American Red Cross: Under Fire
Hunsaker, Johanna, Journal of the International Academy for Case Studies
This case is directed towards undergraduates and graduate students in management classes and classes in non-profit organizations. Depending on the focus of the class, different case questions can be emphasized for students in management classes, leadership classes and those enrolled in non-profit classes.
The case deals primarily with the governance of the San Diego Imperial County Chapter of the American Red Cross in the early part of this decade during, after the debilitating Viejas fire. The chapter's CEO, Dodie Rotherham, seemingly cared more for raising donations to better the chapter than caring for the people in need and the community. Rotherham ignored the internal conflicts of the organization preferring to be out in the public to raise donations. She lost sight of the principal core values of the organization; provide relief to victims and help people prevent, prepare for and respond to emergencies. Because Rotherham and the organization lost touch with the community, the community rose up against the organization when it was discovered that the organization used the donations for the fire victims inappropriately. The organization had to change to survive. The key to its survival was the rebuilding of the trust of the community by removing all of the leaders (CEO and Board of Directors) and developing an organizational culture change that promoted openness, change and development.
The purpose of this case is to demonstrate the effects of leadership on a non-profit organization. Discussion of this case brings about the understanding of the problems that can arise when leadership abandons the organization's mission and goals. Students will have a better understanding of what can happen if management loses focus of the organization's goals and mission. Additionally, students will see that it is difficult to regain the confidence of community when the organization loses touch with the community. The student will learn the espoused values of the Red Cross, the values under Dodie Rotherham, and after Rotherham left the Red Cross, the values Jerry Sanders and Ronne Froman attempted to bring to the organization.
The American Red Cross, a humanitarian organization led by volunteers and guided by its Congressional Charter and the Fundamental Principles of the International Red Cross Movement, will provide relief to victims of disaster and help people prevent, prepare for, and respond to emergencies.
The fire came without warning. In the early morning hours of January 3, 2001, several families had to flee their homes with only the clothes on their back to escape the blaze that became known as the Viejas fire. The fire started on the Viejas Indian Reservation, east of Alpine, CA. Due to dry conditions and heavy winds, it burned for six days, where it charred more than 10,000 acres, destroying homes and vehicles, killing animals and livestock, and disrupting lives. Total damage estimates ranged from $1.8 million to $8 million. Victims of the fire started out their New Year in devastation and looked to the local chapter of the American Red Cross, an institution designed to assist in disasters, to help in their loss. Donations from the community streamed into the San Diego chapter of the Red Cross for use towards the fire victims. However, victims of the fire felt that they did not receive the level of comfort and support expected from this trusted non-profit organization. Their phone calls to the local chapter went unanswered. At a meeting, victims expressed their concern over the use of the funds collected on their behalf. Dodie Rotherham, the San Diego/Imperial County chapter CEO for the Red Cross, called the meeting a "bitchfest." Victims received very little financial support to restart their lives. Later, audits revealed that the Red Cross received over $400,000 in donations after the fire, but of that total, only $7,000 was used for the victims. …