Westchester Red Cross Faces Financial Crisis

Westchester Red Cross Faces Financial Crisis

The local Red Cross chapter in Westchester County, north of New York City, is in such dire financial straits that it may have to close, which would leave the area without its disaster relief services, lifeguard and first-aid training, AIDS prevention education, and terrorism preparedness classes, the New York Times reports.

The chapter, which has accumulated a $500,000 deficit since July 2002, has only $100,000 in reserve — down from as much as $700,000 in past years and enough to keep the organization running for only thirty to forty days. Officials at the 105-year-old chapter point to the flagging economy, which has area residents scaling back or even discontinuing their giving in the face of shrinking incomes and rising property taxes, as the main culprit. Employees at the chapter also say their efforts have been undermined by the criticism leveled at the national Red Cross over its decision to divert funds intended for victims of the September 11, 2001, terrorist attacks to other purposes. "The general public holds nonprofits to very high standards of accountability," said Timothy Seiler, a professor of philanthropy at Indiana University. "When a slippage occurs, the public is more cautious about giving to that organization."

The Westchester chapter will receive $250,000 from the state by summer, which should keep it in business for another two to three months. It has also received a $50,000 pledge from Entergy, the company that owns and operates the Indian Point nuclear power plant in the area. But other large Westchester-based corporations, including IBM and PepsiCo, haven't contributed at all — much to the chagrin of the chapter's volunteer chairman, Michael Fix. "These big companies have a lot of employees living in the county, and they've been getting our service free."

If the chapter is forced to close, some of its operations would be taken over by the Greater New York chapter, which is based in New York City, while other services would be cut entirely. "I suppose if there were a fire in Westchester, people from the city could come in to do relief work," said Louis Bonomini, who has volunteered at the Westchester branch for thirteen years. "But it will take longer for somebody from the outside to come in. They won't know the local agencies or where to direct the victims. People won't get the service they deserve."

Yilu Zhao. "The Red Cross Faces Its Own Crisis." New York Times 04/27/2003.