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Chattanooga: Red Cross in the red

By: Emily Bregel
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Barbara Alexander

The local chapter of the American Red Cross is experiencing a financial crisis that could eventually force the agency to close down or scale back its services locally, officials said.

“I don’t think people quite realize the situation. There is a chance we could either shut the doors or certainly change into a much different operation than what we are,” said Barbara Alexander, executive director of the Red Cross’s Greater Chattanooga Area Chapter, which has operated in the Scenic City for 91 years.

To meet its annual budget, the local Red Cross must raise $1.2 million by the end of the fiscal year on June 30, said Hugh Prevost, the chapter’s board chairman and director of the University of Tennessee at Chattanooga’s international exchange programs.

This week, the organization is making plans to raise awareness about its local needs locally and organizers have reached out to leaders for help, officials said.

The Chattanooga Area American Red Cross provides assistance during small- and large-scale disasters, as well as volunteer training.

The local chapter has been operating in “deficit mode” for the last six years, spokeswoman Claudia Moore said. Over the last two to three years, the local chapter has cut a number of full-time positions and transformed others into part-time positions, Ms. Alexander said.

“There’s nothing left to cut. It’s a tight ship,” she said.

A surge in demand this year, combined with a 10 percent dip in donations, has constrained the agency even further, officials have said. The chapter has been drawing on its reserve funds, burning through about $700,000 in savings over the past six years, officials said.

The reserve fund currently has $150,000 in it, while in past years, the reserve has held about $1 million, Ms. Alexander said.

With a redoubled focus on requesting donations, the Red Cross has improved its annual deficit from a loss of $300,000 at the end of fiscal year 2007 to a loss of $143,000 in the fiscal year that ended June 30, Ms. Alexander said.

“We did make progress this past year ... but we’re just not where we need to be to survive,” she said.

Representatives of the mayor’s office met with local Red Cross officials last week to discuss their financial concerns and the possibility of both Chattanooga Mayor Ron Littlefield and Hamilton County Mayor Claude Ramsey getting involved in some public service announcements.

Mr. Ramsey said he hopes the community will dig deep to help the local agency.

“I’m always amazed with what this community (can do) when they decide to do something,” he said. “I know times are tough for some folks, but for those who can, I hope they’ll help because the Red Cross is there to help us when we need it.”

In addition to meeting their own funding needs, Tennessee’s Red Cross chapters are required to raise a total of $1.8 million to go toward the national disaster fund for the American Red Cross.

“Part of our charter is to help the national Red Cross raise funds and, at the same time, we have to ensure we can continue to help the people in the greater Chattanooga area,” Ms. Moore said. “We really need the community support to be able to continue to fulfill our mission.”

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