I was here in 2006—early 2006—and I recognize some of you from that audience, and I'm pleased to be back again.
It's interesting. I really have had the privilege of running two important American institutions. It's an honor not afforded to too many people.
Now, the IRS is critical to our democracy and respect for the rule of law on the one hand. But if you look at the American Red Cross, it speaks to the values we share as Americans and our commitment to each other and to those in need.
So that covers a real range. But it's just such a privilege for me, just as Leigh said, to continue my career in public service, but in another form.
Now there are differences. When I was pretty far along in the process, I sat down and I told my kids that I thought I would no longer be the Commissioner of the IRS and soon I was going to run the Red Cross. And my daughter Emma said, "Well, now people will like you."
And that IS different.
But there are some similarities. I used to get letters. I'd twinge when I'd get a letter from the IRS. I've been paying taxes for years and didn't like getting correspondence from the IRS. But, it would just be a notification about a change in my dental plan or something like that when you opened it up.
But now, I got my first letter the other day from the American Red Cross, and it was a letter TO Mark W. Everson, FROM Mark W. Everson, asking me for money!
What can you do?
I look back on the record I achieved at the IRS with some pride. If you look at the numbers that were just released, at the end of the government's fiscal year this past September 30th, we had record revenues. They'd increased significantly over the last three years, again, up almost 7 percent from the year before. And they returned to a level in excess of the historic level of 18.8 percent of GDP.
I think that reflects that clearly there's more compliance because the revenues have been growing faster the last several years than the GDP has been growing.
So I'm proud of the record. And I thing we got the balance between service and enforcement just about right. If I had any concern in reflection, I think we may have come down a little too hard on the charities.
Let me turn to the Red Cross.
It's a unique humanitarian organization. We are part of the largest and most experienced humanitarian network in the world, with almost 200 national societies around the globe that work to help those in need. We are also part of a Movement that is grounded in seven real values: humanity, impartiality, neutrality, independence, voluntary service, unity and universality.
So there's a set of standards that are embraced by all of these organizations around the world and which we are a part of, as an American Red Cross, that grounds us in a way that is very powerful and provides us an impetus within this important movement. Most importantly I would say we are a trusted symbol. The Red Cross is a trusted symbol here and around the world.
Let me tell you just one story. I was in Boston, some months ago—early tour in July–and I was meeting with a woman who was Polish by birth. She's been in this country for about ten years and helped coordinate our International programs in Boston. And she was talking about a woman from West Africa. She was undocumented, here in the country. She'd been in the country for several years. She was asking for help locating relatives who she thought were also here.
I said, "Why did she come to us? Are you looking for these people? Why did she come to us?" And the answer was, she came to us because she trusted the Red Cross from her own country, from the work that we did in her own country. It's a powerful uniting symbol around the world.
Leading the Red Cross, I look at my responsibilities from two perspectives.
The first is purely a managerial perspective, if you will. I'm responsible to make sure that I increase the capabilities of the organization during a very demanding period – the 21st Century, where we need to step up and do more for ALL Americans.
Secondly, I need to make sure that we are better managed, that we are more efficient, and that we drive down our costs, which have become too great. We've added to our capabilities. This required an additional investment of funds. And we have also added to our overhead, our cost structure, in ways that are not sustainable. All told, we have a large operating deficit on a continuing basis.
Now, Bill didn't emphasize this in the recruiting process.
It's something that I got a better picture of when I was in the job. But it's a real issue. So, as we've invested more in our capabilities, we have not cut our costs enough. And we will not balance the budget—which is out of balance by about $150 million a year, believe it or not—purely by cutting costs, which we will do. But we will need to increase our revenues as well…the donations and the other sources of revenues.
I'm convinced that we can do all three of these things: Increase operating capabilities; become more efficient; drive down costs and bring up our revenues; and bring the organization into balance. But it's a lot to do.
The second way I look at the job is in terms of our mission. And that's, of course, why our 35,000 employees, our one million volunteers, our millions of blood donors, and I sign on and help the organization. It's because of the mission.
And when I speak of our mission, I always start with our Blood Services. The American Red Cross collects, processes and distributes over forty percent of the nation's blood supply. Over 40 percent of our nation's blood supply. That is Job One.
Here in Northern Ohio, we work with and supply blood to 57 hospitals. A very significant presence here, including organizations like the Cleveland Clinic. Every life saved is precious, and it really is quite compelling on an individual basis.
Another story. Early on in my first month, I was down in Atlanta. We were dedicating a new facility and several of us took the stage. One was a very handsome young woman, 19 years old, named Katie Wootton. She was an amputee above the elbow.
Almost exactly two years earlier, on the last day of her spring break, getting ready to finish high school, she was out on a boat with a bunch of her friends. She stood up to take off her jacket, caught a wave, fell off the boat, and was dragged under the boat. The propeller ripped her arm, broke some of her ribs—all kinds of damage. Somebody had a cell phone. By the time they got to shore, there was a medical team. The helicopter came and she'd lost enough blood that she would have died before she got to the hospital, but for the emergency transfusion.
That's what this is about. Now she's doing great. She's starting college. She's a living testimony to what everybody does to make this system work…from the donor, to the volunteer, to the Red Cross staff, to the people in the hospital. It's really remarkable.
But beyond that impact on people like Katie, we have another role because of our sheer scale, which is as a fundamental component of our nation's healthcare system. We are relied upon to work with the CDC, NIH and others to say "What is happening nationally?" In terms of the prevalence of diseases, let alone all the way up to if we, God forbid, we get to where there's a pandemic flu, there will be tremendous stakes for the healthcare system and the provision of blood. It's a very important responsibility, and we're IT. We're six times the size of the next largest organization in terms of the collection of blood. So we really do play an important national role.
We're under challenges here. We've been operating under a Consent Decree from the Food and Drug Administration for 14 years. That's not acceptable. The blood is safe, but we don't have standard operating procedures across the country.
We need to make sure we've improved the quality of our operations, operating consistently, and get out from under that. The FDA's not after us. They're a score card on how we're running the operation. We just can't tolerate this.
We need to grow our collections, which have been sort of flat. And we need to make sure we're looking at our cost structure because we have a lot of extra capacity in the terms of our processes. If we do all that, we'll continue to be that anchor for this important system. The Blood Services has to be Job One, just because of what's at stake.
The second area that I emphasize is one that is, while less significant in terms of mass, but which I think is incredibly important to this country. It's one that we need to change quite a bit, and there's a real opportunity, and that's our assistance to members of the military and to their families.
If you think back to the growth of the American Red Cross, it really grew out of Clara Barton's work on the battle grounds of the Civil War. And then it expanded, exploded if you will, to some eight million members during World War I, when it was very much seen as a support of the national mobilization efforts in support of the military, championed very directly by President Wilson.
We have scaled back since Vietnam our activities in support of the military. It's in part because more services have been provided by the military and the government. But some have also indicated that we, with our close association with the military, also felt some of that heat of the discomfort that the country had with uniformed services and all the things that were happening in the sixties and seventies.
I've seen that we had scaled back to the degree that we did, although, when you look across the country, particularly where we have large military installations, many of our chapters have continued to provide aid to families. But it hasn't been championed directly as a national priority for several decades.
I'd like to do more. I think there is demonstrably great need in this area right now—particularly because of the deployments that we have, well beyond the issue of just the war. It's not a question of where you come down on the war. But we have a large military structure and particularly with the Reserve and Guard now, the deployments are significant with a real impact on families.
We can play an important role. We do great things now. I've been out to Walter Reed. We're in some VA hospitals as volunteers, but not others. We're vigorous in some places but not elsewhere. Particularly, I would say, in rural areas, where there may not be military installations, or Veterans Affairs facilities, we can provide a facilitating role helping people as family members are away, or as they reintegrate.
There are going to be a lot of issues. Think about Post Traumatic Stress Syndrome and the demands. I was talking to Rep. Jack Murtha about this in his office a few weeks ago…lots of continuing demands over coming years. I was just at the Pentagon yesterday talking about this. We are going to be working closely with them, and I think we're going to build this out.
It's very important. I also think that not only are we meeting a need, but I think that it will resonate well in the country and help revitalize our own image. Actually, if you talk to many Americans, they would already think that we're doing more than we are in this area.
The third area of focus, of course, is one that's the bread and butter, day-to-day activity of our work in chapters, like the one here in town, and that is helping people prepare for and respond to disasters, small and large. If you look at the bread and butter of the Red Cross – 70,000 house fires a year –that is a small tragedy, but a real one for people. And it's most often taking place for people who are of modest means or in real need. Because they're living in substandard housing, and the wiring is bad, and there's a fire, or they're running a space heater when they shouldn't be. These are people in need. We help them get back on their feet.
It's just very important work. We've got volunteers and staff going out in the middle of the night. A lot of these fires are taking place in the middle of the night. You're responding to them here just about daily in Cleveland. It's a very important responsibility.
We also step in in other instances. The shooting here last week. Mary Alice's chapter was there. I think it was eight or nine folks helping, doing some of the grief counseling and helping folks get through those immediate moments, also providing food and drink to first responders, the police or the fire folks, in a way that just makes it easier for them to do their jobs.
That's the localized, daily work. It ramps up to more significant instances like the floods. I was in the state a couple of months ago, when they had the flooding down in Findley, and there you get an instance where we bring in volunteers and staff members from dozens of states around the country. And it's interesting to see what's happened here. We've got a definite uptick in these, what I would call national incidents. They're not a Katrina incident, but they're national incidents requiring intervention from more than one chapter.
Al Gore got the Peace Prize, and definitely something is happening with the weather. Because there is a lot more flooding and a lot more wildfires that require that intervention, that more significant intervention, that have been taking place.
And I was out there, and that work is tough, tough work. I was in a trailer, with a woman, handsome woman 64 years old. She's got a husband who's got cancer. He's very sick. They've been through some floods before. The water never got up to the trailer, which is two feet off the ground.
It was chest high this time. They lost everything and it's just a tough, tough deal for her. Our folks are out there helping her get through the first few days, financial assistance and pointing her in the right direction, too. But it's difficult work.
If you ramp it all the way up to the next level, the truly national catastrophic events, that of course is an important responsibility. I break these incidents into three different categories. The first is a Katrina or a 9/11, and I put those two together, because massive as they are, and significant in terms of their demands on response and recovery, they do not typically constitute a continuing threat or set of issues, in terms of danger, continuing danger to the populace.
The second category I look at is something where you have a nuclear or biological, chemical attack that's very targeted. We simulated just a few weeks ago with FEMA what would happen if there was a nuclear attack in Indiana. Just this week, the government has been running an exercise called TOPOFF, the fourth iteration of this, which looked at what would happen if there were a radiological dispersal bomb or weapon, and the scenario had detonations in Guam, Portland and Phoenix. And there you have a continuing health issue.
The third area, all the way over to the other end is this pandemic flu that I mentioned before, where you can have a silent, invisible killer. And think about this: If you really had that happening, you would have people tending to shelter in place, not going out to be doing their day-to-day activities to some degree. At the same time, you'd want to maintain those collections of the blood. You'd need blood in that situation. That would be a real challenge.
When I look at where we are as a country, we are best prepared for that first category of events, less prepared for the second and least prepared for the third. And we've all been working hard to address these challenges. I think we've made progress as a government, as a Red Cross, as communities across the country. But we clearly need to do more.
The fourth area of priority is our responsibilities under the International Movement. We do step in to support in times of great need like the tsunami or like the Peruvian earthquakes this summer. We support the ICRC, which operates in the conflict zones and does important work in terms of the Geneva Convention. I think we can and should do more here.
I'm particularly interested in doing more with Red Crescent Societies, which operate around the world. I think in this time of extremism, that we as Americans, as the American Red Cross, can very much support those areas, and that it will help mitigate to some degree this conflict that is existing between the West and some of the fundamentalists, and in a way that is consistent with our humanitarian values.
How are we going to be successful? A couple of comments here. We're trying to change the American Red Cross to make it more inclusive. We haven't always played nice with others. We need to do that. We're a proud, enduring institution, but we need to be more open.
I'll give you an example. We sat down with the leadership of the United Way just recently. Brian Gallagher and I each brought eight people and met down in Dallas and had a very open conversation about working more constructively together. That's a conversation that—Brian's been in his job for over six years—that conversation had never taken place. We're trying to reach out, same thing with the Salvation Army. They had us over to their shop in Virginia not too long ago. We want to work well with others in the sector.
The other thing we very much need to do is make sure that we become more diverse, that we build out partnerships in the communities. It's not a choice—it's imperative as America changes in the 21st Century. We're doing it here with Hispanic Fire Fighters, Young Latinos, Asian Services in Action, organizations like United Black Fund Youth Employment Program, just to name a few. We have to do that as an American Red Cross.
We're also working closely with business. We just signed a partnership with The (Business) Roundtable where they help train their own 10 million employees about becoming volunteers. They give their people training on something called being "Red Cross Ready." That's to have a kit, have a plan—what you do when there's a catastrophic event—and find a way to stay informed. The blunt reality is that families are not ready. Fewer than ten percent of all Americans, according to our surveys, are Red Cross Ready: ready to withstand an event for a period of days without external intervention.
We are an enduring American institution. We are working to revitalize the American Red Cross, and I think we can all be proud of the organization, and simply stated: when you help the American Red Cross, you are helping America.
The stakes here are important. They go beyond, I would suggest, just the people in need that we help on a daily basis. Because of our prominence, how we do has an impact on how Americans feel about the charitable sector, and even beyond that, how they feel and what is their trust level in American public institutions. So we need to be successful.
The last thing I'll say-I often concluded my speeches when I was the IRS Commissioner with three simple words. And those were: pay your taxes. Now I've just got four words: Give Money, Give Blood.
The American Red Cross helps people prevent, prepare for and respond to emergencies. Last year, almost a million volunteers and 35,000 employees helped victims of almost 75,000 disasters; taught lifesaving skills to millions; and helped U.S. service members separated from their families stay connected. Almost 4 million people gave blood through the Red Cross, the largest supplier of blood and blood products in the United States. The American Red Cross is part of the International Red Cross and Red Crescent Movement. An average of 91 cents of every dollar the Red Cross spends is invested in humanitarian services and programs. The Red Cross is not a government agency; it relies on donations of time, money, and blood to do its work.