Transparency in the Face of Complexity

American Red Cross Faces Transparency ChallengesBusiness visionary, Peter Drucker, once said, “Doing the right thing is more important than doing the thing right.” The American Red Cross has been doing the right thing for more than 130 years. Unfortunately, Haiti’s earthquake recovery efforts in 2010 turned out to be more than it could handle. The overwhelming destruction led to massive promises by the organization with very little to show for it.

Today, the American Red Cross is still not completely transparent about how the $487 million in recovery donations were spent, and it continues to stonewall Senator Grassley and the U.S. Judiciary Committee. As a result, a lack of community confidence has affected ARC’s recent disaster efforts to the extent that organizations like the Canadian Red Cross are setting themselves apart from their American counterpart. Some agencies are even discouraging online giving to it.

What’s really going on at the American Red Cross?

What’s at play behind closed doors at the American Red Cross? Perhaps the realization that tracking millions of dollars in pledges, and following through to ensure they are spent correctly is a highly complex task on a massive scale. But equally important is what’s not at play: transparency in handling this immense challenge. You see, transparency is sometimes easier during the good times, but it’s especially critical during bad times.

Transparency is sometimes easier during the good times, but it’s especially critical during bad times. tweet

The American Red Cross is not the only nonprofit to face the transparency dilemma during difficult times. Global health advocacy organization, ONE, had experienced the same challenges, but on a larger stage, attempting to track billions of donations worldwide for Ebola in 2015, but it chose a different path. ONE openly reported its shortcomings with donor tracking and fulfillment while proposing lessons learned and possible solutions. It went so far as to ask for input on how things could improve.

It’s entirely possible that the American Red Cross is tangled in a complex web of financials and is withholding information until it can get the facts right. Yet I can’t help but think a transparent approach would be a relief to ARC’s leadership team. How could we blame them for enlisting help? The public’s response couldn’t be any worse than the mounting suspicion that is currently building around them.

We talk a lot about the importance of transparency in the corporate world and, for better or worse, we hold nonprofits to a higher standard. My hope is that the American Red Cross soon learns the value of transparency during the best and worst of times so they can restore donor trust and continue to be a dependable resource during desperate times.

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