Terror’s Legacy: 250 Charities

In the days and weeks after the September 11 terrorist attacks, more than 250 new charities came on the scene, approved by the Internal Revenue Service through a special process intended to bring speedy aid to victims, survivors, and others affected by the disaster.

Now, six months after the attacks, The Chronicle has taken a close look at many of the new charities, their missions, and their fund-raising performance. Among the findings:

• The IRS gave “fast track” approval to numerous charities whose missions have little or nothing to do with the attacks. Critics say the IRS’s actions show that the agency does a poor job of screening applications for tax-exempt status. Officials of several charities with no direct relationship to September 11 said IRS personnel gave them unsolicited advice on how to include references to the disaster in their applications to gain rapid approval. The IRS granted tax-exempt status to at least 24 groups that existed well before September 11.
• While many of the groups are raising money to pay for the immediate needs of victims and their families, some are focused on alleviating survivors’ long-term financial obligations, memorializing the victims of the disaster, lobbying for more federal aid for survivors, and trying to prevent other terrorist incidents on U.S. soil. Some charity leaders say they felt compelled to organize because existing disaster-relief organizations were not meeting those needs.
• Charities collecting money for September 11 recovery efforts have raised more than $2-billion and distributed more than $1-billion, according to a Chronicle survey. The charity with the most money, the American Red Cross, has been criticized for inconsistently distributing its donations, and the BBB Wise Giving Alliance, which rates charities’ performance, removed a favorable report on the Red Cross from the alliance’s Web site while waiting to receive information on how the Red Cross handled donations after September 11.