State AG examines charity spending post-Sandy

Photo by Christina Santucci
By Karen Frantz

New York state’s attorney general is gathering information from nonprofits helping with hurricane relief efforts in order to disclose to the public how their donations are being spent.

Attorney General Eric Schneiderman announced Nov. 27 that his office sent letters to 75 nonprofits engaged in relief efforts requesting information about their activities and expenditures in the name of transparency.

“In light of the importance of the recovery efforts and the enormous amount of money raised in such a short period of time, it is critical that donors know where their money is going and that funds are spent responsibly,” Schneiderman said in a statement.

According to the attorney general’s office, the letter was not spurred by any specific concern about misuse of donated funds, but rather was a proactive effort to institute a system of checks and balances for the nonprofit groups.

The office said that after such natural disasters as Hurricane Katrina and the earthquake in Haiti, a number of charities were formed to help with relief efforts and, although most acted honorably, some misused the funds donated to them.

The 75 charities that received letters from the attorney general were chosen because they were high profile and were soliciting money, the office said. Organizations that received the letters include the American Red Cross; Occupy Sandy; Breezy Point Hurricane Sandy Relief; Catholic Charities Diocese of Brooklyn and Queens; Graybeards, based in the Rockaways; and INCA Relief USA, based in Jamaica.

Schneiderman is gathering information from the groups, such as the amount they are raising and spending, whether the money is going solely to hurricane relief efforts, what they have done to help hurricane victims so far and what they intend to do with any surplus donations.

The attorney general’s Charities Bureau will compile the information and report it online, which will have the dual purpose of promoting transparency and helping nonprofits coordinate their services, Schneiderman’s office said.

If any misuse of funds is discovered, the first step is usually to start with a cease-and-desist letter and asking the nonprofit to disclose how it is spending its money, the office said.

It also said determining whether funds are being misused is often a gray area because some spending that does not directly go to hurricane relief, such as using donations to pay salaries, may be a good rationale for use of money.

The office said although responding to the letter is voluntary, it expects most nonprofits will do so.

Reach reporter Karen Frantz by e-mail at kfrantz@cnglocal.com or by phone at 718-260-4538.

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