The Charity Olympics

Whether it was intended to help the homeless or cure cancer, donating money to charity before Sept. 11 was a form of absolution. Letters came in, people wrote checks, and they felt better. Since then, more than $1 billion has been pledged and $631 million collected to aid those affected by the terrorist attacks. In addition to being the largest in American history, the philanthropic effort also marks the first time in recent memory that Americans donated not as a way out but a way in. While estimates of those in need of direct relief range from 10,000 to 25,000, the entire nation was wounded; people gave not till it hurt but because they hurt. Now, justifiably, they want to know: Where is that money going?

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As of last Friday, $153 million had been handed out, $61 million in direct aid to families. But those figures only begin to tell the story. Individually, a few charities have thrived by finding a specific need and working feverishly toward meeting it. But as a whole, the relief effort--composed of 190 charities--has too often resembled a straggling army of compassion, bogged down by the obstinacy of the American Red Cross, a lack of focus by other charities and general confusion about how to reach out to those in need.

Starting on Sept. 12, folks ranging from Eliot Spitzer, the attorney general of New York, to Nancy Anthony, executive director of the Oklahoma City Community Foundation, urged all agencies participating in the relief effort to coordinate their work using a simple computer database. Spitzer said the database would help eliminate fraud; Anthony, who oversaw the Oklahoma City bombing relief effort, noted that "a database deals with the potential fraud issue, but it also allows someone to go in and say, 'Who hasn't been served yet?' People are very different in their responses to tragedy. Some reach out immediately for assistance, others become very withdrawn. They'll sit at home and go broke or crazy before they'll reach out."

Most charities instantly agreed that databasing was logical. The significant holdout was the American Red Cross. Dr. Bernadine Healy cited a strict organizational policy against sharing victim information because of privacy concerns. Spitzer countered that the database would be overseen by an independent accounting firm, not a government agency, and would be confidential. Healy wouldn't budge, and last Friday she was forced out by her own board.

Healy's stubbornness on databasing was not the only controversy. Within philanthropic circles, there were questions about whether an organization that, by congressional charter, is the lead immediate disaster-relief agency was equipped to offer the extended victim assistance that was likely to mark the secondary phase of the relief effort. Fund raising was an issue too. On Sept. 12, Healy taped her ubiquitous "Together, we can save a life" public-service announcement requesting blood and money for the Red Cross's newly established Liberty Fund. The PSAs were spectacularly successful; $505 million rolled into the organizational coffers, about half the total relief-effort sum, and an immeasurable amount of blood was given as well. But experts questioned the wisdom of calling for mass blood donation when the attacks had left astoundingly few blood recipients. (Indeed, last week the Red Cross announced that 10% of the red blood cells collected on Sept. 11 and 12 had expired.) By early October, local Red Cross chapters wondered if the national aggressive Liberty Fund campaign was costing them at the grass roots. A letter sent by the CEO of the Denver Red Cross chapter to a top national official, obtained by the Chronicle of Philanthropy, asked, "How much money can we 'take' before the well dries up?"

When the Red Cross finally released an itemized spending plan for the first $300 million in the Liberty Fund on Oct. 12, less than 50% of the money raised was targeted for victims of Sept. 11, their families or rescue workers. The rest was destined to help the Red Cross improve its own organization and "expand into new programs of aid" that might arise from future terrorism. But donors expected their money to be helping now, and some New York officials were considering blasting Healy over this publicly. They didn't need to. Last Friday, in a defiant farewell, she announced her retirement. "I had no choice," she said, volunteering the information that the organization's board had pushed her out.

With Healy's abdication, the Red Cross is expected to finalize an agreement with Spitzer this week that will make the agency full partners in an independently overseen charity database. (It will also shift the tone of its PSA campaign from fund raising to thanking the American people and explaining the goals of the Liberty Fund.) By following the example of Oklahoma City, many charity officials believe the database could be made even more effective if it were coupled with a critical second step: the assignment of a caseworker to each person seeking aid.