Nonprofits caught withholding funds donated after superstorm Sandy

Wednesday, July 24, 2013 by: J. D. Heyes
Tags: nonprofit organizations, superstorm Sandy, donations

(NaturalNews) Scores of Americans were saddened by the loss of life and massive damage caused by Superstorm Sandy and as such were motivated to give money to non-profit charities providing relief to victims of the disaster.

Only much of that money - tens of millions of dollars, in fact - has never made it to those it was intended to help. And now New York state's attorney general is trying to figure out why.

"This is about transparency. This is about accountability," Attorney General Eric Schneiderman said. "This is about us all understanding that the money goes where the donors intended and the relief is delivered effectively and efficiently."

Just days after Sandy made landfall along the east coast in October 2012, several charitable organizations began soliciting and collecting donations from millions of Americans to be used specifically to provide relief to those affected by the storm. But Schneiderman says a sizeable portion of those funds remain in the hands of the charities. In fact, his office has found 89 charities that raised more than a half-billion dollars after Sandy.

'People are trying to rebuild these homes'

But by April, only about 57 percent of those funds had been dispersed as part of Sandy relief; leaving about $238 million with the nonprofits - and not in the hands of Sandy victims, MyFoxNY reported.

One resident and Sandy survivor, Art Lighthall, lives in Breezy Point, Queens, a place where the storm destroyed more than 350 homes.

"People are trying to rebuild these homes," he said. "They need the assistance cause in many cases they did not get the support through FEMA and in many cases they had no insurance or their insurance proceeds were small or they are fighting with insurance companies."

The American Red Cross raised the most funds for Sandy victims - some $303 million - and, the organization says, every dime of it has been dispersed for that very purpose. But in May, reports surfaced that much of the organization's Sandy funds remained unspent.

At the time, The Associated Press reported that as many as one-third of the group's Sandy funds remained in Red Cross coffers. Officials with the organization said that was to allow it to address needs that were not readily apparent in the immediate aftermath of the story.

Some experts have called that smart planning, but others say the strategy likely withheld aid from some of the neediest storm victims.

"The Red Cross has never been a recovery operation. Their responsibility has always been mass care," Ben Smilowitz, executive director of the Disaster Accountability Project, a nonprofit group which tracks aid organizations told the AP. "Stick with what you're good at."

"People were cold. Homes mildewed. There wasn't enough decent housing," added Kathleen McCarthy, director of the Center for the Study of Philanthropy and Civil Society at the City University of New York. "Given the lingering despair, it's hard to understand the argument that 'We are setting that money aside.'"

'Do the right thing'

Josh Lockwood, CEO of the Red Cross Greater New York Region, defended his organization, however. "We are waiting to see where the greatest need is going to be over time," he said. "We are more concerned with spending our resources wisely rather than quickly."

Schneiderman says at least 17 other organizations have said they might use Sandy donations for other, non-Sandy purposes - including for future disasters.

State Sen. Joseph Addabbo, Jr., says that's going to be a problem.

"We ask those who have retained the money collected to do the right thing: get the money out to the intended beneficiaries which are the victims of Hurricane Sandy," he said.

A reminder from the attorney general is to make sure that you do specify where you want your donation to go. His office said its investigation is far from over.

Sources:

http://www.myfoxny.com

http://www.huffingtonpost.com

http://www.cbsnews.com