Learning the Lessons of September 11: Charities Reassess How They Handled Aid

After their mother was killed when American Airlines Flight 11 crashed into the World Trade Center,

Carie and Danielle Lemack started Families of September 11, a nonprofit group in Washington that provides emotional support and advocacy for victims’ families.

A year later, as the Lemacks make plans to return to the site of the disaster to commemorate their mother, Carie says she is still spending considerable time watching over charities to make sure they are distributing money as donors intended. “It seems like the charities that raised the most money have had the most problems effectively and efficiently distributing it,” Ms. Lemack says.

Many other people who have sought help from charities have felt the same kind of anger and confusion in the year since the attacks. Victims, family members, and even some nonprofit leaders say that many charities did a poor job of informing donors how their money would be used, failed to collaborate with other relief organizations, and made it painfully difficult for the neediest people to get emergency funds in a timely way.

As a result of the complaints, charities have begun to reassess their performance. In addition, the General Accounting Office, the investigative arm of Congress, is working on a preliminary report assessing charitable activity after September 11. In the meantime, some charities have taken remedial steps to ensure a better response the next time they face a crisis of similar complexity and proportion as the terrorist attacks.

One-Third of Donations to Be Distributed

As government and charity officials review the past year, donors continue to contribute to September 11–related causes. Twenty of 30 nonprofit groups surveyed by The Chronicle that raised money in response to the attacks continue to accept gifts.

Of the $2.25-billion that the 30 organizations have raised, more than one-third, or $805.7-million, remains to be distributed. Eight groups have distributed more than 90 percent of the money they collected. Ten have distributed less than half.

Most of the money still in charities’ hands has been earmarked for long-term needs, including educational scholarships for those who lost family members in the attacks, and psychological and medical care for those affected by the events. In addition, charities are still awarding money to help defray everyday expenses for victims’ families, and some have put aside money for workers who lost income as a result of the attacks.

“We’re in it for the long haul,” says Shawn Pattison, a spokesman for the Robin Hood Foundation, in New York, which has distributed 60 percent of the $59-million it raised, with the rest earmarked for medical and mental-health services for people affected by the attacks. “Recovery is a long process.”

Changes at Salvation Army

As charities continue to assess the needs of victims and their families, they also are asking deeper questions about what they could have done differently, or might still do better, when faced with large-scale demands for relief.

One of the biggest lessons they have learned: Be prepared for the worst. Not even the Salvation Army, which raises more money than any other charity in the United States, had the systems in place to react to the massive outpouring of support, says Maj. George E. Hood, assistant community relations and development secretary. “This disaster was far beyond anything we had prepared for,” he says.

After the tragedy, so many people called the Salvation Army that it shut down its telephone systems in New York and Washington, Mr. Hood says. The organization has since hired a company to handle situations in which the Army receives a huge volume of calls.

The Salvation Army also broadened its national disaster-response program as a result of September 11. Previously, the organization was prepared to handle only natural disasters, which are geographically contained. Thanks to a three-year, $4.66-million grant it received from the Lilly Endowment in May, the Salvation Army will develop a national disaster-relief training program, Mr. Hood says. Part of the money is being used for the Army’s first-ever North American Disaster Training Conference, scheduled for later this month.

Immediately after the tragedy, the Salvation Army realized how vulnerable it was to groups using its name to raise money. More than 2,000 corporations in the United States posted Salvation Army banners on their Web sites, Mr. Hood estimates. “Normally we’re very selective in how we align with companies, but in this case the need was so spontaneous we lost control,” Mr. Hood says. “Fortunately, it worked out OK.”

The reason it worked out was because of a partnership the Salvation Army established after September 11 with Yahoo, the online search-engine company. Whenever a donor clicked on a Salvation Army banner on a corporate Web site, the donor was directed to the online donation page that Yahoo had set up for the Salvation Army.

The Army brought in $5-million by the end of 2001 from the Yahoo partnership. Typically, the organization raises about $1-million a year online.

Still, despite its success with Yahoo, the Salvation Army didn’t raise nearly as much money as several other groups. So far it has brought in $87.7-million, or just under 4 percent of the total collected for September 11 relief. The Army’s fund-raising performance in the wake of the attacks has opened up discussions at the organization’s Alexandria, Va., headquarters about raising money for disaster relief: “Should we be aggressive, or keep a passive role in allowing it to happen at the will of the general public?” says Mr. Hood. “That’s met with differing opinions within our organization.

“Right now we’re not planning to change anything,” says Mr. Hood. “But we’re discussing whether we want to make disaster relief more of a primary focus and dedicate the infrastructure to respond to it.”

Red Cross Raised $988.8-Million

In contrast to the Salvation Army, the American Red Cross’s share of September 11–related donations was in the double digits. It raised 44 percent of the total, or $988.8-million, by far the most of any group.

But after members of Congress condemned the Red Cross for raising hundreds of millions of dollars in connection with the attacks without making clear that some of the money would be used for other purposes, the charity changed the way it handles donations and communicates with contributors. Under the new procedure, Red Cross solicitations emphasize that gifts to the group’s Disaster Relief Fund could be used for purposes other than a specific disaster that an advertisement may mention.

Questions From Senator

Yet despite the Red Cross’s attempts to overhaul its fund-raising approach, a key member of Congress remains skeptical about the charity’s operations. U.S. Sen. Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee, this spring posed a lengthy series of questions to the Red Cross about its September 11–related activities. The charity responded, but Mr. Grassley continues to investigate the Red Cross’s management and distribution of September 11 money, along with its financial reporting.

Mr. Grassley, in an interview, suggested the Red Cross changed its fund-raising approach primarily to protect its image, saying it was “more that embarrassment is leading them to change rather than a conviction for change.”

Red Cross officials say the increased scrutiny has taught them several lessons about dealing with donors. Donors want to know when enough money has been collected, and exactly how new contributions will be used, says Skip Seitz, senior vice president for growth and integrated development.

While charities like the Red Cross are focusing more on donor relations, many charities are just beginning to realize the need to build stronger relationships among themselves.

A common criticism of charities was that they didn’t move quickly enough in cooperating with one another, say advocates for victims’ families and other observers. One problem was that charities never created a common application form to make it easier for people to seek help.

Compared with charitable cooperation after the Oklahoma City bombing in 1995, efforts in New York were poorly coordinated, says Nancy Anthony, president of the Oklahoma City Community Foundation. New York charities were slower to conclude that they needed to cooperate, she says.

Case workers also got caught up in responding to financial needs, sometimes at the expense of emotional needs, Ms. Anthony says. “It’s like making a cake,” she says. “Maybe money is the flour and you’ve got to have it to make the cake. But if you don’t know how to use the flour, it won’t make any difference.”

Collaboration among nonprofit groups appeared to increase after 13 New York charities formed the 9/11 United Services Group. The group used most of its $1-million in support to set up a shared hot line and a database that lists relief services available in New York.

The United Services Group also helps train about 150 full-time case workers who are employed by some 25 different charities. The case workers have received more than 110,000 phone calls since September 11, and are still getting more than 300 calls a day.

“Charities are sharing assignments and referring people to each other,” says Jack Krauskopf, the chief program officer of the New York group. “The lessons we’ve learned don’t have sweeping potential, but they could be applied selectively in different areas of social services and extend beyond September 11.”

To the extent that charities failed to coordinate their activities with one another, it also meant that they were less likely to reach everyone who needed relief following the tragedy, observers say. Immigrants and minorities — many of whom lost jobs as a result of the attacks — have been particularly neglected, advocates and researchers say.

A study by the consulting firm McKinsey & Company shows that the financial needs of an estimated 45,000 people who lost earnings as a result of the attacks are expected to reach $700-million over the next year alone. That compares with $40-million for the families of those who died or are missing in the attacks, according to the study. Seventy percent of the 45,000 people are immigrants or minorities, the study says.

“The immigrant community has been the faceless victims of this whole tragedy,” says Juan A. Figueroa, president of the Puerto Rican Legal Defense and Education Fund, in New York. His group started a program to help immigrants affected by the attacks gain financial aid from charities. Among the hurdles immigrants face, he says, are language barriers and, in some cases, the threat of deportation.

Another charity, the Black United Fund of New York, raised $61,230 and distributed it to 471 people affected by the attacks. But many more people, including those who lost jobs as a result of the downturn in the tourism economy, still need financial help, says Kermit Eady, the charity’s president. “These people are jobless right now because there is not a big market in New York City for cleaning hotels,” he says, “and of course, there is no World Trade Center to be cleaned.”

Those people could find it increasingly difficult to receive money, because many charities that continue to accept contributions say they are receiving only small amounts from donors. At the same time, people like Carie Lemack, of Families of September 11, worry that money that is available for relief may not be getting to those who need it most.

“I can’t speak for every person who still has needs,” says Ms. Lemack. “But the fact remains that there is still a lot of money out there that hasn’t gotten to the people it was intended to go to. That’s a big concern that still needs to be fixed.”