Flood of Sept. 11 Aid Swamps Charities

Americans have opened their hearts and wallets to the victims of Sept. 11, giving more money to a single cause in a shorter time than ever before.

Relief organizations have been swamped with more than $1.3 billion in gifts and pledges in the weeks since the attacks on the World Trade Center and the Pentagon. An astounding 70% of U.S. adults donated money, blood or time to the relief effort, according to a survey conducted for the Independent Sector, a coalition of nonprofit groups. More than 215 corporations and foundations donated at least $1 million, and about 50 gave at least $5 million apiece. With money still coming in, total contributions could exceed $1.5 billion.

“People saw these terrible scenes on their television sets, and the only way they felt they could do something was by giving money, or going out and buying a flag,” said Kathleen D. McCarthy, director of the Center for the Study of Philanthropy at the City University of New York. “Otherwise, you were just powerless, and . . . this was a way of fighting back.”

Numbed by grief or language barriers, some victims could yet fall through the cracks. But as a group, the victims of Sept. 11 are being very well taken care of. Indeed, the charitable response has been an uplifting coda to a terrible catastrophe, inspiring testimonials to the generosity and resilience of Americans.

Yet the tsunami of giving is also creating hard choices for relief organizations, including problems of abundance that usually are the least of their worries. Because the charities have raised far more than they expected or required to meet immediate needs--such as food and shelter--they face a special challenge in disbursing money fairly, without duplication and in ways that satisfy donors.

The reduction of the death toll--from as many as 6,000 to 3,300--means more money is available for each family. Moreover, the enormous pot of charity is only part of the aid that victims will receive.

For example, the New York State Insurance Department has estimated that $2 billion in life insurance benefits will go to survivors; by early November, at least $600 million had been paid, according to a survey by the Life Insurance Council of New York, a trade group.

Victims also qualify for a range of government assistance, including Social Security survivor benefits and crime-victim funds. And many families are likely to receive awards of $1 million or more from the multibillion-dollar compensation fund that Congress adopted as part of the airline rescue bill.

Most of the charitable donations are being distributed as direct cash aid to families who lost a breadwinner. Some charities have been giving equal amounts to eligible families, while others have apportioned funds by the number of family members. Other groups are covering monthly expenses of victims, such as mortgages and car payments. Accordingly, well-heeled families are able to qualify for more help than those with modest expenses. Moreover, fire and police widows are expected to get hundreds of thousands of dollars more than other victims because the amounts donated exclusively for these families were so huge.

Americans have responded generously to disasters before. About $40 million was raised to aid victims of the Oklahoma City bombing in 1995, and more than $100 million was donated after the devastation in South Florida of Hurricane Andrew in 1992.

But in this case, “the money poured in so quickly, the charities are scrambling to figure out what to do with it,” said Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog group.

There could be a backlash, Borochoff said, if the charities are perceived as collecting and distributing an embarrassment of riches. On one hand, he said, some donors will be happy to have done whatever they could to help grieving families rebuild their lives. But other donors may “not be happy to learn” that beneficiaries were already in line for big insurance and compensation payouts, he said.

The flood of generosity also has been watched with trepidation by other charities, who face the triple whammy of a weak economy, tapped-out donors and the chilling effect of the anthrax scares on raising money through the mail. As a result, many charities head into December, typically their biggest fund-raising month, with fingers crossed and a sense of foreboding.

About 200 organizations raised money for Sept. 11 relief, many of them created overnight for that purpose. The IRS quickly granted tax-exempt status to 120 of these groups.

But seven big charities alone have taken in more than $1.2 billion: the American Red Cross, the September 11th Fund, the Twin Towers Fund, the New York Fire Fighters 9-11 Disaster Relief Fund, the New York Police and Fire Widows’ and Children’s Benefit Fund, the Salvation Army and the Robin Hood Relief Fund.

IRS Rules Delayed Disbursement of Funds

By early November, the groups had disbursed about $200 million in aid, yet faced complaints that they were moving too slowly. They had hit a barrier in IRS rules, which allow them to give immediate relief to anyone, but require determinations of financial need before long-term help is provided.

Ultimately, the IRS yielded to the philanthropic juggernaut, declaring that groups would not imperil their tax-exempt status by giving aid without determining need. “The IRS did not want to be the one to stand in the way” of speeding money to victims, said Marvin Friedlander, of the IRS’ exempt organizations division.

The decree has quickened the money flow, but has not solved the question of what to do with all the cash.

The Red Cross has spent the most to date--$160 million--but that is less than one-third of the $582 million it has collected.

Darren Irby, a Red Cross spokesman, said the logistical demands of responding to the Sept. 11 crisis was like starting “a Fortune 500 company, if you will, in a matter of hours or days.”

The group says it rushed nearly 48,000 volunteers and 1,600 staff to the crash sites in New York, Virginia and Pennsylvania, and opened 64 shelters, mostly for travelers stranded by the grounding of planes. A nationwide call center was established in a defunct furniture store in Falls Church, Va., where about 125 Red Cross workers dealt with everything from aid requests by victims to queries on how to explain the terror attacks to children. Altogether, the Red Cross estimates that it has provided food, clothing, lodging, counseling and cash to more than 25,000 families.

The group has also given checks for three months of living expenses to more than 2,900 of the families who lost loved ones, or an average of $16,300 apiece. About 500 other families declined the aid, saying they didn’t need it.

The Red Cross came under bitter attack when it disclosed plans to spend part of the money on “emerging needs,” such as a frozen blood reserve, rather than on direct aid to victims. New York Atty. Gen. Eliot Spitzer threatened legal action, calling it a violation of an implied promise to donors.

Red Cross officials ultimately bowed to pressure and promised to spend all the money to benefit victims. The three-month cash gift program has been extended to a full year. During the next six months, cash distributions will total $111 million, or an average of $38,000 per family. The Red Cross says it is also hiring 200 caseworkers to deal with victims’ long-term needs.

Even so, about $300 million of the Red Cross funds will remain unspent at the end of this year. The group says that in January it will present a spending plan for the rest of the money. Under consideration is a program to help small businesses that were damaged or destroyed by the World Trade Center collapse.

Three big charities raised $284 million for families of the 400 police, fire and government workers who died at the World Trade Center. Dozens of smaller charities also are raising money exclusively for police and fire families. Some recipients could get more than $750,000.

Funds for Survivors of Firefighters, Police

The New York Fire Fighters 9-11 Disaster Relief Fund, established by the International Assn. of Fire Fighters and two of its New York locals, has raised $95 million for families of the 344 firefighters and paramedics who died in the rescue effort. So far, the families have received $45,000 each. Altogether, the families are expected to receive an average of $200,000 each.

The Twin Towers Fund, established by New York City Mayor Rudolph W. Giuliani, has raised more than $113 million for families of New York police and firefighters and Port Authority police. The gifts are based on family size. So far, nearly $47 million has been paid out to 389 families, or an average of $120,000 apiece.

The New York Police and Fire Widows’ and Children’s Fund has taken in $76 million for the police officers’ and firefighters’ families, and distributed aid of $3.6 million so far.

“These are the guys who were running in the buildings when everybody else was running out,” said Jeffrey E. Jordan, a Washington lawyer and counsel to the 9-11 disaster fund.

Donors “wanted this money to go to these people in recognition of . . . extraordinary heroism, and I think personally they didn’t care if it was too much money.”

Police and firefighter survivors will be getting other aid too. Each family will receive $250,000 under a Justice Department program for public safety officers who die in the line of duty. Spouses of the firefighters and police officers will continue to receive their base salaries until they remarry or die.

For many victims, however, the biggest source of help will be the September 11th Victim Compensation Fund, created by Congress as part of the airline rescue bill.

Last week, Atty. Gen. John Ashcroft appointed Kenneth R. Feinberg, a Washington attorney, to serve as special master in charge of the fund.

The fund was intended to save the airlines from being destroyed by civil damage suits. At the same time, the streamlined procedures will make it quicker and easier for bereaved families to be compensated for economic losses and pain and suffering than if they took their cases to court. Compensation from other sources is to count against payouts from the fund, though it’s unclear if charity will reduce the size of awards.

Although the Sept. 11 attacks were unique in the nation’s history, some have warned that the scale of generosity could raise expectations to dangerous heights.

Some Legislators Fear Setting a Precedent

Congress did not enact a compensation program for “victims of the Oklahoma City bombing, earthquakes in California, hurricanes in Florida and floods along the Mississippi River,” Rep. James F. Sensenbrenner Jr. (R-Wis.), chairman of the House Judiciary Committee, said during debate on the airline rescue bill.

“If a disaster strikes any of our hometowns, how can we explain voting for an entitlement in this bill, but not for our own constituents?” Sensenbrenner said. “Stop and think of the precedent this bill sets when future disaster strikes.”

For another group of terror victims--families of Americans who died in the 1998 U.S. Embassy bombings in East Africa--Congress’ swift response only heightened their sense of being forgotten.

“Certainly, our hearts go out to every victim who lost a family member” on Sept. 11, said Edith Bartley, whose father, Julian Bartley, the U.S. consul general in Kenya, and 20-year-old brother Jay, were killed in one of the attacks. “All of us who lost family members in ’98 can certainly relate.”

The nearly simultaneous blasts, allegedly orchestrated by Osama bin Laden, destroyed the U.S. embassies in Kenya and Tanzania, killing 224 people, including a dozen Americans.

The families consider the deaths a clear case of negligence because the State Department had been warned that lax security and the presence of an active terrorist cell in Kenya made the embassy vulnerable to attack.

But “many members [of Congress] in their narrow-mindedness would say: ‘Well, did I have a constituent who was killed?’ They just didn’t get it,” Bartley said.

Suddenly, things may be turning in the families’ favor. On Nov. 29, 13 House members co-sponsored a bill to open the compensation fund to claims by embassy bombing victims.

It was disheartening that it “took Sept. 11 for Congress to pay attention to us,” said Bartley. But now there is movement, and “we’re pleased.”