Colo. flood donations for Red Cross went to national office

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DENVER -- Millions of dollars were collected by the local chapter of the American Red Cross days after disastrous floods hit Colorado last September.

The money was supposed to help victims of the floods, but we've learned some of the donations didn’t stay in Colorado.  Instead they went into national Red Cross bank accounts.

Internal documents from a high level source, provided to FOX31 Denver, show the local Red Cross collected a little more than $4 million in the last two weeks of September, but 25 percent, or a little more than $1 million of the donated money was never earmarked for Colorado flooding victims.  Instead it was put into the national disaster fund.

The internal documents provided an inside look into how the local Red Cross collected donations and separated the funding.

Companies who made the biggest contributions, more than $5,000, had a choice of donating to the floods or national disaster relief.  Many chose to give to the national fund at the urging of the local Red Cross.

Vail Resorts, Verizon and Delta Dental were just some of the companies on the list who donated to the national fund, despite news releases they sent out touting the money was going to Colorado flooding victims.

“It’s completely dishonest and it is misleading,” said Ben Smilowitz, of the Disaster Accountability Project, a non-profit watchdog organization for disaster relief. He said that if you donated to Colorado flooding victims, the Red Cross can only use those funds to help those who desperately need it the most in Colorado.

Smilowitz said the Red Cross is known for asking donors to send money to the national Red Cross office instead of keeping it local, for a specific disaster.

“A designation ties the hands of an organization and anyone can understand why designated funds are less appealing,” he said.

Delta Dental is one of the companies who gave $10,000 just days after the floods. Barbara Springs, the head of the Delta Dental Foundation, said that the Red Cross asked for the donation be put into the national disaster fund because it would be put to better use.

“While we desire the money stay in Colorado, we certainly have given them leverage to spend the money where they believe it is necessary and best to be spent,” Springer said.

Gino Greco, the local CEO of the Red Cross of Colorado and Wyoming, defended the practice of splitting funds.

“We explain the pros and cons of restricting a gift and that it restricts the purpose they perhaps want, but it doesn’t give us the flexibility to respond to something else,” explained Greco.

Greco said the million dollars that went in the national Red Cross disaster fund can be used by the local chapter, but only after it has run out of money it collected from donations for the flood.

“If an organization is trying to raise funds to cover a certain need, then backhands and tells donors not to donate to that need, then you begin to wonder what their motives are,” said Smilowitz.

He said of the $1 million in donations FOX31 Denver found went into a different fund is money could have been used to help more victims of the floods.

Smilowitz is an outspoken advocate for victims of disaster, last year he helped with the investigation into how the Red Cross spent donations for those affected by superstorm Sandy.

After his organization filed a complaint with the New York Attorney General, the Red Cross decided to release another $6 million for victims.

FOX31 Denver asked the local chapter of the Red Cross to give us a dollar-for-dollar breakdown on how it spent donated fund for Colorado flooding victims. The organization refused, but did give us a generic breakdown on how it spent little more than $7.5 million collected as of Jan. 23.

The breakdown shows $4 million was spent on emergency food, shelter and relief items; an additional $1.08 million went to help those with physical and mental health services and $1.9 million went toward planning and casework.

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