NEW YORK
The wave of storms battering the United States has plunged the American Red Cross deep into debt as it rushes to prepare for Hurricane Ike, prompting a searching look at how to stabilize its finances.
Gail McGovern, who became the charity's president in June, said that even a request for federal financing is under consideration as the Red Cross tries to become less dependent on spontaneous donations that arrive only in the wake of major disasters.
"We are going to explore every avenue we can to ensure we have a healthy Red Cross," McGovern said in an interview yesterday as the organization deployed 1,000 out-of-state volunteers to Texas to await a menacing Ike. "We're brainstorming absolutely anything," she said. "We're looking at the possibility of appropriations, whatever -- because we want to be able to serve the American public."
As of last week, when Ike was still a distant threat, the Red Cross said it has raised only $5 million to cover costs from Hurricane Gustav that will total at least $40 million, possibly more than $70 million. It has borrowed money to meet those bills, and now is incurring more expenses as it shifts response teams to Texas and prepares its shelters.
"The beautiful thing about the American Red Cross is we are going to be there when people need us," McGovern said. "As the disaster-relief fund depletes, we will borrow money if we need to, to be there."
McGovern said that Red Cross officials were calling Gustav a "silent disaster" because it entailed high costs for sheltering displaced people, yet did not trigger the flood of donations that often follows more deadly and destructive storms.
With Ike, McGovern said, the Red Cross wants to be ready even though it has no idea how damaging or costly the storm will be. It started a new fundraising appeal Monday, and will get a plug this weekend when the NFL encourages donations with on-air and in-stadium announcements during its games.
The Red Cross endured widespread criticism -- some from within its own ranks -- after Hurricane Katrina hit New Orleans in 2005. A report found overwhelmed volunteers, inflexible attitudes and inadequate anti-fraud measures.
One major change since then, McGovern said, is a greater focus on getting relief supplies into threatened areas before a hurricane arrives.
More broadly, McGovern said, the Red Cross needs steadier sources of financing in addition to what she called "episodic fundraising" -- the gifts, often relatively small, that pour in after a large-scale disaster rouses public sympathy.
She said that the Red Cross will always welcome these gifts, but it wants to encourage corporate donations and large contributions from wealthy individuals that are not tied to the latest disaster.
"The American public is going to be moved when they see a time of need," she said. "It's incumbent on us to be very clear about our mission so they understand there are other times to give, too. It's our responsibility to explain our mission better."
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