April 08, 2008

Red Cross Appoints New Chief Executive

The new president of the American Red Cross calls the charity “an incredibly powerful brand” that continues to resonate with the American people despite the “hits” that the charity has taken in recent years.

“This is a brand to die for,” Gail J. McGovern, who has been a marketing professor at the Harvard Business School for the past six years, said in an interview on Tuesday. “It creates a visceral reaction. When people see it, they know that help is on the way.”

Ms. McGovern spent 24 years at AT&T, where she rose to become executive vice president of the consumer-markets division. From 1999 to 2002, she held high-level management positions at Fidelity Investments.

She was named president of the American Red Cross on Tuesday, following a unanimous vote by its 25 trustees, and will start June 23.

The top job at the Red Cross has traditionally been a plum assignment, but the nation’s largest disaster relief organization is grappling with layoffs and a large budget deficit. Personal scandals and controversies over its response efforts have led to the resignation of five Red Cross presidents in the past nine years.

Ms. McGovern, who is 56, said she views the Red Cross presidency as the capstone of her career and intends to “stay for a long time.”

“If this were going to be easy, it wouldn’t be worth moving my family, changing my life, and jumping into something new,” she said. “If it isn’t hard, it’s not worth doing.”

170 Candidates Reviewed

The Red Cross, which is based in Washington, considered 170 people for the position and interviewed 20, according to Laura Howe, a spokeswoman for the charity. Ms. McGovern will earn a salary of $500,000 and receive a signing bonus of $65,000.

Ms. McGovern is a trustee at the Johns Hopkins University, and she co-chairs a campaign that initially set out to raise $2-billion over seven years. The campaign is two years ahead of schedule, and the goal has been raised to $3.2-billion. She also has organized fund-raising events for Children’s Hospital Boston, Dana-Farber Cancer Institute, and the United Way of Boston.

Fritz Schroeder, senior associate vice president for development at Johns Hopkins, said Ms. McGovern has been involved in strategy sessions on the campus, and has also met with potential donors who ultimately gave the university six-figure gifts.

“She’s an inspiring leader,” Mr. Schroeder said. “We literally drag her around the county to different regions where we don’t have people like Gail McGovern.”

Fund-Raising Struggles

The Red Cross faces a budget deficit of $200-million, and recently laid off 1,000 employees in its national and regional offices. The organization has been hurt by its inability to raise significant money during times when no major disasters have attracted attention to the charity.

Bonnie McElveen-Hunter, chairman of the Red Cross’s board, said the board voted unanimously to hire Ms. McGovern because it believed her marketing and fund-raising experience would help the charity find a solution to that problem.

“A CEO recently came up to me and said ‘We’ll be there for you during the next disaster,’” Ms. McElveen-Hunter said. “My response was, ‘We may not be there, unless we can sustain the organization through the times when we don’t make the front page in response to a disaster.’”

Ms. McGovern said her first priority would be to educate the public about the Red Cross’s role in everyday activities, such as handling the nation’s blood supply, teaching first aid and CPR, and responding to small fires at homes and apartments.

“Too often people think of the Red Cross only when there’s a national disaster,” Ms. McGovern said. “We help people every day at the grassroots level. When more people understand what the Red Cross does for this country, they’ll open up their minds and hearts and hopefully become financially active with the Red Cross.”

Ms. McGovern received a bachelor of arts in quantitative sciences from the Johns Hopkins University in 1974, and later earned an MBA from Columbia University.

The charity’s search for a new president was concluded in less than five months. It took the Red Cross 16 months to find Mark W. Everson, after Marsha J. Evans resigned in December 2005 amid criticism of the charity’s handling of Hurricane Katrina. Mr. Everson was on the job for just six months before he resigned after the board found that he had had an affair with the head of a Red Cross chapter in Mississippi.

Mary S. Elcano, who has been serving as the Red Cross’s acting president, will return to her position as the charity’s general counsel.

The Red Cross announced last month that Jeffrey T. Towers, a veteran fund raiser, will become chief development officer for the organization. He was previously a top fund raiser at the U.S. Fund for Unicef, in New York.