After Layoffs, Red Cross Future Cloudy

By Beacon Staff

Last summer, Bernadette Larson packed her bags in Minnesota and headed to a new job in the Flathead, arriving with hopes of revitalizing the American Red Cross in Northwest Montana. Fast-forward nine months and Larson is job searching, a casualty of Red Cross’s widespread financial struggles.

Larson, the program specialist for Red Cross in Northwest Montana, and Gayle Wilhelm, the western regional director, were told on Feb. 26 they are part of an effort by Montana Red Cross to cut back expenses by laying off employees. Along with Larson and Wilhelm, who both work out of Kalispell, Red Cross is un-staffing its offices in Billings and Helena, leaving six paid employees and three staffed offices, down from six, statewide. Fourteen months ago there were 17 employees.

Wilhelm and Larson keep their jobs until March 28. After then, they fear the Red Cross office won’t survive in Northwest Montana on a volunteer-only basis. The blood service branch, however, operates independently and will be unaffected.

“I’m very disappointed,” Larson said. “I’m disappointed for the volunteers and the communities we serve.”

Wilhelm added: “We’ve always assumed Red Cross would be here.”

The American Red Cross is struggling nationwide. Staff reductions are occurring on the national, regional and state levels. When the 2008 fiscal year ends in June, Rod Kopp, the CEO for Montana Red Cross, said his chapter will have accumulated a $250,000 deficit. Kopp said that number is essentially on par with recent trends – the Montana chapter has been in debt for five years.

Last January, Red Cross’s national board voted to cut 1,000 of its 3,000 employees at its top headquarters, citing a $200 million deficit caused by low fundraising and overspending in recent years. A significant factor in the low fundraising, officials said, is the lack of major disasters – which attract large donations – since Hurricane Katrina in 2005. Kopp said the slowing economy this year, combined with increasing competition for the donor dollar between a growing number of nonprofits, has exacerbated the Montana chapter’s financial woes.

On Feb. 26, Kopp arrived in Kalispell and handed Wilhelm and Larson a letter informing them of their layoffs. Larson said the news “was totally out of the blue.” Wilhelm and Larson both expressed concern for the future of Northwest Montana disaster services. Red Cross volunteers will no doubt continue to contribute in the region, they said, but not to the point of managing a fully capable office, as Kopp is banking on.

“Volunteers need a management structure,” Larson said. “You need a fallback – who’s that going to be now?”

Kopp said he considered un-staffing Missoula’s office instead of Kalispell’s. Since Wilhelm took over as the western regional director more than a year ago, the Kalispell office has contributed 21 percent of the chapter’s total income and Missoula has contributed 19 percent under her direction. Despite Kalispell bringing in more money, Kopp argued that Missoula is a more fitting command center location. He said choosing between Kalispell and Missoula was “a hard decision.”

Red Cross responds to fires, floods and other natural disasters, often setting up and running shelters for displaced residents. Missoula is now the closest staffed office, though response teams will still be here.

“We’ve responded to Eureka and that’s a stretch for us,” Larson said. “Are they going to be able to do that from Missoula? Sometimes we are the only people there to help. It’s a huge fear that this area won’t get that help.”

Kopp says Red Cross “will certainly have to do some rebuilding in Kalispell,” but he thinks with an expanded volunteer force the region will be fine. Kopp points to Butte as a model. The Butte office has been volunteer-run for more than a year and he said it has one of the best disaster response teams in the state. Butte lost its paid staff because of financials ills too.

Fourteen months ago, Kopp said, Red Cross cut six of its 17 paid positions across the state, leaving 11, though one has been vacant. The most recent lay-off leaves the state with six paid employees in three offices: two in Bozeman, two in Missoula and two in Great Falls, the organization’s headquarters. Kopp said a greater reliance on volunteers is natural for Red Cross.

“We’re getting back to our roots,” he said. “Right now there will be a little bit of turmoil, which is understandable.”

David Block, the CEO for the Wyoming chapter, has managed to buck Red Cross’s national trend of staff reduction. By petitioning local governments and private corporations for money, as well as focusing on health and safety as a revenue generator, Block said Wyoming has been operating in the black the past two years following a time of debt. Wyoming has increased its paid staff to 22 – 16 more than Montana. But other nearby states, like Idaho, have made significant staff reductions in recent years.

“We’re in the black and we’re holding our own,” Block said. “Not wealthy, just holding our own.”

When Kopp took over in late 2006, Red Cross was using up the last of its $1 million in reserve funds. Despite the financial woes, Kopp said he believed increased fundraising efforts would be sufficient to help the organization push through. He was confident enough that he made the decision to hire Larson even after the first round of staff reduction.

Larson thinks the organization should have came up with a clearer plan to cope with the mounting debt.

“I understand the reasoning behind (these cuts),” she said. “But what I don’t understand is how it got this far when you knew in 2006 the situation was dire. There should have been a plan, an aggressive plan.”

As program specialist, Larson is also in charge of two other Red Cross branches aside from disaster services: military communication and health and safety. Kopp said he recently worked out a contract with another Red Cross chapter to handle Montana’s military communications. As for the health and safety branch, which includes Red Cross’s well-known CPR and first aid classes, Larson is worried she will have to cancel scheduled community events unless volunteers are able to administer them.

Karen Davison, chairwoman for Kalispell’s office’s advisory board, believes the layoffs will reverberate not only through this region, but across the state.

“This is going to turn upside down thousands of lives around Montana,” Davison said.