Actor Sean Penn’s disaster-relief nonprofit Core Response is laying off 28 staffers as it tightens its belt in anticipation of a US$20 million deficit for 2023.

Core told employees this month that fundraising was slower than expected this year, which contributed to the ongoing deficit, and that the layoffs are “necessary to fundamentally change this trend and ensure Core’s ongoing operations beyond 2024”, according to a copy of an internal presentation seen by Bloomberg. 

The non-profit cited, among other things, a February Businessweek investigation, which found concerns over its financial management and lack of response to alleged sexual harassment. Airbnb’s philanthropic arm subsequently severed ties with Core, while other major donors including Amazon.com also reviewed their relationship with the charity.

The layoffs take effect Dec 31 and include 14 staffers from Core’s headquarters and 14 field employees.

“In response to the increasing global need for humanitarian aid, Core has restructured to flourish in 2024 and beyond,” Core spokesperson Lydia You said in an email. “We are in a strong financial position, as exhibited by our recent audit.”

Core expanded its international work this year, including in Uganda, Turkey, Sudan, Pakistan, Brazil, India, Ukraine, Poland and Romania. The non-profit responds to a variety of disasters like war, floods and earthquakes.

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One of the people laid off is the senior director of international humanitarian response, according to a person familiar with the situation who asked not to be named.

Fueled by US$30 million from billionaire Jack Dorsey, Core grew rapidly during the pandemic, going from a tiny non-profit mainly focused on Haiti to a well-funded crisis-response organisation. You said in her statement that the non-profit tested and vaccinated more than six million people in response to the pandemic. 

“We’re incredibly proud of our work and our tireless team members who are making a difference in impacted communities around the world,” You said.

The Feb 1 Businessweek story, based on internal documents and interviews with 38 current and former employees, found Core struggled to adapt to its rapid growth. It left aid shipments from Amazon sitting unclaimed for days, frustrated partners with lax ground-level work and loose management of multimillion-dollar grants, and omitted certain information on its tax forms. Workers also said allegations of sexual battery and harassment by Core staff and partners went unaddressed, and that many who spoke out have faced retaliation. 

Core’s chief business officer Matt O’Connell told Businessweek earlier this year that the organisation adequately addressed all sexual misconduct claims and denied allegations that it mishandled donor funds. But he acknowledged that Core’s 2020 financial processes needed an overhaul after the non-profit grew rapidly during the pandemic. 

In reviewing its finances for that year, accounting firm Windes found that Core was missing financial documentation and basic oversight of its payroll and expenses. In 2021, after O’Connell said he reformed the charity’s accounting practices, an employee had to repeatedly tell it to stop paying him months after he left the organisation. Another former employee sent a letter to the California attorney general last year raising concerns about Core’s use of grants.

Core’s revenue for 2022 was US$62 million, down from US$122 million in 2021, according to its latest tax forms. The non-profit expects a US$5 million deficit in 2024. 

“It will be achieved and can be reduced further if we all take collective responsibility for managing our budgets,” the presentation said. BLOOMBERG