10/24/14 Associated Press: Under Pressure, American Red Cross to Make Changes

Article by: DAVID B. CARUSO , Associated Press

Updated: October 24, 2013 – 5:45 PM

NEW YORK — After enduring some criticism over its performance during Superstorm Sandy, the American Red Cross has agreed to make changes in the way it solicits donations after major disasters to avoid potential confusion over how that aid money is likely to be spent.

The relief organization announced an agreement with New York’s attorney general Thursday in which it agreed to modify the language it uses on its website in a way intended to give donors more information about whether their gifts will be used to assist victims of a particular catastrophe, or for Red Cross operations in general.

At the urging of New York Attorney General Eric Schneiderman, the Red Cross agreed to omit any reference to a specific disaster on its donation page, and instead offer people the option of clicking buttons to donate either to their local Red Cross chapter, or to people “affected by disasters big and small,” or to simply send their money “where it is needed most.”

People who want to earmark their gift for a specific crisis will be directed to a mail-in form and will have to send in a check. Those new guidelines won’t affect people who give over the phone or by text.

The Red Cross also agreed that when it is involved in fundraising drives after future big disasters, it will let the public know when the organization believes it has raised enough money for its response. That effort will include ceasing all references to the disaster in solicitations, and letting other groups know the Red Cross has all the money it needs.

That wasn’t the case after Sandy, when many well-intentioned groups ran print and television ads for months, saying the best way to help was to donate to the Red Cross. Those ads continued long after the Red Cross had stopped dedicating donations to its storm response.

Red Cross spokesman Roger Lowe said the changes would make the charity’s fundraising operations more transparent. As part of the agreement, the Red Cross also said it would pledge an additional $6 million to Sandy relief projects.

Speaking at a news conference in Long Beach, Schneiderman said his office has tried to ensure that all charities raising money in the name of Sandy victims deliver the promised aid promptly.

“We have been dogged about making sure that when they raise money and tell the world they are going to spend it on Sandy recovery, they in fact spend it on Sandy recovery,” Schneiderman said.

In the past, the Red Cross has drawn criticism from philanthropy experts and other aid groups for gobbling up huge sums of money following catastrophes, even when it had no capacity to spend those funds on the type of relief if traditionally provides, like putting displaced people in hotels or getting them hot meals.

In the months after Sandy, the Red Cross took in enough to dedicate $308 million to storm relief efforts. But it began scaling back its storm operations in the spring with much of that money still unspent. Since then, it has redirected a lot of it to programs run by other groups. Not counting the new $6 million in funding, it had about $28 million remaining this month.

In separate agreements, three other charities that raised money for hurricane relief efforts agreed to a timetable for spending funds still sitting in the bank on the storm’s anniversary. They are the New York Annual Conference of the United Methodist Church, Kids in Distressed Situations and the Brees Dream Foundation, which was established by New Orleans Saints quarterback Drew Brees.

As part of the agreement with Schneiderman’s office, the Red Cross is also committing an extra $4 million to a program that gives “move-in assistance” grants worth up to $10,000 to certain storm victims.

The Attorney General questioned the Red Cross’ handling of those grants after a watchdog group, the Disaster Accountability Project, complained that hundreds of people had been led to believe they were eligible, only to learn later that the money wasn’t coming through because of a more stringent application of eligibility rules.

Lowe said the Red Cross would reevaluate eligibility for some of those people who were turned down.