American Red Cross

CharityWatch's rating of the American Red Cross includes the financial activities of the entities consolidated in the Red Cross audited financial statements for the fiscal year ended of June 30, 2021. These entities are described in the fiscal 2021 consolidated audit (Note 1(a) re: Organization and Basis of Presentation) as follows:

"...The Organization has national and international programs that are conducted by its headquarters, biomedical services, and chartered local chapters. Also, included in the consolidated financial statements are the net assets and operations of Boardman Indemnity Ltd., a 100% owned captive insurance subsidiary (through June 30, 2021) and ARC Receivables Company, LLC, a wholly owned bankruptcy-remote special purpose entity. All significant intra-organizational accounts and transactions have been eliminated [in the consolidated audit]."

According to The American National Red Cross audited Consolidated Statement of Activities for the year ended June 30, 2021, the Red Cross received donated in-kind services and materials on which it placed a total value of approximately $55,096,000.

According to the Red Cross consolidated audit of June 30, 2021 (Note 1(o) re: Contributed Services and Materials):

"...Contributed services for the year ended June 30, 2021 include the services of approximately 9,562 volunteers. The Organization recorded contributed services revenue and related expense of approximately $38 million. The $38 million and $34 million recorded in 2021 and 2020, respectively, represent primarily volunteer efforts in support of disaster services and services to the Armed Forces."

[Note: CharityWatch generally excludes the value of in-kind (non-cash) donations of goods and services from its calculations of Program % and Cost to Raise $100. More information on how grades are calculated and the treatment of in-kind donations can be found on the Our Process page.]

According to The American National Red Cross consolidated audit of June 30, 2021 (Note 1(a) re: Organization and Basis of Presentation):

"In March 2020, the World Health Organization declared the novel coronavirus (COVID-19) a pandemic impacting social interaction, travel, economies, and financial markets. The Organization has implemented extensive measures to protect the health and safety of its employees, volunteers, clients and communities and continues to adapt day to day operations and processes to safely carry out its mission. The American National Red Cross continues to monitor and assess the implications to its business, and take necessary actions to mitigate potential adverse consequences."

According to the American National Red Cross tax filing for the fiscal year ended June 30, 2021 re: Compensation, Supplemental Information (IRS Form 990, Schedule J, Part III):

Regarding nonfixed payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, line 7):

"Ms. McGovern [President & CEO] elected to not take incentive bonus for calendar year 2020 to enable the Red Cross to put additional funds to use for other charitable purposes in light of the global pandemic and its impact on the country and world.

"The amounts shown in Part II, Column B (ii) ['Bonus & incentive compensation'] for the Chief Operating Officer, the President Biomedical Services, the Chief Transformation Officer, the Chief Financial Officer, General Counsel, the Chief Human Resources Officer, the Chief Development Officer and the President [of] Humanitarian Services were paid based on written variable incentive plans, prior fiscal year performance and were approved by the compensation and management development committee of the board.

"The amount shown in Part II, Column B (ii) for the President, Training Services was paid based on a written incentive plan, prior fiscal year performance and was approved by the Chief Operating Officer. The amount shown in Part II, Column B (ii) for the SVP Donor Services and the SVP Biomed Sales & Marketing were based on a written incentive plan, prior fiscal year performance and was approved by the President Biomedical Services.

"The amounts shown in Part II, Column B (ii) for the Chief Information Officer and the Corporate Secretary & Chief of Staff were paid based on a written variable incentive plan, prior fiscal year performance and were approved by the President and CEO.

"All variable incentive plan payouts were reviewed by an outside independent compensation consultant and were documented in the minutes of the committee, all in accordance with the requirements for the rebuttable presumption of reasonableness under IRC Section 4958."

The reported "Bonus & incentive compensation" amounts by the Red Cross range from a high of $165,050 to a low of $43,739 for 13 total individuals in calendar year 2020. The $165,050 was paid to the Chief Operating Officer, Clifford Holtz, with reported total compensation of $781,120 in 2020. The reported total compensation for the other 12 individuals in 2020 ranges from $751,789 to $326,631 (IRS Form 990, Schedule J, Part II).