A.G. Schneiderman Releases Report Raising Questions About How Charities Are Spending Almost Half A Billion Dollars In Sandy-Related Donations

Attorney General's Charities Bureau Reviewing How $575 Million Reported Raised After Sandy Has Been Spent

A.G. Schneiderman: My Office Will Ensure That Sandy Donations Go To Help Victims As Donors Intended

 

 

NEW YORK – Attorney General Eric T. Schneiderman today released his office’s preliminary report into how charitable organizations have spent more than half a billion dollars raised in the weeks and months after Superstorm Sandy. Based on data provided by 89 charitable organizations that raised funds after the storm, 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. The report, Charitable Response to Hurricane Sandy, also raises questions about whether some of the funds reportedly spent on Sandy relief were actually spent on organizational overhead or other non-Sandy related purposes.

During a press conference in the heart of the Breezy Point neighborhood devastated by fires started by Superstorm Sandy, Attorney General Schneiderman outlined the findings in the report and announced that his office’s Charities Bureau would be sending letters to at least 50 organizations demanding greater accounting of Sandy-related contributions. The report is based on responses to questionnaires sent by the Attorney General's Charities Bureau to 89 charities that raised funds in New York for Hurricane Sandy relief.

"Last year, after Superstorm Sandy devastated families and communities throughout our region, people throughout New York, across the country and round the world opened their hearts and made more than half a billion dollars in charitable contributions to help those in need,” said Attorney General Schneiderman. “New Yorkers are resilient and generous people. As we have done so many times in the past, we got right to work rebuilding. We have a responsibility to the people who donated their hard-earned money to help our community rebuild to make sure that the contributions they made were used as advertised.”

On October 29, Superstorm Sandy made landfall in the Northeast. Roughly two weeks later, the region was hit by a powerful Nor’Easter that left thousands out in the cold again. As a result, people around the world contributed funds to help the relief effort. Following the storms, Attorney General Schneiderman’s Charities Bureau – which regulates all charities that operate or raise funds in the State of New York – started to review Sandy-related contributions to ensure that funds are distributed as advertised to donors.

The interim report released today compiles data provided to the Office of the Attorney General earlier this year. Key highlights from the report include:

  • Charities reported raising over $575 million in funds for Sandy relief, and spending over $336 million, or 58% of that amount for Sandy relief.
  • Charities reported that $238 million, or 42% of the total raised, was unspent.
  • Five organizations account for almost 80% of the total funds raised.
  • The American Red Cross was the largest fundraiser, reporting having raised over $299 million, over half of the funds raised for Hurricane Sandy relief by the responding organizations.
  • The American Red Cross reported that it established cut-off dates after which certain donations were no longer applied to Sandy relief. All donations made to its disaster relief fund online and by telephone from October 28, 2012 through November 26, 2012, and donations made by text through December 31, 2012, were applied to Sandy relief. After those dates, donations were not applied to Hurricane Sandy relief unless the donations were "restricted" to Hurricane Sandy or the donations were made in response to Sandy-specific fundraising.
  • Seventeen organizations reported that they may use funds raised following the storm for non-Sandy purposes, including for future disasters.
  • Of the $336 million spent by the responding organizations, almost half was granted to other organizations.

In response to concerns identified in this report, the Attorney General's Charities Bureau is heightening its review of Sandy fundraising and relief activities to obtain more detailed answers from the responding charities, including a clearer accounting of what money has been spent on, and plans to use remaining funds. 

In light of the substantial needs that exist and the public's expectations that donations will be used to help storm victims, the Charities 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.

“My constituents are not assisted by monies collected for victims of Sandy that are not distributed,” said State Senator Joseph P. Addabbo Jr. “Funds collected or donated are not necessarily helping anyone. These funds are useless unless given to those who truly are in need. I appreciate the efforts of the Attorney General and his office in addressing this issue and I look forward to working towards resolving this matter to benefit those on the road to recovery." 

"Almost 85 percent of my district, including my own home and office, were destroyed by Sandy, and it is unacceptable that nearly 9 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). “I commend Attorney General Schneiderman for investigating this matter. It is my sincere hope that these measures will help recovery for our communities in Southern Queens and Rockaway."

“This funding is urgently needed and we cannot accept that charitable donations are not being spent as intended,” said City Council Member Eric Ulrich (R – District 32). “Sitting on this money while so many people are still in need is an insult and I commend the Attorney General for issuing this report and applying pressure to these groups.”

“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 remain under lock and key,” said Arthur Lighthall of the Breezy Point Cooperative. “Communities across the globe opened their hearts and wallets to help New York City rebuild. Thanks to Attorney General Schneiderman, these funds will finally see the light of day and be put to good use.”

This initiative is being led on behalf of the Attorney General by Charities Bureau Chief Jason Lilien, with the assistance of Assistant Attorneys General Yael Fuchs and Karin Goldman and Policy Analyst Liam Arbetman, under the supervision of Executive Deputy Attorney General Alvin Bragg and First Deputy for Affirmative Litigation Janet Sabel.

The report, as well as responses of charities to the Hurricane Sandy relief questionnaires, is available here and on the Charities Bureau’s website.

Any complaints concerning charitable activities relating to Hurricane Sandy should be sent to the Charities Bureau’s dedicated Hurricane Sandy email address, at sandyresponse@ag.ny.gov.

Tips for donors supporting Hurricane Sandy relief, as well as financial reports of charities, are available on Attorney General Schneiderman’s website, at www.charitiesnys.com

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