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Good intentions, mixed results

Charities struggle to handle September 11 donations

By Christy Oglesby

ATLANTA, Georgia (CNN) -- Within a day of hijacked planes leveling landmarks, collapsing a portion of the Pentagon and crashing in a grassy Pennsylvania field -- killing thousands -- the nation responded.


Since the September 11 attacks, people have flooded charities with about $1 billion. But the flow of cash into charitable coffers is only trickling out.

To date, less than a quarter of the donations, about $235 million, has been allocated to victims, according to a tally of charitable organizations' disbursements.

Now, the victims, their benefactors and even a prosecutor want to know what's damming the donations.

Some charities have decided to set aside a portion of funds for future tragedies or for projects related to the September attacks -- not specifically for victim assistance. In another case, a charity has received a tenth of the total contributions, but lacks a staff to distribute the money and does not have criteria to decide which victims to help.

Questions of money's use

Seven large funds account for the bulk of the donations, which have ranged from fat personal checks to pocket change dropped in firefighters' boots at traffic stops.

The organization receiving the lion's share is the American Red Cross, which created the Liberty Fund to handle September 11 donations. To date, donors have pledged $564 million to the fund, and the organization has collected $505 million of that amount, said Devorah Goldberg, a Red Cross spokeswoman. It has set aside $300 million to helping victims and has spent $153 million of that sum so far, she said.

How the money is being spent 
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What about the remaining $264 million?

The Red Cross said it intends to use it for victims of future terrorist attacks and to increase the nation's blood supply for military personnel.

New York Mayor Rudy Giuliani's Twin Towers Fund, created for the victims of the World Trade Center attack, has collected $85 million. To date, it has distributed nothing because the charity has lacked a criteria or staff to determine how to distribute the cash, Giuliani said.

Giuliani has promised to distribute half the sum within the next eight days. As for the balance of it, "we've got to figure out how to give it out right," the mayor said.

Other obstacles

More than inadequate staffing has slowed charitable work, as some agencies have had to deal with red tape.

Some charities give direct assistance to victims, but others have different procedures that slow the flow of cash to recipients.

Some provide grants to agencies that disburse money directly to the needy, meaning those charities have to evaluate grant requests and verify an organization's legitimacy. And some of those disbursement groups that get grants have their own rules governing victim assistance, further slowing the delivery of funds.

For example, the United Way, which reviews grant proposals, has enlisted the aid of volunteers from other philanthropic organizations to expedite proposals' review and approval.

"We have immediate and long-term grant requests coming in at rate of about 100 a week," said Jeannine Moss, a United Way spokeswoman. With the additional volunteers, the agency has cut the evaluation and approval time from a month to a week, she said.

The Robin Hood Foundation and the New York Times Company Foundation are charities that also provide aid to agencies.

The Red Cross, Twin Towers Fund Salvation Army and the International Association of Firefighters union provide direct assistance to victims and relief workers.

The IAFF funds are exclusively for the 344 families of New York firefighters and emergency workers who died at the World Trade Center site. It has distributed two installments of $10,000 each to every family covered by the fund, and a third disbursement is imminent, said union spokesman George Burke.

"We need to make these families as whole as we can as soon as we can," he said.

Burke said he expects the union's fund to swell to $70 million, and vowed that all the money would go to families. The union has no administrative costs associated with collecting and distributing the money, he said.

"Our members raised $50 million of that with fill-the-boot collections, and our union members go to these families to deliver the checks," Burke said.

Missing guidelines

New York Attorney General Eliot Spitzer recently questioned the practice of withholding funds for future attacks. Donors gave with the assumption they would be helping people affected by the September 11 attacks, he said at a congressional hearing on charitable contributions.

"I see the Red Cross, which has raised hundreds of millions of dollars that was intended by the donating public to be used for the victims of September 11," he said. "I see those funds being sequestered into the long-term plans for an organization."

Spitzer's complaint underscores a murky area in charitable giving, specialists note. Donor intent is not always so clearly defined, they say.

Can victims get assistance from multiple funds? If not, which ones might affect their efforts to get help from other agencies? How can charities make sure that some victims don't get an abundance of aid while others go lacking?

The IAFF's donations do not preclude its families from getting help anywhere else, Burke said. His union is cooperating with the Spitzer's office, which is trying to coordinate assistance, he said.

At the federal level, rules governing charitable assistance don't exist yet. The government's recent $5 billion airline bailout included millions for victims of the airline crashes that would allow them to receive money if they waived lawsuits against the airlines. No other federal guidelines offer direction for charities.

"We've filed a notice of inquiry and an advanced notice of rule making with the federal register," said Casey Stavropoulos, a spokeswoman for the Department of Justice, which will oversee the airline victims' compensation fund. "It will be administered through a special master and he has yet to be appointed."

How would federal aid affect other charitable efforts? Stavropoulos declined to speculate "because the fund has yet to be created."


• American Red Cross
• United Way of America
• The Salvation Army
• International Association of Firefighters
• Twin Towers Fund

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