9-11 funds aren't spent

$2.3-billion has been collected by charities since the terrorist attacks, but a survey finds almost half has not yet been disbursed.

©Washington Post
June 12, 2002

WASHINGTON -- Of the $2.3-billion raised by the largest charities in the nine months since the terrorist attacks, 40 cents of each dollar has yet to be distributed.

A survey by the Washington Post of the major charities, which raised virtually all of the funds that flowed in after Sept. 11, found that 29 cents of each dollar has gone to the survivors of those killed and an additional 20 cents has gone to displaced workers and others affected by the attacks. Several charities reported that money continues to come in -- in one case an average of $21,500 a day -- even though the organizations have long since ended their appeals for donations.

The survey of charities, detailing how much each has collected and how it has been spent, provides one of the few comprehensive reviews of the largest outpouring of charitable giving in the nation's history.

The $2.3-billion tallied by the Post from the largest charities indicates that total donations continue to climb above previous estimates. And the accounts by fundraisers, their watchdogs and their beneficiaries underscore the enormousness of the undertaking: Collecting and distributing billions of dollars in a matter of months presented serious logistical problems, from inadequate computer systems to questions about whether mistresses should receive survivor benefits. It also exposed the sometimes huge gap between the decisions by charities and the expectations of donors and victims.

In surveying the 11 charities that together collected roughly 95 percent of the total, the Post also found:

Families of firefighters who died have received, on average, about $1-million each -- 10 times the figure that has typically gone to families of others killed in the attacks. Other money set aside for firefighters' families could bring their totals above $2-million by the end of the year.

Of the $1.4-billion spent so far, more than a third has been cash aid to the estimated 55,000 victims who lost their jobs or their homes or were otherwise hurt by the events last fall. On average they received about $8,000, far less than the typical amount that went to families of those killed.

The largest charity, the American Red Cross, has in its Liberty Fund about $400-million still to distribute, but officials at the organization have pledged to spend most of that by Sept. 11. In contrast, the September 11th Fund, the second-largest fund, plans to distribute its remaining $180-million over many years to meet the long-term needs of victims and their families.

A full accounting of how hundreds of millions in donations were spent may not be possible because the funds often are distributed through smaller nonprofits. While many individual charities report their activity, no single agency or repository compiles the accumulated donations so the public can see a total picture of collections and expenditures.

Philanthropy experts argue that a careful accounting of the funds is critical because public opinion on whether the money was well spent could affect charitable giving long into the future.

The interested constituency for this information is huge: Nearly two-thirds of American households donated money for the victims and their families, according to an Indiana University survey.

The televised horror of Sept. 11 triggered "the most primitive chord in Americans' feelings about their country and who they are," said Eileen Heisman, president of the National Philanthropic Trust, which advises donors. "They wanted to respond to this disaster . . . and the only thing they could do quickly was give money."

"We are so grateful," said Carie Lemack, president of the Families of September 11, a victims advocacy group. Lemack's mother was killed in the World Trade Center collapse. "The families never expected to get all this charity. It's not like we woke up on Sept. 12 and said, 'Where's all the money?' "

At the same time, many families say they wish they had a clearer picture of where the donated money had been spent and the remaining money will go.

"I just think people are frustrated because they don't know where it's gone," said Elizabeth McLaughlin, whose husband also died in the World Trade Center.

In the weeks after the terrorist attacks, a massive collective endeavor sprang up, from the smallest communities to the country's largest corporations. The funds streamed in to numerous small nonprofits, but the bulk of the donations ended up on the books of long-established organizations.

More than half the money -- $1.4-billion -- went to the two largest funds, the American Red Cross' Liberty Fund and the September 11th Fund, which was created by a United Way chapter in New York and New York Community Trust. Nearly 40 percent was spread among nine other charities.

In addition to the $2.3-billion collected by the largest 11 charities, $100-million has come in to other nonprofits, according to the Chronicle of Philanthropy.

In its survey, the Post identified 11 charities that had collected at least $50-million and asked for a breakdown of what had been collected, from what sources, how much of it had been spent, and on what causes.

Most charities reported that their administrative costs would be covered not by donations intended for victims but by income raised separately.

When it came to distributing the money, the intent of the donor was often unambiguous: Four of the largest charities received funds dedicated solely to the families of firefighters or other rescue workers. Families of the dead and seriously injured also are eligible to receive awards from a separate federal fund administered by the Justice Department.

The two largest funds alone have spent $441-million on the tens of thousands of collateral victims -- people who, at least temporarily, lost jobs or homes because of the attacks. They include vendors at Reagan National Airport who lost customers while the airport was closed, unemployed shoeshine workers at the World Trade Center and residents of Lower Manhattan who needed clothes and furniture cleaned.

In many cases, the large charities handed off their collections to other nonprofits. The New York Times 9/11 Neediest Fund, for example, gave $25,000 to the Jewish Museum for a program on tolerance for Islam in two high schools near the World Trade Center. The September 11th Fund has pledged nearly $500,000 for studies on the health effects of the attacks on pregnant women, and $37,150 to help blind residents learn how to navigate the new landscape near Ground Zero.

Some decisions by charities, however -- to hold money in reserve for future needs, for example -- have caused unhappiness among many victims' families.

Jackie Lynch of Mount Vernon, Va., whose husband was killed at the Pentagon, said those choices should be made by victims' relatives.

"The families can save it (themselves) for long-term counseling," Lynch said. If the charities "are not going to give it to us, they need to give it back to the people who donated."

The major charities ended their solicitations for attack-related giving months ago, but many continue to receive sizable donations.

"It's amazing," said Marc Carey, spokesman at the World Trade Center Relief Fund, which is still pulling in an average of $21,500 daily. "We thought this thing was going to go on for several months and then slow way down, and it's amazed even us."

While there have been reports of fraudulent claims and some fraud involving upstart nonprofits, no major charities have been accused of stealing money.

Sen. Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee, has asked the General Accounting Office to investigate how charities have managed their donations, citing concerns among his constituents about where their money was being spent.

"I believe that accountability is critical to any charity's continued operation since transparency instills public confidence that taxpayer dollars are used wisely," he wrote.

Charity officials say they have done a good job of keeping the public informed on what they have raised and how it has been spent. The Red Cross, for example, hired an outside auditor to oversee its Liberty Fund and post quarterly updates on the Internet.

"This is the most public charity exercise in history," said Joshua Gotbaum, chief executive officer of the September 11th Fund, which has detailed all of its grants on its Web site.

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