N.Y. AG Questions How Charities Used $575M Raised for Sandy Victims

New York Attorney General Eric Schneiderman released a report that shows hundreds of millions of dollars donated to charitable organizations after Hurricane Sandy have not yet been used to assist homeowners and other storm victims. Image: Bloomberg News

A preliminary report by the office of New York attorney general Eric Schneiderman shows hundreds of millions of dollars donated to charitable organizations after Hurricane Sandy have not yet been used to assist homeowners and other storm victims.

Data based on responses to questionnaires provided to Schneiderman’s office by 89 charitable organizations that raised funds after the storm show the math does not add up.

At least $238 million of the more than $575 million that was raised for Sandy relief had not been spent as of April of this year.

Hence, the Charitable Response to Hurricane Sandy report questions “whether some of the funds reportedly spent on Sandy relief were actually spent on organizational overhead or other non-Sandy-related purposes.”

Five organizations, led by the American Red Cross, account for almost 80% of the total funds, according to data provided to the AG’s office earlier this year.

Charities spend over $336 million, or 58% of the $575 million was used for Sandy relief. Roughly half of the $336 million used was granted to other organizations.

Seventeen organizations reported that they may use funds raised following the storm for non-Sandy purposes, including for future disasters.

The American Red Cross is one of the organizations planning to use funds raised following Sandy for future disasters. At $299 million the American Red Cross raised over half of the funds for Hurricane Sandy relief. The charity maintains it established cut-off dates after which certain donations would no longer apply to Sandy relief.

For example, all donations made to its disaster relief fund online and by telephone from Oct. 28, 2012 through Nov. 26, 2012, and donations made by text through Dec. 31, 2012, were applied to Sandy relief efforts. After those dates, unless the donations were "restricted" to Hurricane Sandy or were made in response to Sandy-specific fundraising, the charity said, donations were not applied to Sandy relief.

Currently up to $238 million of the total raised remains in these organization’s books unspent.

“In response to concerns identified in this report,” the AG's Charities Bureau said, it plans to intensify its review of Sandy fundraising and relief activities to obtain more detailed answers from the charities, “including a clearer accounting of what money has been spent on, and plans to use the remaining funds.”

The bureau “will ask organizations to consider redirecting funds they are not using for Hurricane Sandy relief to other organizations that are continuing to provide assistance.”

“We have a responsibility to the people who donated their hard-earned money to help our community rebuild” and ensure the contributions were used as advertised, Schneiderman said during a press conference in the Breezy Point neighborhood, which was severely damaged by fires started by Hurricane Sandy. His office will send letters to at least 50 organizations “demanding greater accounting of Sandy-related contributions.”

Lack of reconstruction investment is more visible in some areas such as Southern Queens, Rockaway and Breezy Point.

"Almost 85% of my district, including my own home and office, were destroyed by Sandy, and it is unacceptable that nearly nine months after the storm, funding raised for thousands of victims still hasn't been given to those in need,” said Assemblyman Philip Goldfeder, D-Rockaway Park.

While communities across the globe opened their hearts and wallets to help New York rebuild, said Arthur Lighthall of the Breezy Point Cooperative, “All one needs to do is look around Breezy Point to realize what a travesty it is that almost $240 million collected for Sandy relief remains under lock and key.”

Among others, City Council member Eric Ulrich, R-District 32, applauded the AG for issuing the report and applying pressure to these groups. “Sitting on this money while so many people are still in need is an insult,” he said.