United Way of Southwest Louisiana has cut funding for the American Red Cross in half after the agency failed to register as a nonprofit with the state.

The Red Cross was in line to receive about $122,000 this fiscal year, but it will only get $45,700 based on the designations they received during the 2013 campaign.

Denise Durel, president and CEO of United Way of Southwest Louisiana, said the decision came from more than 100 volunteers, including United Way’s Community Investment Committee and board of directors.

“During our research, we found that the American Red Cross is currently registered in a few other states, including Indiana, New Hampshire and Ohio,” Durel said. “We still don’t have an understanding why there is such an unwillingness to do something this easy that could have resulted in an additional $66,000-plus in funding for them.”

Bobbi Zaunbrecher, executive director of the American Red Cross South Louisiana Region, said there is a difference of opinion for what was an elective act and what was not.

The American Red Cross is a 501(c)(3), like all other participants in United Way. However, they are a “federal instrumentality,” which means they are chartered by the federal government.

“Our corporate document is the United States civil code under which we are incorporated,” Zaunbrecher said. “It’s a totally unique situation. Part of that charter says that we are authorized to do what we do in every jurisdiction in the United States of America.”

Zaunbrecher said the Red Cross is “not subject to regulation by state or local government.” All of their regulations come from the federal government.

“Our corporate attorney in Washington talked to the corporate attorney for the (Louisiana) Secretary of State, and they agreed that it was not appropriate for a federal instrumentality to register with the Secretary of State’s office,” Zaunbrecher said. “We are exempt from filing because of the nature of our corporate structure. We submitted that to the United Way, and it was not acceptable.”

The American Red Cross has received funding from nine other United Ways in Louisiana for the current fiscal year. Zaunbrecher said services provided to Southwest Louisiana will not be affected. She said they will have to raise money in ways they haven’t done before and meet with new donors.

“The United Way of SWLA may elect to abandon the American Red Cross, but the American Red Cross will never abandon Southwest Louisiana,” Zaunbrecher said. “We will be able to demonstrate the work that we are doing in the community every single day and our level of readiness to respond to a larger disaster. Although it’s unfortunate the United Way has taken this position, it’s absolutely their right to take it.”

In the 2014 fiscal year, the American Red Cross directly funded more than $105,000 in financial assistance in the five-parish region — not including overhead costs.

Durel said that Michelle McInnis, United Way’s head of community investment, received funding applications last year and found out through the Secretary of State’s website that the Red Cross and another agency incorporated out of state were not registered. Two others were registered but not in good standing. Durel said McInnis contacted the four agencies and informed them that United Way needed them to register and/or be in good standing.

“The other three immediately took the necessary steps,” she said. “The American Red Cross answered by telling us that they aren’t legally required to do so and didn’t have any plans to. Correspondence went on between us for almost two months.”

Durel said the United Way met with Red Cross officials in March in an attempt to overcome the obstacle, and “offered to cover the cost of the filing fee.” By May, Durel said the Red Cross “clearly indicated that they would not be registering.”

Regarding their funding decision, Durel said the Secretary of State has rules pertaining to who must register with the state, along with ways for those to register even though they are not required to do so.

“As a non-profit, United Way of SWLA is not required; however, we have been registered with the state of Louisiana since 1953,” she said.

The state issued a revised certificate to United Way SWLA in 1987, which the organization still uses today.

“Our membership certification for United Way Worldwide requires that we be registered within the state that we operate and remain in good standing,” she said. “After the initial application year, being registered means simply paying an annual minimal fee and submitting a copy of our most recent annual report.”

In 1973, United Way Worldwide initiated the Standards of Excellence that United Way Southwest Louisiana uses as their guiding principles. Part of those principles includes a high level of transparency, she said.

“We believe that registering with the state and remaining in good standing is part of that transparency,” Durel said.(MGNonline)