The American Red Cross received over $300 million in Hurricane Sandy donations — but what has been done with that money is unclear.
Last April, a year and a half after the storm, the charity said it still had a third of the donations raised for Sandy, which prompted criticism from disaster relief experts for not spending the funds more urgently, according to Reuters.
As to how the rest of the money has been used, the Red Cross has been reluctant to give details. New York Attorney General Eric Schneiderman's office has been investigating, and independent non-profit media group ProPublica has filed a public records request to the charity. In response, Red Cross lawyers have said that journalists could only receive redacted versions of records because the report included "trade secrets" that would compromise the organization.
"The American Red Cross would suffer competitive harm because its competitors would be able to mimic the American Red Cross's business model for an increased competitive advantage," said a letter to the attorney general's office, written by Gabrielle Levin of the Gibson Dunn law firm.
Watchdog group the Disaster Accountability Project has been critical of the Red Cross's use of Sandy funds for over a year; last summer they investigated reported mismanagement of the post-Sandy Move-In Assistance Program, which allegedly reversed eligibility for over 1,000 Sandy-impacted households that had been promised up to $10,000 for rental assistance and home repairs for things like new roofs, appliances and furnishings.
Ben Smilowitz, DAP's executive director, found the "trade secrets" claim to be be odd. "Invoking a 'trade secret' exemption is not something you would expect from an organization that purports to be 'transparent and accountable,'" Smilowitz told Reuters.
Doug White, who directs the fundraising program at Columbia University, told ProPublica that nonprofits can have trade interests, such as the logo of a university. He said it was unclear was that would be in the case of a charity, and that it might constitute a "delaying tactic."
According to the American Red Cross website, 91 cents out of every dollar goes to fulfill their humanitarian mission. About 32 percent of the 300 million in Sandy funds has gone to individual casework assistance, 31 percent toward food and shelter and 17 percent toward housing and community assistance.1 comment on this story
Their emergency response coordinated 17,000 trained relief workers — mostly volunteers — from around the country, and large-scale relief, like providing 7 million relief items, 17 million meals and snacks, and 74,000 shelter stays.
Controversy over how and when disaster-relief groups has come under fire for years. For example, one CBS report examined five major charity groups that responded to the Haiti earthquake, and claimed that four months after the disaster, over one million Haitians remained homeless even though enough aid had been raised to "give each displaced family a check for $37,000."
"At the same time we move quickly, we move also prudently with spending the funds so that we ensure that the investment is made prudently," Gary Philoctete, assistant country director for CARE charities told CBS.