American Red Cross the Beneficiary of the Conscious Capital

Please note: an incorrect image was used at approximately 01:22. The company providing IT support to The American Red Cross is Grainger. We regret the video error.

SUSIE GHARIB: If it is going to be more than a slogan, a company’s social
responsibility campaign requires deep partnerships with people and
charities delivering services to people in need. Now one of those charities
is the American Red Cross. Darren Gersh talked with the group’s president
and CEO Gail McGovern for a glimpse at what corporate social responsibility
looks like from the other side.

DARREN GRESH, NIGHTLY BUSINESS REPORT CORRESPONDENT: When companies
come to the Red Cross to lend a helping hand, they are also trying to
burnish their brands, showing customers the company cares enough to help
out. But American Red Cross CEO Gail McGovern has found another motivation
behind these corporate campaigns.

GAIL MCGOVERN, CEO, AMERICAN RED CROSS: I also think they are doing
it because there are employees are starting to demand it. This generation
of young people were brought up on volunteerism, community outreach and
they want to do it.

GERSH: Which is a good thing, because the Red Cross needs help from
businesses large and small. So how important are these partnerships to the
Red Cross?

MCGOVERN: We rely very heavily on these kinds of partnerships. From
the very simple, Keebler gives us cookies that we use in our blood drives,
it’s between a million and $2 million gift and our blood donors love it.

GERSH: The Red Cross also looks for companies to provide an
expertise. Industrial supply giant Grainger is helping with IT, Wal-Mart
(NYSE:WMT), UPS and FedEx (NYSE:FDX) with logistics. With an army of
650,000 volunteers, the Red Cross finds it is easy to get in a CEO’s door,
but it still has to ask for help. So it’s been a tough economy lately. Are
you seeing companies being more generous or are they being more tight-
fisted?

MCGOVERN: We’re finding that our corporate donors are sticking with
us. Some are making larger donations. But we’re not seeing a pullback.
We’re also doing more outreach. We’re making more asks than we had in the
past. But I think the organization is beginning to realize that giving
somebody an opportunity to give is actually a gift in and of itself.

GERSH: You guys went through a tough time and companies were a
little reticent about doing things with you. So what do you have to do on
your side to make sure you’re responsible so that people will feel like,
OK, we can be socially responsible with you?

MCGOVERN: So when I first got to the American Red Cross, we closed
our books eight days later with a $209 million operating deficit and about
$600 million worth of loans on top of that and so we had to get financially
stable.

GERSH: That meant consolidating services provided at 650 Red Cross
chapters. It also meant getting smaller.

MCGOVERN: It was tough but at the end of the day, the reason everyone
rallied around it was because I said to the organization, how can we look a
donor in the eye and say that we have this redundancy.

GERSH: After restructuring her own organization, McGovern is now in
a better position to give other CEOs advice about social responsibility.

MCGOVERN: I would tell them make sure you support the brand and what
you stand for, make sure that you engage employees in ways that are
meaningful and be sure that whatever you’re doing you can measure the
impact of it. Whoever you’re volunteering for or whatever initiative,
you’re involved in really — you can tell the impact. That it’s measurable
and you feel good about it once it’s done.


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