money donated that year. As the figures demonstrate, the overhead costs of the organization are very high in comparison to its income meaning that the CEO was blatantly lying when he made the remark (Eisinger & Elliott, 2014).
In mid-2014, the society refused to disclose how it spent the $300 million it raised to offer humanitarian services after the dreadful Hurricane Sandy. A local news website had filed a public records request to have the society provide details on how it utilized the funds. However, the society went to court to challenge the request citing that how it handled the money is a ‘trade secret’. The society argued that releasing the information would inadvertently cause the society competitive harm as the information contained confidential financial information and management methodologies (Elliott, 2014).
Strategic Approach to Competition, Globalization, Sustainability, CSR, marketing and cross border issues
Competition is a threat not only to profit organizations but also to non-profit organizations such as the American Red Cross. According to Friedman (2008), every non-profit organization is first, an economic institution. This is because such institutions are productive units that acquire inputs and transform these inputs into goods and services that have value to the consumer/society.
The American Red Cross society faces competition from seemingly endless directions. For starters, there are different charities to donate to. Secondly, some people believe that the donated money is not used appropriately by organizations such as the Red Cross. This thinking deters them from donating to the society. However, the society boasts a competitive advantage over other charitable organizations in the country. It has a congressional charter that grants the society the authority to respond to any type of crisis (Ferrell & Hartline, 2008). Therefore, donors will have no choice to support the premier organization mandated to handle natural or man-made crises in the country and beyond.
To deal with the issue of increased competition, the organization has developed numerous strategies that include:
a). Heavy reliance on volunteers in nearly all aspects of the organization so as to reduce the cost of labor.
b). Diversifying the sources of funding to increase its revenue base and its influence in the market. The society has a number of donors including the government as well as public and private companies such as United Way. In addition, individual civilians also contribute a hefty amount to the charity
c). using the surplus from one activity to fund other activities. The Red Cross uses a chunk of the money it receives selling blood to hospitals to fund other less lucrative activities.
d). making contracts to provide certain services to the government and other institutions such as selling blood.
e). downsizing the organization to be able to meet its disaster relief and humanitarian responsibilities. The organization has changed its CEO more than seven times since 2002 and has laid off more than 1000 workers after 9/11. (Epstein, 2007).
Like any other organization, the American Red Cross society needs a comprehensive marketing plan in order to achieve its goals. It should be noted that the society is not merely campaigning for increased capital or expanding its donor network. The marketing plan is meant to increase awareness about its humanitarian activities and to project a positive image of itself to the country.
The American Red Cross Society has a broad target market. The main focus is on older individuals who have revolving disposable funds. They donate to a variety of causes and disasters that have struck the nation more freely than any other age group in the nation. The older generation is also more willing to be volunteers especially when they retire. This is because they have more time on their hands and are eager to spend the extra time on something useful such as helping others.
The secondary target group is the young professionals aged 22 to 35 years old. These are able-bodied people who are more inclined to offer a helping hand physically rather than donate money. They have limited funds particularly due to school loans and pressing family responsibilities. They also tend to spend their money on establishing a certain lifestyle for themselves. They are very instrumental in campaigning for the raising of funds such as group funding. They are also energetic and tend to enjoy philanthropic physical activities such as building houses for the poor or for those whose houses have been destroyed by disasters.
The third target group is teenagers and children. These are volunteers, as they do not have money of their own yet. They are encouraged to join organizations such as the American Red Cross Society because of the free time they have during school holidays. This is to deter them from other harmful activities such as drug abuse and prostitution.
Corporate Ethics and Corporate Social Responsibility Policy
Non-profit organizations such as the American Red Cross have a mandate from the public and the government to be ethical in all of their operations. The public has put a lot of trust in such organizations because they were created to protect human life and alleviate human suffering. This enormous trust is visible in the amount of donations that the society receives from civilians, the government, and other institutions on a yearly basis.
There are some ethical principles that the society operates under to ensure that it maintains the trust of the American public. These principles and values are part and parcel of its charter and they include impartiality, universality, unity, voluntary service, independence, neutrality, and humanity. These principles ensure that the organization performs its humanitarian duties in an ethical manner without any form of discrimination.
An effective marketing plan for the organization can only be developed using a comprehensive SWOT analysis. The following is an analysis of the organization’s strengths, weaknesses, opportunities, and threats.
· Advanced network of volunteers across every state in the country
· High level of public confidence in the company
· Long and illustrious history
· A strong and commendable mission and vision
· High number of social work endeavors
· There are constant reports that the organization is mishandling resources. Instances include the aftermath of Hurricanes Katrina and Sandy, aftermath of 9/11 attacks, and the mishandling of funds meant to be donated to relief efforts after the 2004 Indian Ocean earthquake and tsunami.
· There are several would be donors who consider the organization to be another government project.
· There is a low transparency and accountability level. Reports emerged in 2014 that detail how the CEO of the organization refused to release pertinent information to the public regarding how it spent the money meant for Hurricane Sandy relief efforts. The CEO declined to release the information on the basis that it would expose its trade secrets.
· The organization has a very poor connection with the primary target of its relief efforts. The volunteers sent to disaster sites have very little knowledge on the lay of the land, the language, or the culture of the people who have been affected. This makes disaster relief efforts very difficult and the primary targets continue to suffer.
· The organization is also ineffective when it comes to marketing itself to the primary target/market.
· Millennials have a passion to see things change and help those who are suffering. This translates to more fund and blood donors for the organization.
· The organization can use current technology such as social media to reach out to more potential volunteers and donors.
· The organization has an influential reach in the global environment
· There is intense competition from other charitable organizations especially those that are more transparent with their finances to the public.
· The uncertain economic conditions around the globe will have a significant impact on donations.
· There are also stringent budgetary constraints.
The American Red Cross Society was formed for all the right reasons but it seems the organization has failed in some of its primary objectives. The company has been marred by controversy since the time of the Second World War and the media is not letting the public forget some of its failures. For the organization to continue being relevant in the society then it needs to be more transparent and accountable to the public. Discrepancies in its financial statements need to be addressed and it should allow for thorough independent investigations into any reports of mis-conduct by its employees and volunteers.
Elliott, J (2014, Jun 26). Red Cross: How we spent Sandy, money is a ‘Trade Secret’. ProPublica. Retrieved on 29/10/2015 from http://www.propublica.org/article/red-cross-how-we-spent-sandy-money-is-a-trade-secret
Eisinger, J. & Elliott, J. (2014, Dec 4). The Red Cross CEO has been serially misleading about where donors’ dollars are going. ProPublica. Retrieved on 28/10/2015 from http://www.propublica.org/article/red-cross-ceo-has-been-misleading-about-donations
Epstein, K.C. Case Study: The American Red Cross. Retrieved on 29/10/2015 from http://www.contributemedia.com/trends_details.php?id=107
Ferrell, O.C., & Hartline, M. (2008). Marketing strategy.
Friedman, B.D. (2008). How non-profit organizations fight off competition. Retrieved on 29/10/2015 from http://faculty.ung.edu/bfriedman/Studies/compete.htm
Red Cross Fiscal 2013 Financials. http://www.propublica.org/documents/item/1374978-red-cross-fiscal-2013-financials.html