Attorney general, ARC reach charity agreement
Attorney General Bill Lockyer and the American Red Cross have
reached an agreement over executive compensation and disaster
relief solicitation. The new policy will be applied to California
chapters of the American Red Cross, but may soon apply to chapters
nationwide.
Attorney general, ARC reach charity agreement
Attorney General Bill Lockyer and the American Red Cross have reached an agreement over executive compensation and disaster relief solicitation. The new policy will be applied to California chapters of the American Red Cross, but may soon apply to chapters nationwide.
The agreement came after an investigation into ARC’s practices, in which it was discovered that Dodi Rotherman, a former CEO of the San Diego and Imperial counties chapter had been substantially overpaid from 1997-2001. At question also was the misappropriation of funds meant for victims of the Alpine-Viejas fire in 2001. At the time, donors were not told they would need to earmark funds to go to those victims.
“By protecting against excessive pay and strengthening fundraising disclosure, this agreement will benefit the Red Cross, its donors and disaster victims in desperate need of aid,” Lockyer said. “The Red Cross deserves credit for working with my office to address its problematic compensation and solicitation practices.”
The American Red Cross has changed its executive compensation policies and has rewritten the DonorDIRECT program so that prospective donors better understand how their donations will be used. The agreement allows for more oversight of ARC executive’s initial pay, merit raises and bonuses nationwide.
Service Area Executives will have responsibility for a number of local chapters and will approve compensation packages before they are offered to prospective hires. SAEs will also review salary adjustments and bonuses.
“Hopefully the reforms in this agreement will provide an operational template for the Red Cross chapters across the country,” Lockyer said. “I’m encouraged the organization has taken steps toward that objective.”
The other major change under the contract with the Attorney General’s office is a change to DonorDIRECT solicitations. The solicitations are sent through print media, direct mail or e-mail for the ARC’s national disaster relief fund. The fundraising efforts must include a disclosure statement, “The American Red Cross honors donor intent. If you wish to designate your donation to a specific disaster please do so at the time of your donation.”
