10/23/13 The Wall Street Journal: Under Pressure, Red Cross commits another $6 Million to Relief Efforts
By Melanie Grayce West
The Wall Street Journal
Oct. 23, 2013 9:15 p.m. ET
Under pressure from the New York state attorney general, the American Red Cross agreed on Wednesday to commit another $6 million to relief efforts for superstorm Sandy victims, on top of the $308 million already allocated by the charity for Sandy relief, officials said.
The agreement between Attorney General Eric Schneiderman and the Red Cross is set to be announced on Thursday on Long Island. It specifies that the new funds go to urgent housing-related needs, said a spokesman for Mr. Schneiderman. Additionally, the charity has agreed to increase the transparency of its fundraising following disasters, including modifications to its website, said the spokesman.
The agreement comes days before the one-year anniversary of Sandy, which devastated the region and left more than 100 people dead.
An American Red Cross spokesman said the organization and the attorney general “collaboratively identified” additional funding needs. The organization is “committed to transparency in the giving and spending of charitable funds,” said the spokesman. The Red Cross has spent or committed about $280 million of the $308 million raised for Sandy victims.
In addition to the Red Cross, Mr. Schneiderman has come to agreements on payouts with three other charities. The Cleveland-based Brees Dream Foundation, founded by the New Orleans Saints quarterback Drew Brees, will pay out some $225,000 in Sandy donations by next October. The New York-based Kids in Distressed Situations, Inc., will spend nearly $300,000 in donations by early next year. The New York Annual Conference of the United Methodist Church will spend down $3.15 million over three years.
The review of the Red Cross and nearly 90 other charities that collected donations for Sandy victims began during the summer. Mr. Schneiderman’s office requested details on how the Red Cross restricted donations to benefit Sandy relief efforts. The review also included questions on grant making, expenditures and goods and services donated in-kind.
In July, the attorney general’s Charities Bureau released a report on how $575 million in Sandy donations was spent. That report concluded that some $238 million was remaining of the total raised by some 90 charities. The review is ongoing.
The Red Cross has come under criticism in recent months for its handling of a program to help Sandy victims make a transition from temporary to permanent, sustainable housing. The Move-In Assistance Program, with a maximum grant of $10,000, covered relocation expenses, rebuilding costs, furniture and temporary housing, among many other things.
That program was the subject of a complaint filed in July with the New York attorney general by the Disaster Accountability Project, a Rockville, Md., charity watchdog group led by Ben Smilowitz. Mr. Smilowitz said the Red Cross changed eligibility rules for the move-in program midcourse, leaving as many as 1,000 New Yorkers in the lurch. The charity has said that during a review of the program, some applicants to the program were incorrectly included. The organization then provided further training for Red Cross caseworkers.
An additional $6 million invested in the Move-In Assistance Program would “allow Red Cross to honor its past promises of eligibility and assistance,” said Mr. Smilowitz, adding that the move is “extremely encouraging if they actually follow through.”
Write to Melanie Grayce West at melanie.west@wsj.com