The American Red Cross has long been recognized as the universal symbol of humanitarian services —and it’s an expensive operation.
In 2022, the American Red Cross generated greater than $3.2 billion in operating revenue and spent just over $3 billion in expenses the same 12 months, in response to its financial statements.
Contributions only make up a couple of third of the organization’s revenue.
“It’s really form of the charity of alternative,” in response to Jake Johnston, a senior research associate at the Center for Economic and Policy Research. “When the White House starts raising money, when the big corporations, the NFL, Hollywood A-listers are raising money for the aftermath of a disaster, it’s probably targeted toward the American Red Cross.”
But the majority of its revenue, just over $1.8 billion, comes from what its financial statements check with as “Biomedical services.”
“The American Red Cross essentially collects blood from donors after which as a part of the way it raises revenue to get well costs, then sells that blood to about 2,500 hospitals and medical facilities across the country,” said Laurie Styron, CEO and executive director of CharityWatch.
When CNBC inquired about the pricing of those products, the American Red Cross responded that “prices for a unit of red blood cells is proprietary information. The pricing is decided by purchase volumes by blood type, service levels, and delivery requirements in addition to other agreed upon terms with a hospital.”
The American Red Cross further clarified that it “doesn’t charge for the blood itself” but is “reimbursed by hospitals and transfusion centers for the costs related to providing blood products.”
A majority of the American Red Cross’ operating expenses, just over $2 billion, can be spent on collecting blood, in response to its financial statements. That is about $139 million greater than the revenue it collects from selling the blood.
Michael Thatcher, CEO of Charity Navigator said, “drawing blood is definitely a medical intervention that requires certain levels of certification by the people doing that work, the preservation of that blood, ensuring that it stays clean and getting them to all these places. All of that costs money.”
Watch the video above to see how the American Red Cross makes and spends its billions.