September 11: More Effective Collaboration Could Enhance
Charitable Organizations' Contributions in Disasters (19-DEC-02,
GAO-03-259).
Surveys suggest that as many as two-thirds of American households
have donated money to charitable organizations to aid in the
response to the September 11 disasters. To provide the public
with information on the role of charitable aid in assisting those
affected by the attacks, GAO was asked to report on the amount of
donations charities raised and distributed, the accountability
measures in place to prevent fraud by organizations and
individuals, and lessons learned about how to best distribute
charitable aid in similar situations.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-259
ACCNO: A05484
TITLE: September 11: More Effective Collaboration Could Enhance
Charitable Organizations' Contributions in Disasters
DATE: 12/19/2002
SUBJECT: Best practices
Charitable organizations
Disaster relief aid
Fraud
Funds management
National preparedness
Terrorism
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-03-259
Report to the Ranking Minority Member, Committee on Finance, U. S. Senate
United States General Accounting Office
GAO
December 2002 SEPTEMBER 11 More Effective Collaboration Could Enhance
Charitable Organizations* Contributions in Disasters
GAO- 03- 259
Although it may be difficult to precisely tally the total amount of funds
raised in response to the September 11 attacks, 35 of the larger charities
have reported raising an estimated $2.7 billion since September 11, 2001.
About 70 percent of the money that has been collected by these 35
charities has been reported distributed to survivors or spent on disaster
relief since September 11, 2001. Charities used the money they collected
to provide direct cash assistance and a wide range of services to families
of those killed, those more indirectly affected through loss of their job
or residence, and to disaster relief workers. Some of the charities plan
to use funds to provide services over the longer term, such as for
scholarships, mental health counseling, and employment assistance.
Charities and government oversight agencies have taken a number of steps
to prevent fraud by individuals or organizations, and relatively few cases
have been uncovered so far. However, the total extent of fraud is not
known and will be difficult to assess particularly in situations when
organizations solicit funds on behalf of September 11 but use the funds
for other purposes.
Overall, charitable aid made a major contribution in the nation*s response
to the September 11 attacks, despite very difficult circumstances. Through
the work of charities, millions of people contributed to the recovery
effort. At the same time, lessons have been learned that could improve
future charitable responses in disasters, including easing access to aid,
enhancing coordination among charities and between charities and the
Federal Emergency Management Agency (FEMA), increasing attention to public
education, and planning for future events. FEMA and some charitable
organizations have taken some steps to address these issues. However, the
independence of charitable organizations, while one of their key
strengths, will make the implementation of these lessons dependent on
close collaboration and agreement among charities involved in aiding in
disasters.
VIP Viewing Area at World Trade Center Site.
Source: GAO. SEPTEMBER 11
More Effective Collaboration Could Enhance Charitable Organizations*
Contributions in Disasters
www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 259. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Cynthia M. Fagnoni (202) 512- 7215. Highlights of
GAO- 03- 259, a report to the
Ranking Minority Member, Committee on Finance, United States Senate
December 2002
Surveys suggest that as many as two- thirds of American households have
donated money to charitable organizations to aid in the response to the
September 11 disasters. To provide the public with information on the role
of charitable aid in assisting those affected by the attacks, GAO was
asked to report on the amount of donations charities raised and
distributed, the accountability measures in place to prevent fraud by
organizations and individuals, and lessons learned about how to best
distribute charitable aid in similar situations.
To help facilitate collaboration among charitable organizations involved
in disasters, GAO is recommending that FEMA convene a working group of
involved parties to take steps to implement strategies for future
disasters, building upon lessons learned in the aftermath of September 11.
The working group should address issues such as the development and
adoption of a common application form and confidentiality agreement for
use in disasters and strategies for enhancing public education regarding
charitable giving.
This group could include representatives of key charitable and voluntary
organizations and foundations; public and private philanthropic oversight
groups and agencies; and federal, state, and local emergency preparedness
officials.
Page i GAO- 03- 259 Charities, September 11 Role Letter 1
Results in Brief 2 Background 4 Charities Have Played an Unprecedented
Role in the Amount of
Money Collected and Types of Assistance Provided to September 11 Survivors
7 Charities and Oversight Agencies Have Several Accountability
Measures in Place; Relatively Few Cases of Fraud Identified So Far 17
Little Coordination of Charitable Aid Occurred Early on, although a
More Integrated Approach Emerged Months Later 20 Lessons Learned after
September 11 Could Improve Future
Responses but Pose Implementation Challenges 24 Conclusions 27
Recommendation for Executive Action 27 Agency Comments 28
Appendix I September 11th Victim Compensation Fund of 2001 30
Appendix II September 11 Fund Data for 35 Large Charities 31
Appendix III Contact Information for State Charity Officials 33
Appendix IV Members of National Voluntary Organizations Active in Disaster
35
Appendix V Organizations Participating in 9/ 11 United Services Group
Service Coordination 36
Appendix VI Comments from the Federal Emergency Management Agency 37
Contents
Page ii GAO- 03- 259 Charities, September 11 Role Tables
Table 1: September 11 Fund Data for 35 Charities 8 Table 2: Examples of
the Range of Services Provided by the Two
Largest September 11 Charities 12 Table 3: Types of Fraud and Related
Accountability Measures 18
Figure
Figure 1: Amount of Aid Raised and Distributed by Selected Charities 11
Abbreviations
FEMA Federal Emergency Management Agency IRS Internal Revenue Service NYC
New York City USG United Services Group
Page 1 GAO- 03- 259 Charities, September 11 Role
December 19, 2002 The Honorable Charles E. Grassley Ranking Minority
Member Committee on Finance United States Senate
Dear Senator Grassley: On September 11, 2001, America suffered terrorist
attacks that resulted in the deaths of more than 3,000 people in New York
City (NYC), at the Pentagon in Virginia, and in Pennsylvania. In addition,
economists suggest that in NYC alone, about 100,000 people may have lost
their income as a result of these events. 1 Federal, state, and local
governments responded to this disaster in a variety of ways, and private
charities provided aid beyond that of government. 2 Some surveys suggest
that as many as two- thirds of American households have donated money to
charitable organizations to aid in the response to the disaster.
To provide you with information on the role of charitable aid in assisting
those affected by the attacks, you asked us to determine the following:
(1) How much in donations have charities raised to assist September 11
survivors, and what assistance has been made available to them? (2) What
accountability measures are in place to ensure that only eligible
individuals receive aid, and what is known about fraud committed by
organizations and individuals? (3) What coordination efforts have been
pursued, if any, in response to the disaster? (4) What lessons can be
learned about how to best distribute charitable aid in similar situations?
To answer these questions, we contacted September 11- related charities
identified by the Chronicle of Philanthropy, a key trade publication of
the nonprofit sector, and gathered information on the funds they raised
and
1 See U. S. General Accounting Office, Review of Studies of the Economic
Impact of the September 11, 2001, Terrorist Attacks on the World Trade
Center, GAO- 02- 700R (Washington, D. C.: May 29, 2002).
2 The 2001 Emergency Supplemental Appropriations Act for Recovery from and
Response to Terrorist Attacks on the United States, P. L. 107- 38,
mandates that not less than one- half of the $40 million appropriated
shall be for disaster recovery activities and assistance activities in New
York, Virginia, and Pennsylvania.
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 259 Charities, September 11 Role
distributed. We supplemented the Chronicle*s list with information we
gathered from additional charities during our review. We interviewed
officials from 12 of the larger September 11- related funds in NYC and
Washington, D. C.; representatives from three September 11 victims groups;
officials from various philanthropic oversight organizations; and
representatives from the major charities providing assistance after the
Oklahoma City bombing in 1995. We also spoke with officials from the
Federal Emergency Management Agency (FEMA), the federal agency charged
with responding to disasters; the NYC Office of Emergency Management; and
the Office of Family Policy of the Department of Defense. Finally, we
interviewed officials from government oversight agencies, including the
Internal Revenue Service (IRS), officials from state charity offices or
attorneys general offices in seven states, and the New York County
(Manhattan) District Attorney*s Office. We conducted our review from
January through November 2002 in accordance with generally accepted
government auditing standards. We did not independently verify data
provided by the charitable organizations or oversight officials, and it
was not within the scope of our work to review the charities* systems of
internal control or to trace their use of funds. On September 3, 2002, we
issued an interim report on the results of our review. 3
Although it may be difficult to precisely tally the total amount of funds
raised, 35 of the larger charities have reported raising almost $2.7
billion since September 11, 2001. About 70 percent of the money that has
been collected by these 35 charities has been distributed to survivors or
spent on disaster relief as of October 31, 2002. Fund distribution rates
vary widely among this group of charities, in part because of differences
in their operating purpose. For example, some charities were established
to provide immediate assistance, while others, such as scholarship funds,
were established to provide services over a longer period of time.
Charities reported distributing these funds for cash grants and a wide
range of services to families of those killed, those more indirectly
affected through loss of their job or residence, and to disaster relief
workers. Questions about how best to use the funds as well as service
delivery difficulties complicated charities* responses. For example, to
distribute aid, charities had to make extensive efforts to identify
victims and survivors as there were no uniform contact lists for families
of victims. In
3 See U. S. General Accounting Office, September 11: Interim Report on the
Response of Charities, GAO- 02- 1037 (Washington, D. C.: Sept. 3, 2002).
Results in Brief
Page 3 GAO- 03- 259 Charities, September 11 Role
addition, charities faced challenges in providing aid to non- English
speaking people in need of assistance. Some charities have focused their
efforts on these individuals.
Charities and government oversight agencies have taken a number of steps
to prevent fraud by individuals or organizations, and relatively few cases
have been uncovered so far. Most charities we spoke with required
applicants to provide documentation certifying identity, injury, death of
a family member, or loss of job or home, and may have asked for proof of
financial need. State attorneys general and local district attorneys also
told us that although they had limited resources available to address
September 11- related fraud, they are actively responding to public
concerns about charities. While information is available on identified
fraud cases, the total extent of fraud is not known, and it will be
difficult for charities and oversight agencies to assess.
Despite some early efforts, little coordination of charitable aid occurred
early on, although a more integrated approach emerged some months later.
Even with these efforts, September 11 survivors generally believed they
had to navigate a maze of service providers, and both charities and those
individuals who were more indirectly affected by the disaster were
confused about what aid might be available. Although steps were taken to
address some of these issues in previous disasters, the scope and
complexity of the September 11 attacks presented a number of challenges to
charities in their attempts to provide seamless social services for
surviving family members and others in need of aid. Some months after the
disaster, however, oversight agencies and large funders established a more
coordinated approach. This included the formation of coordinating
entities, the implementation of case management systems, and attempts to
implement key coordination tools, such as client databases.
Charities, government agencies, watchdog groups, and survivors*
organizations shared with us lessons that could improve the charitable aid
process in disasters in the future. These lessons include easing access to
aid for those who are eligible, enhancing coordination among charities and
between charities and FEMA, increasing attention to public education on
charitable giving, and planning for future events. Some efforts are under
way to address these issues. However, the independence of charitable
organizations, while one of their key strengths, will make implementation
of these lessons learned dependent on close collaboration and agreement
among these independent organizations. To help facilitate collaboration
among charitable organizations involved in disasters, we are recommending
that FEMA convene a working group of involved parties to
Page 4 GAO- 03- 259 Charities, September 11 Role
take steps to implement strategies for future disasters, building upon
lessons learned in the aftermath of September 11. In commenting on a draft
of this report, FEMA agreed with our recommendation and said that such a
working group would likely foster enhanced coordination and collaboration
and potentially lead to improvements in service to those affected by
disasters.
Charities are organizations established to address the needs of the poor
or distressed and other social welfare issues. Federal, state, and private
agencies and the American public monitor how well charities are meeting
these needs. Although not all charities have a disaster relief focus,
historically charities have adapted their work as needed to the immediate
or longer- term needs of disaster survivors. In these disaster aid
efforts, charities may cooperate with FEMA. Though charities and FEMA have
a substantial role in providing disaster aid, people affected by disasters
may also pursue other government or private sources of relief.
Charities represent a substantial presence in American society. Internal
Revenue Code Section 501( c) establishes 27 categories of tax- exempt
organizations; the largest number of such organizations falls under
Section 501( c)( 3), which recognizes charitable organizations, among
others. The term charitable, as defined in the regulations that implement
Section 501( c)( 3), includes
assisting the poor, the distressed, or the underprivileged; advancing
religion, education, or science; erecting or maintaining public
buildings, monuments, or works; lessening neighborhood tensions;
eliminating prejudice and discrimination; defending human and civil
rights; or combating community deterioration and juvenile delinquency.
An organization must apply for IRS recognition as a tax- exempt charity
that strives to meet one or more of these purposes. In general, a charity
serves these broad public purposes, rather than specific private
interests. Background
Purpose and Scope of the Charitable Sector
Page 5 GAO- 03- 259 Charities, September 11 Role
By 2000, IRS had recognized 1.35 million tax- exempt organizations under
Section 501( c), of which 820, 000 (60 percent) were charities. At the end
of 1999, the assets of Section 501( c)( 3) organizations approached $1.2
trillion and their annual revenues approached $720 billion. Charities pay
no income taxes on contributions received, but they can be taxed on income
generated from unrelated business activities.
Federal agencies, state charity officials, other nonprofit organizations,
and the general public may all participate in overseeing charitable
operations to protect the public interest. At the federal level, IRS has
primary responsibility for recognizing tax- exempt status and determining
compliance with tax laws, such as those governing the use of charitable
funds. 4 Notwithstanding these powers, IRS is not generally responsible
for overseeing how well a charity spends its funds or meets its charitable
purpose.
Despite the federal government*s significant indirect subsidy of charities
through their tax- exempt status and the allowance of charitable
deductions by individuals, the federal government has a fairly limited
role in monitoring charities, with states providing the primary oversight
of charities through their attorneys general and/ or charity offices.
These officials maintain registries of charities and professional
fundraisers, including financial reports of registrants. They also monitor
the solicitation and administration of charitable assets. Attorneys
general and state charity officials have extensive power to investigate
charities* compliance with state law and can correct noncompliance through
the courts. Although local law enforcement agents, such as district
attorneys, may assist the state with investigations of charities, they
tend to focus on the prosecution of the criminal cases of individuals who
defraud charities.
Further oversight of charities* efficiency and effectiveness is likely to
be carried out by the private sector, including *charity watchdogs,* and
the American public. Watchdogs such as the Better Business Bureau*s Wise
Giving Alliance and publications such as The Chronicle of Philanthropy
are the public*s primary sources for information on charitable
organizations and fund- raising. The questions and concerns people bring
4 IRS evaluates compliance by reviewing the informational Form 990, Return
of Organization Exempt from Income Tax. Oversight of Charities
Page 6 GAO- 03- 259 Charities, September 11 Role
to the attention of watchdogs and government officials are often the key
motivators for initiating investigations.
Charities have historically played a role in the nation*s response to
disasters. First, some charities, for example, the American Red Cross or
the Salvation Army, are equipped to arrive at a disaster scene and provide
mass care, including food, shelter, and clothing, and in some
circumstances, emergency financial assistance to affected persons. Next,
depending on the extent and nature of devastation to a community and
charities* typical services and capacities, some charities are best
structured to provide longer- term assistance, such as job training or
mental health counseling. Finally, new charities may form post- disaster
to address the needs of all survivors or specific population groups. For
example, after the September 11 attacks, charities were established to
serve survivors of restaurant workers and firefighters.
FEMA is the lead federal agency for responding to disasters and may link
with charitable organizations to provide assistance. According to FEMA
regulations, in the event of a presidentially declared disaster or
emergency, such as September 11, FEMA is required to coordinate relief and
assistance activities of federal, state, and local governments; the
American Red Cross; the Salvation Army; and the Mennonite Disaster
Service; as well as other voluntary relief organizations that agree to
operate under FEMA*s direction. Although charities are expected to be
among the first agencies to provide assistance to those affected, in the
event of some natural disasters, FEMA may anticipate need and be the first
to respond. FEMA can provide a range of assistance to individual disaster
survivors. In a natural disaster, such as a hurricane or flood, the bulk
of FEMA*s individual assistance program money tends to be given to
individuals whose residences have been damaged. September 11 presented a
different challenge for the agency: few people had damage to their homes,
but many needed unemployment assistance and help paying their mortgage or
rent.
Though FEMA and charities provide key resources to survivors of disasters,
a range of additional aid may be available for those affected by the
September 11 attacks. 5 Federal sources of aid to individuals include
5 Businesses, as well as individuals, may also access federal aid, for
example, Small Business Administration loans. Charities* Roles in
Disasters Other Sources of Disaster Relief Assistance
Page 7 GAO- 03- 259 Charities, September 11 Role
Social Security, Medicaid, Disaster Unemployment, and Department of
Justice benefits for fallen police officers and firefighters. 6 In
addition, the Congress has set up a Federal Victim Compensation Fund for
individuals injured and families of those who died in these attacks. See
appendix I for more information about this fund. From states, survivors
may obtain State Crime Victim Compensation Board funds, unemployment
insurance, or workers* compensation. Some families may also be able to
access private insurance or employer pensions. 7
While it may be difficult to tally precisely the total amount of funds
collected, 35 of the larger charities have raised almost $2.7 billion and
distributed about 70 percent of the money. Distribution rates vary widely
among the charities, in part, because some were established to provide
immediate assistance while others were established to provide assistance
over the longer term. Charities used the money they collected to provide
cash and a broad range of services to people directly and indirectly
affected, although questions about how best to use the funds as well as
service delivery difficulties complicated charities* responses.
Thirty- five of the larger charities have raised almost $2.7 billion as of
October 31, 2002, to aid the survivors of the terrorist attacks. (See
table 1.) These include a range of organizations, including large, well-
established organizations such as the American Red Cross and the Salvation
Army and other organizations created specifically in response to September
11, such as the Twin Towers Fund. While the total amount raised may
increase over time, many organizations are no longer actively collecting
funds. For example, The September 11th Fund stopped soliciting donations
in November 2001 and in January 2002 asked the public to stop sending
contributions to the fund.
6 The Department of Justice*s Public Safety Officers Benefit Fund provides
a one- time sum of $250,000 to the next- of- kin of a fallen public safety
officer, such as a firefighter. This amount was retroactively adjusted
after September 11, as the 2001 amount had been $152,000.
7 State Crime Victim Compensation Board Funds are available post- disaster
if, like the September 11 attacks or the Oklahoma City bombing, the
disaster site is also a crime scene. Charities Have Played
an Unprecedented Role in the Amount of Money Collected and Types of
Assistance Provided to September 11 Survivors
Of the Larger Charities, 35 Have Raised Almost $2.7 Billion; Most Aid
Collected Has Already Been Distributed
Page 8 GAO- 03- 259 Charities, September 11 Role
Table 1: September 11 Fund Data for 35 Charities Relief charities Amount
raised
American Red Cross Liberty Fund $1,011,000,000 The September 11th Fund
512,000,000 Twin Towers Fund 205,000,000 International Association of Fire
Fighters 161,000,000 New York Police and Fire Widows* & Children*s Benefit
Fund 117,000,000 Citizens* Scholarship Foundation 113,167,336 Salvation
Army 87,722,612 Uniformed Firefighters Association 71,000,000 New York
State World Trade Center Relief Fund a 68,730,000 New York Times 9/ 11
Neediest Fund 61,147,017 Robin Hood Foundation 60,300,000 Catholic
Charities USA 31,847,514 Catholic Charities of NY 25,400,000 Survivors
Fund 20,000,000 Windows of Hope 19,000,000 World Vision 12,428,378 New
York State Fraternal Order of Police Foundation 12,028,314 Port Authority
Police Benevolent Association 11,642,025 NYC Police Foundation 11,000,000
Americares Foundation 9,261,073 Navy- Marine Corps Relief Society 6,
800,000 Army Emergency Relief 5,792,588 Federal Employee Education &
Assistance Fund 5,500,000 United Jewish Communities 4,800,000 United Way
National Capital 3, 956,512 Union Community Fund 3,092,105 Lions Clubs
International Foundation 3, 023,000 Rotary International 1, 800,000
American Society for the Prevention of Cruelty to Animals 1, 744,000
Kiwanis International Foundation 1, 591,916 Tides Foundation 597,207
Jewish Federation of Greater Washington 450,000 National Italian American
Foundation 334,000 Farmers* Market Federation of NY 162,000 American Lung
Association 139,000
Total $2,660,456,597
Source: Data provided by charities. Most data are as of October 31, 2002,
unless otherwise noted in appendix II.
Note: We asked the charities to exclude funds they had received from other
September 11 funds to avoid overstatement of the funds involved. a This is
not a charity; the New York State Department of Taxation and Finance
established and
administers this fund of donations.
Page 9 GAO- 03- 259 Charities, September 11 Role
The large number of charities collecting funds for September 11
complicates the efforts to determine a precise count of the total funds
raised. The Metro New York Better Business Bureau Foundation has
identified 470 September 11- related charities, and the IRS estimates that
about 600 charities are involved in September 11- related fundraising. The
IRS took steps to quickly grant tax- exempt status to about half of these
600 charities after September 11. 8 While some of these new charities
appear to be smaller, specific fundraising events such as the Hike of
Hope, others like the Twin Towers Fund, which raised $205 million, became
major charities. While any one charity will have information on its
funding and services, the charitable sector as a whole generally does not
have reporting mechanisms in place to track funds across entities or for
any one event. Some tracking efforts are under way, however. For example,
the Metro New York Better Business Bureau Foundation recently surveyed the
470 September 11- related charities they identified and 270 responded to
its request for fund information.
Further complicating a precise tally of funds is the interfund transfers
that occurred among charities. For example, the Americares Foundation
raised $5.3 million in its Heroes Fund and transferred it to the Twin
Towers Fund to be distributed. Likewise, the United Jewish Federation of
New York distributed $5.4 million in grants it received from the New York
Times 9/ 11 Neediest Fund and the United Jewish Communities of North
America. The Metro New York Better Business Bureau Foundation estimates
that more than $400 million of the charitable aid it is tracking
represents duplicate listings of money raised by grant- making
organizations and the direct service providers they are funding. Moreover,
an unknown number of corporations have sold and are still selling products
for which some portions of the proceeds are to be donated to September 11
charities, a practice known as *cause- related marketing.* Some reports
cite hundreds of products being sold in the name of September 11
charities; the extent to which these funds have already been forwarded to
charities is not known.
A more complete accounting of the number of September 11 charities and the
amounts they raised might be possible when all charitable organizations
have filed with IRS the required annual information form,
8 IRS told us that in December 2002, it would begin a *limited operational
review* of 88 of the newly approved charities. This review will examine
whether the money raised by these charities was expended for charitable
purposes, whether these charities met their IRS filing requirements, and
whether or not the charitable funds raised provided personal or private
benefit to the charity or individuals involved.
Page 10 GAO- 03- 259 Charities, September 11 Role
called the IRS 990. Among other items, these tax- exempt 501( c)( 3)
organizations must report on their total revenues (including donations),
expenses, grants and allocations, and the total dollars of specific
assistance they provided to individuals. 9 This form is due in the fifth
month after the close of the organization*s taxable year. As IRS 990 forms
for these charities become available, examination of them may yield more
information; however, the way these data are reported may not necessarily
allow a precise accounting of dollars raised for September 11. For
example, pre- existing charities that served other purposes as well as
September 11, may not report funding data at the level of detail that
would link spending to September 11 purposes.
Of the almost $2.7 billion estimated collected by the larger 35 charities,
about $1.8 billion, or 70 percent, has been reported distributed as of
October 31, 2002. Fund distribution rates, however, vary widely from less
than 1 percent to 100 percent, in part because of the differing goals and
purposes of the charities. For example, some charities with high
distribution rates like the New York Times 9/ 11 Neediest Fund or the
United Way of the National Capital Area are primarily fundraisers that
make grants to direct service providers such as the Children*s Aid Society
and the Salvation Army, which provide immediate assistance to survivors.
Other charities, particularly those that will be providing scholarship
assistance to survivors like the Citizens* Scholarship Foundation, the
Navy- Marine Corps Relief Society, the Army Emergency Relief, and Windows
of Hope, have much lower distribution rates that reflect the longer- term
missions of their charities. Figure 1 shows the amount of aid raised and
distributed by charities. See appendix II for the amount of funds raised,
distributed, and distribution rates for each of the 35 charities.
9 For more information see U. S. General Accounting Office, Tax- Exempt
Organizations: Improvements Possible in Public, IRS, and State Oversight
of Charities, GAO- 02- 526 (Washington, D. C.: Apr. 30, 2002). Fund
Distribution Rates
Varied, Reflecting Different Charitable Goals and Purposes
Page 11 GAO- 03- 259 Charities, September 11 Role
Figure 1: Amount of Aid Raised and Distributed by Selected Charities
Charities provided a wide range of assistance to the different categories
of individuals affected, including the families of those killed, those
indirectly affected through the loss of a job or displacement from their
home, and services provided to the rescue workers and volunteers, as shown
in table 2. A full accounting of the range of services provided is
difficult to ascertain, as many large funders have provided grants to
multiple service providers. For example, The September 11th Fund has
provided grants to over 100 organizations, including direct service
providers like Safe Horizon, which provide assistance to families and
communities and to rescue and recovery efforts. Charities Provided Cash
and a Broad Range of Services to People Directly and Indirectly Affected
Millions of dollars 0 100
200 300
400 500
600 700
800 900
1,000 1,100
1,011 696
512 376
589 452
113 1
435 324
Raised Distributed
American Red Cross
The September 11th Fund
Police and firefighter (7 funds)
Citizens' scholarship fund
Others (25 funds)
Source: Data provided by the charities. Most data are as of October 31,
2002, unless otherwise noted in appendix II and do not reflect
distributions planned for the future.
Page 12 GAO- 03- 259 Charities, September 11 Role
Table 2: Examples of the Range of Services Provided by the Two Largest
September 11 Charities Charity Directly affected Indirectly affected
Immediate disaster
relief Other
American Red Cross * Liberty Fund 3,396 survivor families
received 12 months* living expenses, averaging $58,900 per family ($ 200
million total), and each estate will receive $45,000.
55,000 families who lost jobs or income or had damaged homes received 3
months* living expenses ($ 276 million).
14 million meals for disaster workers and survivors.
236,000 mental health counseling visits and 131,000 health service visits.
The September 11th Fund 3,500 survivors received
$20,000 each. 35,000 displaced workers and 3,000 displaced residents
received $4,000 $ 10,000 each.
343,000 meals served to rescue workers.
4.3 million pounds of food were delivered to ground zero.
20,000 people received mental health counseling and referrals, and 10,000
people received legal advice.
15,000 people who lost jobs received training, career counseling, or
placement services.
Nearly 1,000 small businesses and nonprofits received grants or loans to
help rebuild the community.
Source: Data provided by charities as of October 31, 2002, does not
include future or planned distributions.
Families of those killed on September 11 have received cash gifts from
various charities to help them through the first year of the recovery
process. McKinsey*s survey of nonuniformed World Trade Center families
showed that 98 percent of families reported receiving cash assistance
averaging $90,000 per family. 10 Because of the charities specifically
established to assist the survivors of the firefighters and police killed
in the attacks, their survivors will receive more cash assistance than
survivors of the nonuniformed people killed. A Ford Foundation study
reports that uniformed rescue workers funds have provided families of the
10 See A Study of the Ongoing Needs of People Affected by the World Trade
Center Disaster
prepared by McKinsey & Co. for 9/ 11 United Services Group (New York, NY:
June 2002). The 9/ 11 United Services group is a consortium of 13
organizations formed in December 2001 to foster a more coordinated
approach to aid delivery. This survey conducted for them is based on data
collected in April and May 2002. The figure cited does not include any
additional cash assistance families may receive from the September 11 th
Victim Compensation Fund.
Page 13 GAO- 03- 259 Charities, September 11 Role
Port Authority Police and NYC Police and Firefighters with cash benefits
of $715,000, $905, 000, and $938,000, respectively. 11
It was a change in IRS rules and subsequent legislation that enhanced the
abilities of charities to distribute aid on a per capita basis* as did
some of the charities focused on those firefighters and police killed*
rather than on the basis of more in- depth needs assessment. IRS rules
governing the uses of charitable aid were changed for September 11
survivors. Recognizing the unique circumstances caused by this tragedy and
in anticipation of congressional legislation that was subsequently passed,
IRS relaxed the burden on charities* in the case of this disaster only* to
show that the assistance provided was based on need. 12 In November 2001,
IRS issued guidance that authorized charities to make payments to
September 11 victims and their families without a specific needs test, if
made in good faith and using objective standards. Some charities and
oversight agencies we spoke with said that this placed some charities
under pressure to more quickly distribute their funds. It allowed others,
such as the International Association of Fire Fighters, to distribute
funds on a per capita basis, regardless of need, to the surviving families
of those who perished, a practice that had not been permitted prior to the
September 11 disasters.
Questions about how aid should be distributed as well as problems
identifying and serving thousands of people directly and indirectly
affected complicated charities* tasks as they moved to aid those affected
by the attacks.
11 Seessel, Tom, The Philanthropic Response to 9/ 11. Prepared by The John
S. Watson Institute for Public Policy, Thomas Edison State College for the
Ford Foundation (Trenton, N. J.: Aug. 2002).
12 The Victims of Terrorism Tax Relief Act of 2001, P. L. 107- 134, was
enacted January 23, 2002. Among other provisions, the act states that tax-
exempt charities making payments *by reason of the death, injury,
wounding, or illness of an individual incurred as the result of the
terrorist attacks against the United States on September 11, 2001, or an
attack involving anthrax occurring on or after September 11, 2001 and
before January 1, 2002,* are not required to make specific assessment of
need before giving out aid. The act also forgives for certain tax years
the tax liability of those killed in the April 19, 1995, Oklahoma City
bombing, those killed in the September 11, 2001, terrorist attacks, and
those killed in the terrorist attacks involving anthrax occurring after
September 10, 2001, and before January 1, 2002. Charities* Responses
Complicated by Questions about Use of Funds and Difficulties Reaching
Those in Need
Page 14 GAO- 03- 259 Charities, September 11 Role
Charities faced considerable debate on how their funds should be
distributed* to whom, for what, and when? Some victims* groups and
charities believe the money should be in the form of cash grants,
distributed as quickly as possible, and typically focused on families of
those killed, believing that the survivors are in the best position to
understand and deal with their individual needs. Other charities and
oversight organizations believe that needs are best met when the
charitable funds take into account a broad range of needs, including those
in the long term, and focus on services rather than cash grants. 13 For
example, Oklahoma City charities emphasized needed services rather than
cash grants.
While most of the September 11 funds have been distributed in the first
year, some charities are planning to provide services over the longer
term. The American Red Cross announced that it is setting aside $133
million to be spent over the next 3 to 5 years primarily in the areas of
mental health and uncovered health care costs. The September 11th Fund
announced that it will use its remaining $170 million over the next 5
years to also fund services such as mental health counseling, employment
assistance, health care, and legal and financial advice. In addition, the
Survivors* Fund, the largest fund set up exclusively to support the needs
of survivors of the Pentagon attack, is focusing its services on the long-
term needs of the survivors.
Since the attacks, decisions made by the American Red Cross* by far the
largest holder of funds for September 11 purposes* were the focus of much
media and congressional scrutiny, raising concerns about its plans for
funds raised. By the middle of November 2001, contributions to the
American Red Cross*s Liberty Fund reached nearly $543 million. The
American Red Cross had established the Liberty Fund to help people
affected by the September 11 attacks, its aftermath, and other terrorist
events that could occur in the near future. While American Red Cross
officials said that from early on it used its traditional language in its
fund appeals saying that funds raised would be used for *this and other
disasters,* it was widely perceived as a violation of the donors* intent
in this case. In response to concerns about the organization*s use of
funds, on
13 A recent study conducted by McKinsey & Co. for the 9/ 11 United
Services Group estimates that the cost of meeting the needs of all those
affected by September 11 in NYC will be $373 million in 2003 and $44
million in 2004. See A Study of the Ongoing Needs of People Affected by
the World Trade Center Disaster prepared by McKinsey & Co. for 9/ 11
United Services Group (New York, NY: June 2002). Different Perspectives on
Appropriate Use of Funds Complicates Distribution
Page 15 GAO- 03- 259 Charities, September 11 Role
November 14, 2001, the American Red Cross pledged that the entire Liberty
Fund would be spent to care for those directly and indirectly affected by
the September 11 attacks, their families, and the rescue workers.
Fulfillment of donor intent is an important issue, and many charities we
spoke with said that they were keeping their spending within the framework
of what they believed donors wanted: to quickly meet the needs of those
for whom aid is intended.
Representatives from philanthropic oversight organizations said charities
in general could have minimized some of the problems they faced by paying
more attention to the public relations aspects of their work. 14 This
might have reduced adverse publicity when people expected one thing and
charities did another. Problems these representatives cited include the
following:
Some charities made vague appeals for money, and the public didn*t
understand what programs these funds might support.
Victims and the needs of the survivors were too narrowly defined. Some
charities communicated a simplistic definition of those needing help as
only the survivors of those people who were killed or those who were
injured in the terrorist attacks. However, in the September 11 disasters,
thousands of others were displaced from their homes, lost their jobs, and
needed counseling to cope with post- traumatic stress disorder.
Some charities implied that all of the funds collected would go to
direct assistance without any management and administrative cost. This
created a misperception that services could be delivered without trained
professionals, administrative back offices, support staff, or personnel to
help ensure accountability in the use of the donated funds.
Charities told us that they had to make extensive efforts to identify the
people who were killed and locate their survivors, as there were no
uniform lists, and privacy issues affected the sharing of information. For
example, when the Robin Hood Foundation wanted to provide $10,000 cash
gifts to the surviving families, it found it had to develop its own list
of
14 These organizations include the Better Business Bureau*s Wise Giving
Alliance, the American Institute of Philanthropy, the Urban Institute*s
Center on Nonprofits and Philanthropy, the National Committee for
Responsive Philanthropy, the Brookings Institution, and the Ford
Foundation. Identifying and Reaching Those
in Need Posed Significant Difficulties
Page 16 GAO- 03- 259 Charities, September 11 Role
the people who were killed and contact information for their survivors.
The foundation recruited volunteers to contact World Trade Center
employers and reported having to sign 55 different confidentiality
agreements with companies, airlines, and individuals, to ensure that Robin
Hood Foundation would not share its list with other agencies. In the case
of those killed and injured at the Pentagon, confidentiality was a concern
as well. The Pentagon provided the Foundation with a list of beneficiary
names for the checks but sent a representative to New York to put the
checks in the envelopes and apply the address labels.
Charities made many efforts to reach out to hard- to- serve clients,
nonEnglish speakers, and immigrants. For example, the New York Immigration
Coalition received $800,000 from The September 11th Fund and money in
other grants to provide legal assistance, establish immigrant help desks
at each disaster center, and train charity workers on how to better reach
immigrants. The NYC Department of Health reported that 20 percent of those
killed in NYC were foreign- born, coming from 167 different countries.
Charity officials said the Immigration and Naturalization Service
facilitated their efforts to reach immigrants by announcing it would not
pursue information on the immigration status of individuals. Also, some
charities such as Windows of Hope were created to specifically serve low-
income restaurant workers with language barriers.
In spite of outreach efforts, representatives from the victims groups we
spoke with said that survivors were not aware of all charitable services
and assistance available. A recent study of dislocated hospitality-
industry workers in the Washington, D. C., region also reported that
despite the efforts to meet the needs of these workers, many still
struggled to connect with services. 15 Workers interviewed for the study
said a single source of information and referrals for emergency
assistance, job placement assistance, or job training would have been
helpful.
In addition, some people we spoke with in NYC expressed concern that many
indirectly affected survivors did not qualify for assistance because they
lived outside the geographic area below Canal Street in Manhattan, which
was initially targeted for aid by FEMA and many charities. After much
public concern about the limited geographic range of FEMA*s
15 Martha Ross, Brookings Greater Washington Research Program and Sandra
Padilla, Diane Levy, and Elizabeth Cove, The Urban Institute, Calling 211:
Enhancing the Washington Region*s Safety Net After 9/ 11 (Washington, D.
C.: Sept. 2002).
Page 17 GAO- 03- 259 Charities, September 11 Role
eligibility regulations, in August 2002, the Congress mandated FEMA to
expand its mortgage and rental assistance to employees working anywhere in
Manhattan and to those who could track job loss or loss of income to
September 11. 16 FEMA also provides this assistance to those workers whose
employers are not located in Manhattan, but who are economically dependent
on a Manhattan firm, and anyone living in Manhattan, who commuted in and
out of the island and who suffered financially because of post- September
11 disruptions.
Charities and government oversight agencies have taken a number of steps
to prevent fraud, and relatively few cases have been uncovered so far. For
example, to minimize fraud by individuals, some charities required
applicants to provide documentation certifying their needs and the
relationship of their need to the disaster. Also, some charities conducted
independent reviews of their applications and eligibility processes. State
attorneys general and local district attorneys told us that although they
had limited resources to dedicate to such efforts, they are actively
responding to public concerns about charities. Officials from these
government oversight agencies pursued investigation of fraud by
individuals and charities; most of the few cases of fraud being prosecuted
or investigated in New York relate to individuals who are charged with or
have been convicted of falsely obtaining assistance.
Different types of fraud can occur in the solicitation and delivery of
charitable funds: fraud by individuals, charities, and businesses, as
shown in table 3. Charity and oversight agency officials told us that they
employed a number of methods to prevent this fraud, as also shown in table
3. Most charities we spoke with required applicants to provide
documentation certifying identity, injury, death of a family member, or
loss of job or home, and may have asked for proof of financial need, for
example, paycheck stubs. To verify that they were adequately screening for
fraud, some charities conducted independent reviews of their eligibility
processes. State charity officials and local district attorneys typically
relied heavily on complaints from the public and on the charities
themselves to identify ineligible individuals or fraudulent charitable
16 2002 Supplemental Appropriations Act for Further Recovery From and
Response to Terrorist Attacks on the United States, P. L. 107- 206,
enacted August 2, 2002. Charities and
Oversight Agencies Have Several Accountability Measures in Place;
Relatively Few Cases of Fraud Identified So Far
A Range of Accountability Measures Are in Place to Address Different Types
of Fraud
Page 18 GAO- 03- 259 Charities, September 11 Role
groups or solicitations. 17 These officials also reached out to a number
of professional groups, including presentations to fund- raising
associations and charity boards about state guidelines on charitable
solicitation. Finally, they also issued educational press releases,
suggesting that people should examine charities before they write checks.
See appendix III for contact information for each state*s charity
oversight agency.
Table 3: Types of Fraud and Related Accountability Measures Different
types of fraud possible Accountability measures in place to prevent or
detect fraud By individual - Fraudulent claims of eligibility for a
charity*s funds or services can include
claiming survivor benefits using a false death certificate, a forged
identity, or by falsely overstating connections to a victim or
falsely representing need for job- related or housing benefits.
Charities* eligibility screening, including document checking.
Charities* internal audits of the screening process.
Police or district attorney investigations (either initiated by
charities or by law enforcement).
By group or organization (* charity*)
Solicitation of funds by those pretending to represent a charitable cause
or
using September 11 to solicit funds but using the funds raised for an
unrelated purpose.
Complaints by the general public or charity watchdogs.
Attorneys general investigations.
External audits by accounting firms.
IRS review.
Police or district attorney investigations.
By business - Cause- related marketing, or any arrangement that results in
a charity receiving a percentage of sales, can result in a charity
receiving few or no benefits.
Charities monitor media and attend to questions from the public.
State attorneys general may require submission of a contract between the
charity and the business.
Police or district attorney investigations. Source: Public and private
philanthropic oversight officials and charities.
Charities, state attorneys generals, and local district attorneys we spoke
with said that they have found relatively few cases of fraud by charities
or individuals. Charities like Safe Horizon told us that they were
developing relationships with local law enforcement and had referred a
number of suspicious cases to the police department. Furthermore,
charities* internal audits identified additional potential cases of fraud.
For example, the American Red Cross*s review identified 350 suspected
cases of fraudulent claims on its Liberty Fund, representing less than 1
percent of distributed funds. State and local oversight officials told us
that although they did not have additional resources available to address
September 11- related fraud, they are actively pursuing any fraud
identified. They reported that since September 11, they had found
relatively few cases of fraud, either by
17 We spoke with state charity officials, from state attorneys general
offices or secretary of state offices, in seven states: California,
Maryland, Massachusetts, New Jersey, New York, Pennsylvania, and Virginia.
Charities and Oversight
Agencies Reported Relatively Few Cases of Fraud
Page 19 GAO- 03- 259 Charities, September 11 Role
charities or individuals. 18 These attorneys general and state charity
officials from the seven states that suffered high numbers of casualties
from September 11 told us they are investigating a combined total of 17
suspected cases of fraudulent solicitation of funds. Local officials
indicate that they have more reports of individual fraud than charity
fraud. For example, the New York County District Attorney*s Office
reported that as of October 15, 2002, it had arrested 84 people for
individual fraud and 2 people for fraudulent solicitation of funds.
Representatives of this district attorney estimated that about $1 million
in aid has been fraudulently obtained. The following are examples of
suspected individual fraud uncovered to date by the New York County
District Attorney*s Office. 19
One man staged his own death in the Trade Center, then, posing as his
next of kin (a recently deceased brother), applied for and received over
$272, 000 from two charities.
Another NYC man reported that his 13th child had accompanied him to a
job interview at the World Trade Center and had perished in the attack.
The investigation revealed that the child never existed, a fact confirmed
by other family members. The man received $190, 867 from two charities.
A group of cafeteria employees in a building near the Trade Center were
paid for 4 days of work when their building was closed postdisaster. One
employee applied for disaster- related income replacement for those 4 days
(even though he had been paid) and received funds. This employee told his
co- workers about his success in obtaining charitable aid under pretense,
and 23 of his colleagues attempted to do the same.
A man hired 13 homeless people to help him defraud charities. He
supplied the homeless people with fraudulent documentation of job loss and
financial need, then drove them around to relief sites around the city,
where they applied for and received a total of $108,905 from charities.
18 As of October 31, 2002. 19 Although the cases mentioned here all
involve the successful receipt of money from charities, not everyone who
was charged with fraud received aid.
Page 20 GAO- 03- 259 Charities, September 11 Role
In addition, the New York State Attorney General*s Office reported
investigating approximately 20 additional cases of individual fraud, many
of which are related to individuals who allegedly attempted to obtain
false death certificates.
While information is available on identified fraud cases, the total extent
of fraud is not known and will be difficult for oversight agencies and
charities to assess. First, detection of fraud by individuals could be
challenging, despite checks being in place, as charities said they were
overwhelmed by the volume of applications for assistance and had to hire
new staff or volunteers to help them manage their relief efforts. The
potential for fraud by individuals may have increased, as the new
personnel may have been unfamiliar with the charities* eligibility
regulations and may have inappropriately distributed or denied funds.
Second, fraud detection may be particularly problematic in areas such as
cause- related marketing by businesses. For example, the executive
director of the Twin Towers Fund told us he was unaware of a record
company*s marketing campaign on the fund*s behalf, until he read about it
in the newspaper. The charity had to contact the record company, then set
up a contract to formalize the terms of the fundraising. Third, it may
also be difficult to track fund- raising by groups using September 11 to
solicit for other purposes. In one state, oversight officials told us that
an organization conducted a telemarketing drive promising that funds would
be given to *firefighters, like those who died September 11,* but no funds
went to the survivors of firefighters who died in the attacks. Oversight
agencies said that these types of organizations tended to move very
quickly in and out of geographic areas, making it difficult to find and
prosecute them.
Despite some early cooperation attempts, survivors had difficulty
accessing charitable aid. The unprecedented scope and complexity of the
September 11 disasters presented a number of challenges to charities in
their attempts to provide seamless social services for those in need of
assistance. Some months after the disaster, however, oversight agencies
and large funders worked to establish a more coordinated approach at the
September 11 attack sites. This included the formation of coordinating
entities, the implementation of case management systems, and attempts to
implement key coordination tools, such as client databases. Little
Coordination
of Charitable Aid Occurred Early on, although a More Integrated Approach
Emerged Months Later
Page 21 GAO- 03- 259 Charities, September 11 Role
Following the disasters, charitable organizations and FEMA took some
immediate steps to help survivors get assistance, including checking in
with other agencies. Charities moved quickly to collect funds, give grants
to service providers, and establish 800 numbers and Web sites with aid
information. FEMA headquarters contacted charities likely to be active in
disaster relief to discuss how FEMA contacts would be of assistance. Some
efforts at formal coordination include Family Assistance Centers and
Disaster Assistance Service Centers, where some of the larger charities
and government agencies set up booths to provide assistance to survivors
and those economically affected by the disaster. 20 The United Way of the
National Capital Area held information- sharing meetings for Washington
and Virginia service providers and the New York Community Trust did so as
well.
Despite these efforts, September 11 survivors generally believed that they
had to navigate a maze of service providers in the early months, and both
charities and those individuals who were more indirectly affected by the
disaster (e. g., by job loss) were confused about what aid might be
available. Survivors and charities told us that aid distribution was
hindered by a number of factors. First, those seeking aid had to fill out
a separate application and provide a unique set of documentation for each
charity to which they applied. Second, in the early stages post- disaster,
all survivors had to apply in person for charitable assistance, even if
they had previously obtained aid from the organization. This became
troublesome for the many survivors who did not live in metropolitan New
York or Washington. Charities like Pennsylvania September 11th Assistance
ended up paying for survivors* travel to the Liberty Park Family
Assistance Center in New Jersey. Third, over the course of the first few
weeks after the disaster, many dimensions of coordination were limited by
little information sharing between organizations helping survivors. For
example, some charities said that they were not familiar with other
organization*s rules, especially FEMA*s. Furthermore, because of privacy
laws, charities and FEMA did not share information about clients with
20 Family Assistance Centers were primarily designed to meet the needs of
the families of those killed. These centers were set up by key government
entities at each attack site, specifically, the city of New York and the
Department of Defense Office of Family Policy. Pennsylvania did not have a
Family Assistance Center, but Pennsylvania September 11th Assistance
coordinated services for families of victims of the Pennsylvania crash.
Disaster Assistance Service Centers were set up by FEMA in New York to
serve the needs of those recently displaced from their jobs as a result of
the September 11 attacks. Despite Early Charity
Response Efforts, Survivors Experienced Difficulty Accessing Aid
Page 22 GAO- 03- 259 Charities, September 11 Role
each other; as a result, in early stages of service delivery, charities
might have duplicated services to clients.
Although ways to address some of these issues have been used in the past,
the scope and complexity of the September 11 disasters presented a number
of challenges to charities in their attempts to provide seamless social
services for survivors of the disaster. In the aftermath of the Oklahoma
City bombing, charities and service providers worked together to create a
database of aid recipients, provide each recipient a case manager, and to
participate in a long- term recovery committee to better coordinate aid,
fostering a more integrated service delivery approach. The September 11
events differed in key ways that hindered a similar approach:
A much larger and more diverse number of actual and potential aid
recipients. The 168 Oklahoma City victims who were killed were a more
homogeneous population of federal government workers, while the World
Trade Center disaster alone had 2,795 victims from a number of businesses
and 167 countries. In addition, thousands more than in Oklahoma City were
indirectly affected through loss of their jobs and homes.
Numerous governmental jurisdictions. The September 11 attacks occurred
in three states, which involved multiple government entities at each site.
Larger numbers and multiple layers of funders and grantees. In addition
to existing charities that were already involved in disaster relief
services, the hundreds of new charities that emerged to provide aid to
families of those killed were involved.
Some months after the disaster, oversight agencies and large funders
worked to establish a more coordinated approach at the September 11 attack
sites. This approach included the formation of coordinating entities, the
implementation of case management systems, and attempts to implement key
coordination tools.
Several coordination efforts emerged at the disaster sites. In NYC, the
State Attorney General had encouraged charities to work together to ease
access to aid, including use of a common application form and database.
The 9/ 11 United Services Group (USG), a consortium of human service
organizations and their affiliated service coordinators, was formed in
December 2001 to foster a more coordinated approach to aid delivery. A
More Integrated
Approach Emerged Later
Page 23 GAO- 03- 259 Charities, September 11 Role
(See appendix V for a list of USG organizations participating in USG
service coordination.) Furthermore, in the spring of 2002, FEMA
successfully established long- term recovery committees in New York and
New Jersey for charities that had smaller September 11 funds than those of
USG. In Virginia, the Survivors* Fund set up a board to assess the unmet
needs of survivors and persons who were economically displaced by the
disasters. Members of this board include key area agencies, such as the
United Way and FEMA, which have historically facilitated coordination in
areas affected by disasters.
As coordination efforts progressed, some charities continued to follow
Oklahoma*s model by establishing case managers for individuals who lost
family members in the attacks. Although all the charities were familiar
with a case management model, cross- agency case management presented
challenges, as agencies* mission statements or regulations specified
different qualifications and specializations of their social workers (e.
g., Master*s degree required). Despite these challenges, USG*s service
coordinator program involves the efforts of a number of charities across
the city. If families need help, they can call the Safe Horizon hotline,
and an operator there assesses whether the clients have short- or long-
term needs, his or her geographic area, and the clients denominational or
ethnic preferences for service providers, and then connects them with a 9/
11 USG service coordinator. Coordinators are current staff of local
charities and have been trained by USG to help survivors identify and
access a broad range of services. 21 They have access to a number of
technology tools, including an automated centralized directory of benefits
and services available to families and a community website that allows
service coordinators to communicate with the entire service coordinator
community. Service coordinators, key charity managers, and the New York
FEMA Voluntary Agency Liaison also meet weekly to discuss service
provision issues. The Survivors* Fund in Virginia also set up case
managers but contracted with another agency to hire new social workers to
provide case management services to the injured and families of those
killed in the Pentagon attacks.
Agencies began to develop client databases and a common application form
for disaster relief aid. One key advantage of client databases is that the
services clients had already received could be tracked by the charities,
21 By July 2002, USG reported training 300 coordinators, 90 percent of
which are from USG charities.
Page 24 GAO- 03- 259 Charities, September 11 Role
and as such, would prevent duplication of services. Although many
charities expressed concern that their clients would lose their anonymity
by signing a confidentiality waiver, the 9/ 11 USG has established a
database of September 11 services for its service coordinators, and a
number of their member organizations are creating and using a confidential
client information database. The Survivors* Fund and United Way of the
National Capital Area have also created a client database, which is
primarily being used by these two agencies. A common application form
would improve the aid delivery process by reducing the amount of
documentation and forms clients have to provide to each agency. The common
application form is in progress in New York. The form has not been
established yet, as charities that have trained volunteers nationwide
indicated that at this time, they are not interested in retraining all
their volunteers to a new application.
Charities, government agencies, watchdog groups, and survivors*
organizations shared with us lessons that could improve the charitable aid
process in disasters in the future. These lessons include easing access to
aid, enhancing coordination among charities and between charities and
FEMA, increasing attention to public education, and planning for future
events. Some efforts are under way to address these issues. However, the
independence of charitable organizations, while one of their key
strengths, will make implementation of these lessons learned dependent on
close collaboration and agreement among these independent organizations.
Charities, government agencies, watchdog groups, and survivors*
organizations shared with us the lessons they learned from the September
11 charitable aid process that could be incorporated into the nation*s
strategies for responding to large- scale disasters in the future.
Easing access to aid for those eligible* Helping individuals in need find
out what assistance is available, and easing their access to that
assistance could be facilitated if a central, accessible source of public
and private assistance is made available to survivors. Access to
assistance could be further facilitated if charities adopted a simplified,
one- stop application process and a standard waiver of confidentiality
that would allow survivors to get access to multiple charities and allow
charities to share information on individuals served and avoid duplicative
services. While the focus of such an effort would be to facilitate
services to those in need, a one- step application process could include a
set of basic interview questions or steps designed to prevent fraud.
Another way to facilitate eligible survivors receiving assistance is by
offering each survivor a case Lessons Learned
after September 11 Could Improve Future Responses but Pose Implementation
Challenges
Lessons Learned Could Prove Valuable in the Future
Page 25 GAO- 03- 259 Charities, September 11 Role
manager, as was done in NYC and in Washington. Case managers can help to
identify gaps in service and provide assistance over the long term.
Enhancing coordination among charities and between charities and FEMA*
Private and public agencies could better assist those in need of aid by
coordinating, collaborating, sharing information with each other, and
understanding each other*s roles and responsibilities. This requires
effective working relationships with frequent contacts. Collaborative
working relationships are essential building blocks of strategies that
ease access to aid, such as a streamlined application process or the
establishment of a database of families of those killed and injured to
help charities identify service gaps and further collaboration.
Increasing attention to public education* Charities* increased attention
to public education could better inform the donor public on how their
money will be spent and the role of charities in disasters. Controversies
over donor intent could be minimized if charities took steps when
collecting funds to more clearly specify the purposes of the funds raised,
the different categories of people they plan to assist, the services they
plan to provide, and how long that assistance will be provided, as that
information becomes known.
Charities can further ensure accountability by more fully informing the
public about how their contributions are being used and providing
comprehensive information on facets of their operation to the public. The
September 11th Fund*s and the Robin Hood Foundation*s Web sites, for
example, list updated information on grants, recipients, amounts, and
purposes. Moreover, efforts such as those of the Metro New York Better
Business Bureau to compile information across multiple organizations can
help provide accountability for how funds are used. For future events, the
Ford Foundation report on the philanthropic response to September 11
suggested that *the major philanthropies should consider designating a
well- respected public figure who would provide daily media briefings on
their responses.*
Planning for future events* Planning for the role of charities in future
disasters could aid the recovery process for individuals and communities.
While disasters, victims, and survivors can vary widely, it could be
useful for charities to develop an assistance plan to inform the public
and guide the charities* fundraising efforts. In addition, state and local
efforts related to emergency preparedness could explicitly address the
role of charities and charitable aid in future events. Future plans could
also address accountability issues, including training for charitable aid
workers and law
Page 26 GAO- 03- 259 Charities, September 11 Role
enforcement officials about identifying potential fraud and handling
referrals for investigations.
While some of the lessons learned can be implemented at the individual
charity level, most require a more collaborative response among charities,
and some steps are under way to build collaborative responses. Key efforts
include the following:
The National Voluntary Organizations Active in Disaster* This
organization has 34 national member organizations, such as the American
Red Cross, The Salvation Army, and Catholic Charities USA, 52 state and
territorial organizations, and some local organizations. Established in
1970, its goal is to promote collaboration, while encouraging agencies to
respond independently but cooperatively in disasters. Since September 11,
2001, this organization has initiated information sharing meetings in NYC
and Washington, D. C., and has discussed lessons learned at its annual
meeting in March 2002. See appendix IV for a list of its members.
As part of its mission, the 9/ 11 United Services Group is planning to
develop a blueprint for the coordinated delivery of social services and
financial aid in future emergencies.
Later this year, FEMA is facilitating a meeting between a committee of
the National Voluntary Organizations Active in Disaster and the 9/ 11
United Services Group.
While some charitable organizations are taking steps to incorporate
lessons learned, they face significant challenges. By its inherent nature,
the charitable sector is comprised of independent entities responsive to
clients and donors; it is not under the direction of a unifying authority.
While in situations such as September 11 FEMA is required to coordinate
activities of certain charitable organizations, as well as others that
agree to such an arrangement, FEMA officials said that in exercising this
authority for September 11 and other events, they work closely with
charities as a facilitator, not as a leader or director. FEMA officials
noted it is important to build and maintain trust with the charitable
organizations and to be careful to give local leadership the opportunity
to lead in disasters. An externally imposed effort to direct or manage
charities, whether by FEMA or another entity, could have deleterious
effects; a key strength of charities is their ability to react flexibly
and independently in the event of disasters. Some Charitable
Organizations and FEMA Are Taking Steps to Incorporate Lessons Learned but
Face Significant Challenges
Page 27 GAO- 03- 259 Charities, September 11 Role
Overall, charitable aid made a major contribution in the nation*s response
to the September 11 attacks. Given the massive scale and unprecedented
nature of the attacks, the charities responded under very difficult
circumstances. Through the work of these charities, millions of people
have been able to contribute to the recovery effort and provide assistance
to those directly and indirectly affected by the attacks. While much has
been accomplished by charities in this disaster, lessons or strategies
have also been identified related to improving access to aid, enhancing
coordination among charities and between charities and FEMA, increasing
attention to public education, and planning for future events that could
improve future responses in disasters.
There are no easy answers as to how to incorporate strategies that may
result in a more accessible and transparent service delivery system into
any future disasters. Coordination and collaboration among charitable
organizations are clearly essential elements of these strategies, and some
organizations have taken steps in this direction. At this point in time,
an appropriate role for the federal government is to facilitate these
efforts through FEMA, the federal agency that already has relationships
with many of the key organizations involved in disaster response. This
will help to ensure that lessons learned from the September 11 attacks and
their aftermath can be incorporated into the nation*s strategies for
dealing with large- scale disasters like this in the future. At the same
time, it will help to ensure that charities may remain independent and
vital in their programs and priorities.
We are recommending that the director of FEMA convene a working group of
involved parties to take steps to implement strategies for future
disasters, building upon the lessons identified in this report and by
others to help create sustained efforts to address these issues. The
working group should address these and other issues as deemed relevant:
(1) the development and adoption of a common application form and
confidentiality agreement; (2) the establishment of databases for those
receiving aid in particular disasters; and (3) strategies for enhancing
public education regarding charitable giving in general and for large-
scale disasters in particular, including ways to enhance reporting on
funds collected and expended. This working group could include FEMA,
representatives of key charitable and voluntary organizations and
foundations; public and private philanthropic oversight groups and
agencies; and federal, state, and local emergency preparedness officials.
Conclusions
Recommendation for Executive Action
Page 28 GAO- 03- 259 Charities, September 11 Role
In commenting on a draft of this report, FEMA said that the recommendation
is a practical one that is likely to foster enhanced communication and
coordination among charitable organizations, foundation leaders, and
government emergency managers. While FEMA acknowledged the challenges of
working with a number of independent entities, it added that a working
group of involved parties, along with skillful leadership and active
participation among members, is likely to lead to important improvements
in coordination and ultimately better service to those affected by
disasters. In addition, FEMA noted that a component of the existing
National Voluntary Organizations Active in Disaster may serve as the basis
upon which to build. FEMA*s full comments are presented in appendix VI.
We also shared a draft of the report with the American Red Cross, the
Salvation Army, The September 11th Fund, the 9/ 11 United Services Group,
an official of the National Voluntary Organizations Active in Disaster,
and officials in the New York State Attorney General*s Office in New York
City and obtained their oral comments. They said the report was fair and
balanced and provided technical comments which we included where
appropriate. Regarding the recommendation, the American Red Cross
expressed some concern over whether FEMA was the right party to convene
the working group, stating that the group*s goals would be outside of
FEMA*s mission and that it would, therefore, be inappropriate to ask that
FEMA be responsible for ensuring the success of the work group. The
American Red Cross also said that the goals of the work group would more
properly fall under the purview of the nonprofit sector and that work has
already started on some of these areas.
In responding to this concern, we emphasize that our recommendation
charges FEMA with convening a working group of involved parties but does
not specify that FEMA play the leadership role or be charged with
management or oversight of the group*s progress. We agree that the key to
the success of a working group in this area will depend on the actions of
the charitable and voluntary organizations involved. We also acknowledge
that some efforts are under way, including among the American Red Cross,
Salvation Army, and the United Way, to address some of these issues.
However, we continue to think that it is appropriate for FEMA to play a
role in initiating meetings that will bring together involved parties.
This will help to ensure that sustained attention is paid to these
important issues and potentially result in improving the nation*s response
to those in need in any future disasters. Agency Comments
Page 29 GAO- 03- 259 Charities, September 11 Role
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will send copies of the report to
other interested parties. We will also make copies available upon request.
In addition, the report will be available at no charge on GAO*s Web site
at http:// www. gao. gov.
If you or your staff has any questions about this report, please contact
me at (202) 512- 7215 or Gale C. Harris, Assistant Director, at (202) 512-
7235. Kevin Kumanga and Emily Leventhal also made key contributions to
this report.
Sincerely yours, Cynthia M. Fagnoni, Managing Director Education,
Workforce, and
Income Security Issues
Appendix I: September 11th Victim Compensation Fund of 2001
Page 30 GAO- 03- 259 Charities, September 11 Role Who is eligible: Any
individual who was physically injured or the families
and beneficiaries of any individual who was killed as a result of the
terrorist- related aircraft crashes of September 11, 2001.
Payments: The average award under the September 11th Victim Compensation
Fund of 2001* before the statutorily required collateral offsets* is
projected to be more than $1.8 million per claimant. Although it is
difficult to determine the amount of collateral sources (e. g., life
insurance) each claimant will have, the Special Master who oversees the
fund believes the average payout after collateral sources will be
approximately $1.5 million per claimant. Charitable aid received by
families is not taken into account in determining award amounts.
Total estimated expenditures: Over $5 billion.
Applications: Filing deadline is December 2003. Appendix I: September 11th
Victim
Compensation Fund of 2001
Appendix II: September 11 Fund Data for 35 Large Charities
Page 31 GAO- 03- 259 Charities, September 11 Role
Relief charities Amount raised Amount
distributed Percent distributed
American Lung Association a $139,000 $63,000 45 American Red Cross Liberty
Fund 1,011,000,000 696,000,000 69 Americares Foundation 9,261,073 9,
261,073 100 Army Emergency Relief b 5,792,588 477,100 8 American Society
for the Prevention of Cruelty to Animals 1, 744,000 1, 179,000 68 Catholic
Charities of NY c 25,400,000 17,300,000 68 Catholic Charities USA
31,847,514 30,590,054 96 Citizens* Scholarship Foundation 113,167,336 1,
054,174 1 Farmers* Market Federation of NY d 162,000 162,000 100 Federal
Employee Education & Assistance Fund 5,500,000 650,000 12 International
Association of Fire Fighters 161,000,000 159,898,000 99 Jewish Federation
of Greater Washington c 450,000 400,000 89 Kiwanis International
Foundation 1, 591,916 1, 558,373 98 Lions Clubs International Foundation
3, 023,000 1, 200,000 40 National Italian American Foundation 334,000
71,500 21 Navy- Marine Corps Relief Society 6, 800,000 67,300 1 New York
Police and Fire Widows* and Children*s Benefit Fund 117,000,000 53,000,000
45 New York Times 9/ 11 Neediest Fund 61,147,017 60,583,789 99 NYC Police
Foundation 11,000,000 6, 400,000 58 New York State Fraternal Order of
Police Foundation 12,028,314 7, 200,972 60 New York State World Trade
Center Relief Fund e 68,730,000 60,355,500 88 Port Authority Police
Benevolent Association c 11,642,025 9, 988,001 86 Robin Hood Foundation
60,300,000 38,500,000 64 Rotary International 1, 800,000 1, 450,000 81
Salvation Army c 87,722,612 64,629,024 74 The September 11th Fund
512,000,000 376,000,000 73 Survivors Fund b 20,000,000 4, 300,000 22 Tides
Foundation 597,207 594,934 99 Twin Towers Fund 205,000,000 156,000,000 76
Uniformed Firefighters Association c 71,000,000 60,000,000 85 Union
Community Fund 3,092,105 2, 938,000 95 United Jewish Communities 4,800,000
4, 400,000 92 United Way National Capital 3, 956,512 3, 034,461 77 Windows
of Hope 19,000,000 8, 000,000 42 World Vision 12,428,378 11,908,215 96
Total $2,660,456,597 $1,849,194,470 70
Source: Data provided by charities, as of October 31, 2002, does not
include distributions planned for the future.
Notes: We asked the charities to exclude funds they had received from
other September 11 funds to avoid overstatement of the funds involved. In
addition, the amount of funds distributed includes funds used for
administrative purposes in some cases. Because of differences in how
charities defined and reported administrative funds, we did not break out
administrative funds.
Appendix II: September 11 Fund Data for 35 Large Charities
Appendix II: September 11 Fund Data for 35 Large Charities
Page 32 GAO- 03- 259 Charities, September 11 Role
All information as of October 31, 2002, unless noted in one of the table
notes. a As of June 25, 2002.
b As of September 30, 2002. c As of July 31, 2002. d Fund closed September
11, 2002. e This is not a charity; the New York State Department of
Taxation and Finance established and administers this fund of donations.
Appendix III: Contact Information for State Charity Officials
Page 33 GAO- 03- 259 Charities, September 11 Role
State Charity office Main telephone number In- state toll
free number
Alabama Attorney General*s Office 800- 392- 5658 Alaska Attorney General*s
Office 907- 465- 2133 Arizona Attorney General*s Office 602- 542- 5763
800- 352- 8431 Arkansas Attorney General*s Office 501- 682- 2341 800- 482-
8982 California Attorney General*s Office 916- 322- 3360 800- 952- 5225
Colorado Attorney General*s Office 303- 866- 5189 800- 222- 4444
Connecticut Attorney General*s Office 860- 808- 5318 Delaware Attorney
General*s Office 302 -577- 8600 District of Columbia Department of
Consumer and Regulatory Affairs 202- 442- 4400 Florida Department of
Agriculture and Consumer Services 850- 488- 2221 800- 435- 7352 Georgia
Secretary of State 404- 656- 2817 Hawaii Attorney General*s Office 808-
586- 2727 Idaho Attorney General*s Office 208- 334- 2424 800- 432- 3545
Illinois Attorney General*s Office 312- 814- 2595 Indiana Attorney
General*s Office 317- 232- 6330 800- 382- 5516 Iowa Attorney General*s
Office 515- 281- 5926 Kansas Attorney General*s Office 785- 296- 2215 800-
432- 2310 Kentucky Attorney General*s Office 502- 696- 5389 Lousiana
Attorney General*s Office 504- 342- 7013 Maine Attorney General*s Office
207- 626- 8800 Maryland Secretary of State 410- 974- 5534 800- 825- 4510
Massachusetts Attorney General*s Office 617- 727- 2200 Michigan Attorney
General*s Office 517- 373- 1152 Minnesota Attorney General*s Office 651-
296- 3353 800- 657- 3787 Mississippi Secretary of State 888- 236- 6167
Missouri Attorney General*s Office 573- 751- 3321 Montana Attorney
General*s Office 406- 444- 2026 Nebraska Attorney General*s Office 402-
471- 2682 Nevada Attorney General*s Office 702- 486- 3777 800- 992- 0900
New Hampshire Attorney General*s Office 603- 271- 3591 New Jersey
Department of Law 973- 504- 6215 New Mexico Attorney General*s Office 505-
827- 6060 800- 300- 2020 New York Attorney General*s Office 212- 416- 8000
North Carolina Secretary of State 919- 807- 2214 North Dakota Attorney
General*s Office 701- 328- 3404 800- 472- 2600 Ohio Attorney General*s
Office 614- 466- 4320 Oklahoma Secretary of State 405- 521- 3912 Oregon
Attorney General*s Office 503- 229- 5725 Pennsylvania Department of State
717- 783- 1720 800- 732- 0999 Rhode Island Attorney General*s Office 401-
222- 3048 South Carolina Secretary of State 803- 734- 1790 888 -242- 7484
South Dakota Attorney General*s Office 605- 773- 4400 800- 300- 1986
Appendix III: Contact Information for State Charity Officials
Appendix III: Contact Information for State Charity Officials
Page 34 GAO- 03- 259 Charities, September 11 Role
State Charity office Main telephone number In- state toll
free number
Tennessee Secretary of State 615- 741- 2555 Texas Attorney General*s
Office 512- 463- 2070 800- 621- 0508 Utah Department of Commerce 801- 530-
6601 Vermont Attorney General*s Office 802- 828 3171 Virginia Department
of Agriculture and Consumer Services 804- 786- 2042 800- 552- 9963
Washington Secretary of State 360- 753- 0863 800- 332- 4483 West Virginia
Secretary of State 304- 558- 6000 Wisconsin Attorney General*s Office 608-
266- 1221 Wyoming Attorney General*s Office 307- 777- 7841
Source: National Association of State Charity Officials Web page: http://
www. nasconet. org. Note: The offices listed in this table may be
contacted if you have questions or information related to charitable aid.
Appendix IV: Members of National Voluntary Organizations Active in
Disaster
Page 35 GAO- 03- 259 Charities, September 11 Role
The National Voluntary Organizations Active in Disaster has 34 national
member organizations as well as 52 state and territorial Voluntary
Organizations Active in Disaster.
American Baptist Men*s Ministries Adventist Community Services American
Radio Relay League American Red Cross America*s Second Harvest Ananda
Marga Universal Relief Team Catholic Charities USA Christian Disaster
Response Christian Reformed World Relief Committee Church of the Brethren
Church World Service Episcopal Relief and Development Friends Disaster
Service Humane Society of the United States International Relief
Friendship Foundation International Aid Lutheran Disaster Response
Mennonite Disaster Service National Emergency Response Team National
Organization for Victim Assistance Nazarene Disaster Response Northwest
Medical Teams International The Phoenix Society For Burn Survivors Points
of Light Foundation Presbyterian Disaster Assistance REACT International
The Salvation Army Society of St. Vincent de Paul Southern Baptist
Disaster Relief United Jewish Communities United Methodist Committee On
Relief United States Service Command Volunteers of America World Vision
Appendix IV: Members of National Voluntary
Organizations Active in Disaster
Appendix V: Organizations Participating in 9/ 11 United Services Group
Service Coordination
Page 36 GAO- 03- 259 Charities, September 11 Role
American Red Cross in Greater New York Asian American Federation of New
York
Chinese- American Planning Council Chinatown YMCA Filipino American Human
Services New York Asian Women*s Center Japanese American Social Services
Asociacion Tepeyac Black Agency Executives
Community Service Society of New York Brooklyn Bureau of Community Service
Catholic Charities of the Archdiocese of New York Catholic Charities of
Brooklyn and Queens Center for Independence of the Disabled in New York
Federation of Protestant Welfare Agencies
Lutheran Social Services of Metropolitan New York Hispanic Federation
Committee for Hispanic Children and Families Puerto Rican Family Institute
Unitas Therapeutic Community Urban Health Plan Human Services Council
Children*s Aid Society Latin American Workers Project The Legal Aid
Society of New York Mental Health Association of New York City Safe
Horizon The Salvation Army United Jewish Appeal - Federation of Jewish
Philanthropies of New York
F. E. G. S. NY F. E. G. S. Long Island Jewish Board of Family and
Children*s Services Westchester Jewish Community Services Shorefront Y
United Neighborhood Houses of New York
Forest Hills Community House Supportive Children*s Advocacy Network New
York WTC Permanency Project
Council on Adoptable Children Jewish Child Care Association Appendix V:
Organizations Participating in
9/ 11 United Services Group Service Coordination
Appendix VI: Comments from the Federal Emergency Management Agency
Page 37 GAO- 03- 259 Charities, September 11 Role
Appendix VI: Comments from the Federal Emergency Management Agency
Appendix VI: Comments from the Federal Emergency Management Agency
Page 38 GAO- 03- 259 Charities, September 11 Role (130110)
The General Accounting Office, the investigative arm of Congress, exists
to support Congress in meeting its constitutional responsibilities and to
help improve the performance and accountability of the federal government
for the American people. GAO examines the use of public funds; evaluates
federal programs and policies; and provides analyses, recommendations, and
other assistance to help Congress make informed oversight, policy, and
funding decisions. GAO*s commitment to good government is reflected in its
core values of accountability, integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO*s Web site (www. gao. gov) contains abstracts
and fulltext files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail this list to you every afternoon, go to www. gao. gov
and select *Subscribe to daily E- mail alert for newly released products*
under the GAO Reports heading.
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:
U. S. General Accounting Office 441 G Street NW, Room LM Washington, D. C.
20548
To order by Phone: Voice: (202) 512- 6000 TDD: (202) 512- 2537 Fax: (202)
512- 6061
Contact: Web site: www. gao. gov/ fraudnet/ fraudnet. htm E- mail:
fraudnet@ gao. gov Automated answering system: (800) 424- 5454 or (202)
512- 7470
Jeff Nelligan, managing director, NelliganJ@ gao. gov (202) 512- 4800 U.
S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D. C.
20548 GAO*s Mission
Obtaining Copies of GAO Reports and Testimony
Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs
Public Affairs
*** End of document. ***