Amid Capitol Hill Criticism, Red Cross Board ‘100 Percent’ Confident in CEO

The Board of Governors of the American Red Cross has doubled down on its support for CEO Gail McGovern, one week after Sen. Charles Grassley released a withering report on the nonprofit’s spending and openness.

“Gail McGovern is respected, admired, and really has 100 percent confidence of the board,” Bonnie McElveen-Hunter, the board’s chairwoman, said in an interview Thursday. “Frankly, we think the nation should be casting laurels at her feet.”

The Grassley report, born out of an 18-month inquiry about the Red Cross response to the 2010 Haiti earthquake, accuses Ms. McGovern of gutting the charity’s in-house ethics and investigation unit and trying to snuff out a Congressional review of the nonprofit’s practices. The senator’s office also said the Red Cross spent a quarter of the $487.6 million it raised for Haiti relief on program management, fundraising, and other overhead expenses. The charity contends it spent only 9 percent of Haiti donations on those activities.

Mr. Grassley, an Iowa Republican, launched an investigation of the prominent charity, which ranked 21st on The Chronicle’s most recent Philanthropy 400 list of the biggest U.S. nonprofits, in January 2015 following media reports that raised questions about the Red Cross’s leadership and handling of recent disasters. He has criticized the charity’s “lack of disclosure” about how it spends money donated for relief efforts.

Ms. McElveen-Hunter said the board learned of the report’s release last week from the media. She said the governors support the senator’s recommendation that the charity beef up its internal investigation unit, but “we respectfully and fundamentally disagree” with his other findings. She said costs that the report identifies as overhead were essential to delivering aid.

“There is not a single finding of fraud or abuse in the Haiti assistance program,” Ms. McElveen-Hunter said. “We accounted for every single penny we spent in Haiti. If you want a complete breakdown, it’s on our website for the public to see.”

‘Slight Surplus’

Among the reasons Ms. McElveen-Hunter gave for the board’s continued support of Ms. McGovern is the CEO’s financial stewardship in guiding the Red Cross from a $200-million annual operating deficit to a “slight surplus” at the end of fiscal year 2016.

The spate of negative publicity surrounding one of America’s most iconic charities has stirred fears that it will dampen public trust in nonprofits as a whole, and a New York Times editorial last week expressed concern that the bad press would make people hesitant to give to the Red Cross in response to future disasters.

When asked what the board would do to restore trust in the Red Cross, Ms. McElveen-Hunter said such efforts were unnecessary.

“I’m quite comfortable and confident that the American people who have supported us have every justification to continue that support going forward,” she said.

ProPublica, a nonprofit news outlet whose reporting with NPR spurred the Grassley review, is also doubling down. This week, it launched the Red Cross Reporting Network, an effort to help reporters across the country investigate the charity for their own publications.