June 11, 2002; Page A01
By Lena H. Sun, Sarah Cohen and Jacqueline L. Salmon, Washington Post Staff Writers

Of the $2.3 billion raised by the largest charities in the nine months since the terrorist attacks, 29 cents of each dollar has gone to the survivors of those killed.

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 roughly 20 cents of each dollar has gone to displaced workers and others affected by the attacks and an additional 40 cents has yet to be distributed. 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 already received, on average, about $1 million each -- 10 times the figure that has typically gone to the families of others killed in the attacks. Other money set aside for the families of the dead firefighterscould 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. There were many thousands more in this group than were killed in the attacks, but 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 this year. By 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 of donated dollars were spent may not ever be possible becausethe funds often are distributed through a network of smaller nonprofits. And while many individual charities are reporting their activity, no single agency or repository compiles the accumulated donations so the public can see a total picture of collections and expenditures.

Experts in philanthropy argue that a careful accounting of the funds raised since Sept. 11 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 collapse of the World Trade Center. "The families never expected to get all this charity. It's not like we woke up on September 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.

'It's Amazed Even Us'

Carwashes, lemonade stands run by Girl Scouts, firefighter boots stuffed on street corners with $10 and $20 bills.

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's 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 a survey by 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, including the New York and Port Authority police departments.Families of the dead and seriously injured also are eligible to receive awards from a separate federal victims compensation fund administered by the Justice Department.

The two largest funds alone also 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 significant unhappiness among many victims' families.

Jackie Lynch of Mount Vernon, 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 many 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."

For Donn Marshall, whose wife died at the Pentagon, the most touching are the relatively small checks that still come in the mail, from churches, lodges and other organizations around the country.

"You would think a lot of people would forget," said Marshall, who has two small children. "But they don't. It just keeps on coming."
'Accountability Is Critical'


While there have beenreports of fraudulent claims and some fraud involving upstart nonprofits, no major charities have been accused of stealing money. But philanthropy watchdog groups and some government officials complain that nonprofits collecting in the name of the Sept. 11 victims have been able to operate with little accountability in a patchwork system of oversight from state and federal agencies.

Sen. Charles E. Grassley (Iowa), the ranking Republican on the Senate Finance Committee, has asked the General Accounting Office to investigate how charities have managed their donations from Sept. 11, citing concerns among his constituents about where their money was being spent. Last month, Grassley asked the Red Cross for a comprehensive accounting of its finances.

"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.

Charities are required to file detailed public tax returns each year with the Internal Revenue Service, but the agency lacks the resources and the mandate to regulate fundraising by charities or check the accuracy of many of their reports.

Officials at the major charities 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.

Still, the spotlight placed on the charities also has exposed weaknesses and triggered changes in fundraising practices.

At the Red Cross, officials announced last week that they would be more explicit in explaining to the public that funds solicited for one disaster also could be used to help victims elsewhere. The Red Cross had been loudly criticized last fall for planning to use some Sept. 11 funds for other purposes.
'We Broke Our System'


When Americans opened their wallets in the days after the terrorist attacks, the nation's charities could not have imagined what was coming their way.

Three people per second logged on to the Internet to pledge their help to the Red Cross, but the steady barrage overloaded the Web site, and donors were met with error messages and long waits before they could connect.

Officials at the International Association of Fire Fighters union said they looked up one day to see the head of a District of Columbia local walking in with a gunnysack that appeared to be full of bricks. It was stuffed with $400,000 in checks, tightly bundled, sending the officials scrambling to find a bank willing to help process the donations. Eventually, the Amalgamated Bank of New York processed more than 260,000 checks for the organization without charge.

After the Salvation Army offered to pay household expenses of affected families, thousands of bills flooded its Greater New York division in Lower Manhattan, overwhelming its antiquated check-printing system.

Under normal circumstances, the office printed at most 50 checks a week on its one dot-matrix printer.

"Overnight, we instantly went to thousands a day," said Al Peck, director of social services. "We actually paid the bills, so instead of one check per family, we had seven checks per family," Peck said. "And we also broke our system."

At one point, the backlog of bills was seven weeks. Peck said he did not know of any families who lost services as a result, but the organization rushed to contact utility and mortgage companies to let them know the money was coming.

The office eventually converted to a new system in January that could handle up to 2,000 checks a day. But until then, officials designated one woman "whose whole job was to talk nice to the printer and keep it going," Peck said.

The charities also bumped into unforeseen legal questions.

David Golush, treasurer for the New York Police and Fire Widows' and Children's Benefit Fund, said that in about 140 cases -- more than one-third of the families his organization will pay -- complications had come up over who should be named beneficiary.

The fund's rules say the person listed on the official life insurance policy should be paid.

But Golush found that many of the dead uniformed workers had been divorced and remarried, sometimes with additional children, but had never changed the beneficiary on their life insurance policy. In the end, the fund made payments to the beneficiaries named on the policy.

The Uniformed Firefighters Association is involved in a dispute over whether parents and siblings should benefit from its fund for widows and children of firefighters killed in the line of duty. That issue, which has been turned over to New York Attorney General Eliot Spitzer to sort out, is one of the reasons the union has given out just18 percent of the $70 million that came in.

As the weeks passed, the Red Cross and other charities found they had to expand what they meant by family. Adult children. Fiancees. Gay partners. Even mistresses.

"Our definition of family included all those people who could prove they had regular financial contributions from the deceased," said spokesman Darren Irby.

"Dozens" of women told Red Cross caseworkers that they were the mistresses of executives who died in the World Trade Center and showed how they were financially dependent on them. The women were not treated differently from family members who sought aid, Irby said.

http://www.washingtonpost.com/wp-dyn/articles/A28507-2002Jun10.html