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VOL. 124 | NO. 126 | Tuesday, June 30, 2009

Red Cross Tries To Regain Footing After Layoffs

By Tom Wilemon

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HELP WANTED: Robert Hoguet, the executive director of the Mid-South Chapter of the American Red Cross, is seeking more corporate sponsors, individual donors and volunteers to help the organization raise its profile and improve its finances. -- PHOTO BY TOM WILEMON

The institution that should be the bedrock of stability for any disaster needs more community support to fulfill that mission.

The Mid-South Chapter of the American Red Cross is rebuilding its financial footing one month after laying off a third of its staff. That goal requires volunteers as much as money, said Robert Hoguet, the organization’s executive director.

The Red Cross is expanding its board, which currently has no representatives from nearby DeSoto or Crittenden counties, as it seeks to recruit more community leaders. It also needs volunteers with expertise in specific areas.

“We need volunteers of all stripes,” Hoguet said. “This doesn’t mean you have to be somebody getting up at 3 a.m. when the fire happens. We certainly need those folks, but maybe you want to help in our health and safety department by maintaining the equipment for our instructors and help us keep our costs down. Or maybe you’re a photographer who can do stuff when there is a need for publicity. Or maybe you’re someone who likes to work at a special event.”

Money and manpower

At the top of the list are volunteers with information technology expertise, he said. Hoguet is of the opinion that the money will follow the volunteers.

Although the prolonged recession was a factor for the chapter laying off nine of its 26 employees and reducing four additional employees to part-time status, the chapter had actually been losing money and drawing down on assets in prior years.

When Elise Smithwick Miles died in 2005, she left the Mid-South Chapter $1.8 million. That money helped the Red Cross offset increased expenses from multiple disasters.

The chapter’s assets decreased $335,634 for the fiscal year ended June 30, 2006, and $282,682 for the fiscal year ended June 30, 2007. The next fiscal year, the figure ballooned to $938,106.

When the recession hit, the chapter’s return on investments could no longer offset costs. Investment income of more $400,000 for the year ended June 30, 2007, became an investment loss of $86,000 for the year ended June 30, 2008. The investment fund has continued to suffer with the worsening economy.

Simultaneous to these events, cash flow suffered because of a turnover in the fundraising staff.

“The chapter has been losing money for a number of years,” Hoguet said. “We’ve been able to live on that because we had a significant bequest back in 2005 from an estate. We’ve unfortunately consumed some of that to keep our operations going.”

Not a government agency

The Red Cross also had to deal with a $100,000 drop from the United Way of the Mid-South after a series of disasters.

“As much as the reductions from the United Way have been difficult to absorb, I don’t want to be critical of them because I’m a believer in the United Way,” Hoguet said. “They are still our single most source of funding.”

The United Way’s support for the Red Cross is $721,844 this year. The service areas for the two nonprofit agencies are almost mirror images. The Red Cross in recent years has assisted people in the Mid-South through tornadoes and fires as well as hurricane evacuations.

“The last year, meaning our fiscal 2008 year, was extremely dramatic for us in our disasters,” he said. “We had two tornadoes of significance. One in Hickory Hill right here in Memphis and one in Earle, Ark. This chapter covers seven counties. We touch three states.”

The Red Cross also had a record number of families who needed help after fires.

An expanded board of directors with vocal supporters is key to putting the Red Cross back on solid footing, Hoguet said. The board has been expanded from 10 to 14 members, and the organization is looking to add another 10.

Special events, such as a February fundraiser for the organization at Harrah’s Tunica and a wine and food pairing in Germantown, have helped to increase visibility. The Red Cross has also replaced fundraising staff. Their mission is to sign up more corporate sponsors and individual donors.

The organization’s current fiscal year ends this week so the numbers haven’t been added up yet for what is likely to be another loss.

“One of our advantages and disadvantages is that we have one of the most recognizable symbols in the world,” Hoguet said. “People think we are part of the government. They think we are financially supported by the government, and we’re not.”

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