New York AG Cuts Deal With Sandy Charities To Release Funds

October 25, 2013       Mark Hrywna      

An agreement between four charities and New York State Attorney General’s Office will provide another nearly $10 million to address “unmet needs,” nearly a year to the day after the storm hit New York City. New York Attorney General Eric Schneiderman announced the agreement, which also includes a change in the way the American Red Cross (ARC) will solicit donations for future disasters.

Of the $308 million raised by the ARC for Sandy efforts, some $280 million has been spent or allocated, including $60 million in grants to partner organizations.

The ARC will provide $6 million in new funding to address housing-related needs resulting from Sandy, on top of the $308 million. Agreements with three other charities were secured:

  • Brees Dream Foundation, established by New Orleans Saints quarterback Drew Brees and his wife, will disburse $225,000 in unspent Sandy-related donations by Oct. 1, 2014;
  • Kids In Distressed Situations (KIDS), Inc. will disburse more than $288,000 in unspent donations by early next year; and,
  • New York Annual Conference on the United Methodist Church (NYAC) will disburse $3.15 million, with $1 million by Aug. 31, 2014, and $1 million per year in each of the next two years.

The attorney general’s Charities Bureau reviewed Sandy-related contributions to make sure funds were distributed as advertised to donors, with some $575 million raised in all for Sandy relief. The bureau sought information from almost 90 charities engaged in fundraising and the agreements reached with the four charities were part of that effort.

Approximately $1 million will be put toward people still in hotels whose city funding ran out, and $3 million dedicated to rental assistance for people not eligible for funding from the Federal Emergency Management Agency (FEMA), according to Suzy DeFrancis, chief public affairs officer at the ARC. Another $2 million will be set aside to address needs as they come up, she added. “We came up with that figure based on needs we’re aware of and some that would probably occur later on,” she said.

In addition to the new funding, the agreement outlines how the American Red Cross will solicit donations following future disasters. “Transparency and awareness for online donors would be assisted” by omitting any reference to a specific disaster in the online disaster relief solicitation language of the organization’s donation landing page, according to the seven-page agreement.

Online donors who want to make a restricted donation to a specific disaster would be directed to a mail-in form, allowing them to designate the cause by check, with the option of having the check returned. In the wake of a disaster, the ARC also will assess whether it has raised more than its anticipated expenses for the disaster and discontinue disaster-specific fundraising language if necessary.

The primary fundraising vehicle during a disaster for the ARC is its disaster relief account but most specific designations are received by check, DeFrancis said. Most donors give to the disaster relief account and understand that it’s for current and other disasters while some want to designate their gift for a particular cause, she said. In the case of Sandy, Red Cross is not actively fundraising but continues to accept donations designated for storm relief because the needs have been so great.

There was a point after the Asian tsunami in 2005 when the ARC had raised sufficient funds in donations and pledges, DeFrancis said, but the agreement with the AG formalizes that a little more in terms of future disasters.

Giving by text would be general disaster relief although it’s typically allocated to a major disaster as in Sandy, according to DeFrancis. “We believe the (mail-in) form will make it easier for donors to designate and easer for us to track designated funds,” she said.

“We are very pleased that Red Cross is finally dedicating $4 million to help Sandy survivors promised or told they were eligible for recovery help,” said Ben Smilowitz, executive director of the Disaster Accountability Project (DAP), which last summer filed a complaint with the attorney general, claiming the ARC changed eligibility requirements for its housing assistance. “I worry this matter is not fully resolved because we know from case managers themselves that many files in question may not reflect verbal assurances clients received and the very people this program was intended to serve are still receiving denials for critical help they relied on to rebuild, one year later,” he said.

Smilowitz is concerned that there will be less transparency as result of the changes to online solicitations. “Incoming online donations won’t be earmarked for particular disasters. If someone wants to earmark their donation for a disaster, they have to send a check,” he said. There will be even less accountability, he said, because there will be no more conversations about raising and committing specific dollars for a disaster.

The impact of the new system is unknown because it is new but DeFrancis said a lot of people who go online still prefer and do send in a check.

While he praised the AG’s office and the ARC, Smilowitz said it’s a conversation that communities around the country need to be a part of. “It’s amazing that the AG is interested in a dialogue on disaster relief donations and improving transparency but I don’t think this is resolved in any way,” he said. Donors to other disasters around the nation want to know where their donations are going, he said, and charity officials in other states must be involved, along with FEMA and Congress.