The American Red Cross has long been recognized as the global symbol of humanitarian service—and it’s an expensive business.
In 2022, the American Red Cross generated more than $3.2 billion in operating revenue and spent just over $3 billion in expenses in the same year, according to its financial statements.
Contributions make up only about a third of the organization’s income.
“It really is a charity of choice,” according to Jake Johnston, senior research fellow at the Center for Economic and Policy Research. “When the White House starts raising money, when big corporations, the NFL, Hollywood A-listers raise money in the aftermath of a disaster, it’s probably aimed at the American Red Cross.”
But most of its revenue, just over $1.8 billion, comes from what its financial statements refer to as “Biomedical Services.”
“The American Red Cross essentially collects blood from donors and then as part of how they raise revenue to recover costs, they then sell the blood to about 2,500 hospitals and medical facilities across the country,” said Laurie Styron. , CEO and executive director of CharityWatch. .
When CNBC asked about pricing for these products, the American Red Cross responded that “prices for a unit of red blood cells are proprietary information. Pricing is determined by purchase volumes by blood group, service levels and delivery requirements, as well as other agreed upon terms with a hospital”.
The American Red Cross further clarified that it “does not charge for the blood itself,” but “reimburses hospitals and transfusion centers for costs associated with providing blood products.”
The majority of the American Red Cross’ operating expenses, just over $2 billion, are also spent on blood drives, according to its financial statements. That’s about $139 million more than the revenue it collects from the sale of blood.
Michael Thatcher, CEO of Charity Navigator said, “blood donation is actually a medical intervention that requires certain levels of certification from the people doing this work, storing that blood, making sure it stays clean and getting it to all these places. All this costs money.”
Watch it video above to see how the American Red Cross makes and spends its billions.