Charity Review

  • Issued: August 2017
  • Expires: November 2019

American Red Cross

Accredited Charity

Meets Standards


431 18th Street NW
Washington, DC 20006
Accredited Charity


431 18th Street NW
Washington, DC 20006
Accredited Charity

Accredited Charity

Meets Standards

Standards For Charity Accountability


  1. Board Oversight

    Standard 1 (Oversight of Operations and Staff)

    Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.

    The organization meets this standard.

  2. Board Size

    Standard 2 (Number of Board Members)

    Soliciting organizations shall have a board of directors with a minimum of five voting members.

    The organization meets this standard.

  3. Board Meetings

    Standard 3 (Frequency and Attendance of Board Meetings)

    An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.

    The organization meets this standard.

  4. Board Compensation

    Standard 4 (Compensated Board Members)

    Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.

    The organization meets this standard.

  5. Conflict of Interest

    Standard 5 (Conflict of Interest)

    No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.

    The organization meets this standard.

Measuring Effectiveness

  1. Effectiveness Policy

    Standard 6 (Board Policy on Effectiveness)

    Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.

    The organization meets this standard.

  2. Effectiveness Report

    Standard 7 (Board Approval of Written Report on Effectiveness)

    Submit to the organization's governing body, for its approval, a written report that outlines the results of the aforementioned performance and effectiveness assessment and recommendations for future actions.

    The organization meets this standard.


  1. Program Expenses

    Standard 8 (Program Service Expense Ratio)

    Spend at least 65% of its total expenses on program activities.

    The organization meets this standard.

  2. Fundraising Expenses

    Standard 9 (Fund Raising Expense Ratio)

    Spending should be no more than 35% of related contributions on fund raising. Related contributions include donations, legacies, and other gifts received as a result of fund raising efforts.

    The organization meets this standard.

  3. Accumulating Funds

    Standard 10 (Ending Net Assets)

    Avoid accumulating funds that could be used for current program activities. To meet this standard, the charity's unrestricted net assets available for use should not be more than three times the size of the past year's expenses or three times the size of the current year's budget, whichever is higher.

    The organization meets this standard.

  4. Audit Report

    Standard 11 (Financial Statements)

    Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles. When total annual gross income exceeds $500,000, these statements should be audited in accordance with generally accepted auditing standards. For charities whose annual gross income is less than $500,000, a review by a certified public accountant is sufficient to meet this standard. For charities whose annual gross income is less than $250,000, an internally produced, complete financial statement is sufficient to meet this standard.

    The organization meets this standard.

  5. Detailed Expense Breakdown

    Standard 12 (Detailed Functional Breakdown of Expenses)

    Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.

    The organization meets this standard.

  6. Accurate Expense Reporting

    Standard 13 (Accuracy of Expenses in Financial Statements)

    Accurately report the charity's expenses, including any joint cost allocations, in its financial statements. For example, audited or unaudited statements which inaccurately claim zero fund raising expenses or otherwise understate the amount a charity spends on fund raising, and/or overstate the amount it spends on programs will not meet this standard.

    The organization meets this standard.

  7. Budget Plan

    Standard 14 (Budget)

    Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.

    The organization meets this standard.

Fundraising & Info

  1. Truthful Materials

    Standard 15 (Misleading Appeals)

    Have solicitations and informational materials, distributed by any means, that are accurate, truthful and not misleading, both in whole and in part. Appeals that omit a clear description of program(s) for which contributions are sought will not meet this standard. A charity should also be able to substantiate that the timing and nature of its expenditures are in accordance with what is stated, expressed, or implied in the charity's solicitations.

    The organization meets this standard.

  2. Annual Report

    Standard 16 (Annual Report)

    Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.

    The organization meets this standard.

  3. Website Disclosures

    Standard 17 (Web Site Disclosures)

    Include on any charity websites that solicit contributions, the same information that is recommended for annual reports, as well as the mailing address of the charity and electronic access to its most recent IRS Form 990.

    The organization meets this standard.

  4. Donor Privacy

    Standard 18 (Privacy for Written Appeals & Internet Privacy)

    Address privacy concerns of donors by (a) providing in written appeals, at least annually, a means (e.g., such as a check off box) for both new and continuing donors to inform the charity if they do not want their name and address shared outside the organization, (b) providing a clear, prominent and easily accessible privacy policy on any of its websites that tells visitors (i) what information, if any, is being collected about them by the charity and how this information will be used, (ii) how to contact the charity to review personal information collected and request corrections, (iii) how to inform the charity (e.g., a check off box) that the visitor does not wish his/her personal information to be shared outside the organization, and (iv) what security measures the charity has in place to protect personal information.

    The organization meets this standard.

  5. Cause Marketing Disclosures

    Standard 19 (Cause Related Marketing)

    Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: (a) the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), (b) the duration of the campaign (e.g., the month of October), (c) any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).

    The organization meets this standard.

  6. Complaints

    Standard 20 (Complaints)

    Respond promptly to and act on complaints brought to its attention by the BBB Wise Giving Alliance and/or local Better Business Bureaus about fund raising practices, privacy policy violations and/or other issues.

    The organization meets this standard.


American Red Cross meets the 20 Standards for Charity Accountability.


This report covers the activities of the national office as well as local offices of the Red Cross in the United States.


Complaints processed by the BBB in the last 36 months: 4

Telemarketing complaints: The organization addressed the complaint issues brought to its attention: 2

Mailing list removal: The organization addressed the complaint issues brought to its attention: 1

Program services: The organization addressed the complaint issues brought to its attention: 1



  • Year, State Incorporated

    1905, DC

  • Affiliates

    Boardman Indemnity Ltd

  • Stated Purpose

    "to prevent and alleviate human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors."


The Red Cross provides biomedical services as well as services in five other areas: (1) Domestic Disaster Services, (2) Health and Safety Services, (3) International Relief (4) Community Services and (5) Service to the Armed Forces. The Red Cross reports that it responds to nearly 66,000 disasters in the U.S. every year, ranging from home fires that affect a single family to hurricanes that affect tens of thousands, to earthquakes that impact millions. The organization reports that it helps an average of 160,000 military families and veterans annually prepare for, cope with, and respond to the challenges of military service through a range of support services. The Red Cross reports that it is the largest single supplier of blood and blood products in the U.S. Nearly 3 million people donate approximately 5.1 million units of blood through the Red Cross each year. The Red Cross also provides health and safety courses, including CPR and First Aid training. The organization reports that more than 6.25 million Americans participate in its training programs each year. The Red Cross reports it is part of one of the world’s largest humanitarian networks with 17 million volunteers in 190 countries. The organization reports that it reaches an average of more than 140 million people across the globe each year by responding to disasters, building safer communities, and educating future humanitarians. During the past six years, the Red Cross was reorganized. The Red Cross reports that budgets, back office systems, purchasing functions and other tasks have been consolidated to become more efficient and to enable local affiliates to provide more focus on program service delivery including the management of volunteers. In addition, the Red Cross noted that this reorganization helped streamline its decision-making process and financial management. In addition to the program information included in this report, American Red Cross provided BBB WGA with detailed data on the level of major Red Cross services in the past year on a state by state basis. A PDF version of this can be viewed by going to

For the year ended June 30, 2016, American Red Cross's program expenses were:

Biomedical services $1,736,307,000
Domestic disaster services $332,740,000
Health and safety services $148,310,000
International relief and development $119,709,000
Community services $33,164,000
Services to the Armed Forces $65,231,000
Total Program Expenses: $2,435,461,000

Governance & Staff

  • Chief Executive

    Gail McGovern, President and CEO

  • Compensation*


  • Chair of the Board

    Bonnie McElveen-Hunter

  • Chair's Profession / Business Affiliation

    CEO and Owner, Pace Communications

  • Board Size


  • Paid Staff Size


*2014 compensation includes annual salary and, if applicable, benefit plans, expense accounts, and other allowances.


Method(s) Used:

Direct mail, special events, print advertisements, television, radio, grant proposals, Internet appeals, planned giving, cause-related marketing, membership appeals, and text to give campaigns.

Fundraising costs were 28% of related contributions. (Related contributions, which totaled $602,473,000, are donations received as a result of fundraising activities.)

Tax Status

This organization is tax-exempt under section 501(c)(3) of the Internal Revenue Code. It is eligible to receive contributions deductible as charitable donations for federal income tax purposes.


The following information is based on American Red Cross's audited financial statements - consolidated for the year ended June 30, 2016.

Source of Funds
Biomedical $1,746,336,000
Corporate, foundation and individual giving $378,436,000
Program materials $132,606,000
Legacies and bequests $96,824,000
Investment income $85,341,000
Contracts $74,119,000
United Way and other federated $65,860,000
Services and materials $61,353,000
Other revenue $19,263,000
Total Income $2,660,138,000
  • Programs: 90%
  • Fundraising: 6%
  • Administrative: 4%
Total Income $2,660,138,000
Program expenses $2,435,461,000
Fundraising expenses $169,676,000
Administrative expenses $116,402,000
Other expenses $0
Total expenses: $2,721,539,000
Expenses in Excess of Income (($61,401,000))
Beginning Net Assets $1,593,810,000
Other Changes In Net Assets ($546,736,000)
Ending Net Assets $985,673,000
Total Liabilities $2,250,133,000
Total Assets $3,235,806,000

Note 1: For the year ended June 30, 2016, the Red Cross reported in-kind donations of $23,744,304 including food inventory ($7,583,297), donated services and use of facilities ($6,919,119), other ($5,964,575), clothing and household goods ($2,134,920), cars and other vehicles ($928,070), drugs and medical supplies ($211,225), and books and publications ($3,098). Note 2: In the above financial section, "other changes in net assets" represents pension-related changes other than net periodic benefit cost (-$400,351,000) and nonoperating investment losses (-$146,385,000).

An organization may change its practices at any time without notice. A copy of this report has been shared with the organization prior to publication. It is not intended to recommend or deprecate, and is furnished solely to assist you in exercising your own judgment. If the report is about a charity and states the charity meets or does not meet the Standards for Charity Accountability, it reflects the results of an evaluation of information and materials provided voluntarily by the charity. The name Better Business Bureau is a registered service mark of the Council of Better Business Bureaus, Inc.

This report is not to be used for fundraising or promotional purposes.