- CORE Response projects a $20 million deficit by 2023 and will lay off 28 employees
- Major donors have scrutinized the ties following accusations of financial mismanagement
- Organization says it has been 'restructured to thrive in 2024 and beyond'
Sean Penn's disaster relief organization CORE Response is facing a major budget shortfall after some sponsors cut ties over allegations of mismanagement, a new report shows.
The charity expects a $20 million deficit by 2023 and will lay off 28 employees as a result, a report said. Bloomberg reports Friday, citing the nonprofit's internal documents.
It comes after AirBnB cut sponsorship ties with the group following a February report Bloomberg Business Week which aired allegations from employees that CORE had failed to protect them from alleged sexual harassment or address financial mismanagement.
The entity that eventually became CORE, founded in 2010 by Penn, initially focused on relief efforts in Haiti after the devastating earthquake there.
The nonprofit grew into a massive organization during the COVID-19 pandemic, when it handled much of Los Angeles' pandemic response efforts, including running one of the world's largest vaccination sites at Dodger Stadium .
Sean Penn's disaster response organization CORE Response is facing a major budget deficit after some sponsors cut ties over allegations of mismanagement
These efforts generated a flood of donations from corporate sponsors, but several major donors began reconsidering their donations after the Businessweek report raised concerns about sloppy financial procedures and questionable administrative overhead.
The report also shared allegations from former employees who said the organization failed to properly address their complaints of sexual misconduct in the workplace.
CORE denied these claims at the time, saying it had addressed “inefficiencies and errors” that arose from its rapid expansion during the pandemic.
Now, in response to the expected budget shortfall, CORE plans to lay off 14 headquarters staffers and 14 field staffers effective December 31, according to Bloomberg.
CORE told DailyMail.com in a statement: 'Since our inception, CORE has taken rapid action to respond to emergencies around the world.
“In response to the COVID-19 pandemic, CORE grew significantly, hiring and mobilizing hundreds of employees to vaccinate and test more than 6 million people.
“Since COVID, CORE has continued to fulfill its mission of community-based emergency response.
“In response to the growing global need for humanitarian assistance, CORE has been restructured to thrive in 2024 and beyond.
“We are in a strong financial position as evidenced by our recent audit, which is publicly available. We are incredibly proud of our work and our tireless team members who are making a difference in impacted communities around the world,” the statement said.
Community Organized Relief Effort (CORE) employees discuss before opening free COVID-19 rapid testing in 2021 led by the employee site at Los Angeles International Airport
A CORE distribution center at a humanitarian aid center for internally displaced persons in Odesa, Ukraine is expected in 2022
Penn originally founded the charity as J/P Haitian Relief Organization, but relaunched the organization in 2019 as CORE with NGO veteran Ann Lee (not pictured)
CORE is independently audited Financial Overview for 2022 showed $59.4 million in grant and contribution revenue.
Total revenues of $63.3 million fell short of total expenses of $73.1 million, resulting in a deficit of $9.3 million. However, at the end of last year the group still had net assets of $36.7 million.
Penn originally founded the charity as J/P Haitian Relief Organization, but relaunched the organization in 2019 as CORE with NGO veteran Ann Lee, who serves as CEO.
Post-pandemic, CORE has focused on relief efforts in Ukraine following the Russian invasion.
The group has also responded to floods in Pakistan and wildfires in Hawaii, and continues to provide services in Haiti and elsewhere around the world.