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Charitable giving trends in the wake of 9/11 full of good lessons and bad

Published: Thursday, Sept. 8 2011 10:06 a.m. MDT

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Stuck at home, glued to the news coverage of the Twin Towers going down in smoke Sept. 11, 2001, David Campbell, who was, at the time, vice president for programs at New York City's Community Service Society, fretted and worried over the relief effort.

"Could the nearly inconceivable challenges be met?" he thought. "How could nonprofit organizations play an effective role in the recovery?"

The answer wasn't immediately clear, he wrote in a recent editorial for The Chronicle of Philanthropy, but over time he was pleased to realize existing nonprofit organizations adapted quickly to respond to "sharply changed circumstances" and new leaders stepped up to fill in the gaps in service. In the wake of the Sept. 11, charitable giving in America spiked, inspiring an increased fervor for giving that would continue through several subsequent disasters. A decade after the Twin Towers went down in smoke, though, many of the nonprofits Americans so generously supported have failed, according to a recent analysis by the Associated Press.

A more charitable America

Americans donated a record-breaking $2.8 billion to help the victims of 9/11, according to The Chronicle of Philanthropy. When Hurricane Katrina hit New Orleans, Americans broke records once again, donating $5.3 billion.

"September 11 was the first time there was such an outpouring for an event like that," Michael Solomon, spokesman for the Chronicle of Philanthropy, told CNN Money. "When Katrina came along, charities and donors were ready for that moment."

While Americans have a reputation for being charitable to all, they tend to be more free with their wallets when disaster hits home. Sixty-six percent of U.S. households donated to Katrina and Sept. 11 survivors, CNN Money reported. In comparison, only 30 percent of households gave to victims of the Indonesia tsunami.

"When we have the disasters right here in the U.S., there is an overwhelming response," said Dr. Una Osili, director of research for the Center on Philanthropy at Indiana University. "The majority of the households give something to the victims or the survivors."

Donations to disaster relief didn't undercut other charitable contributions, according to a recent report from the Foundation Center. About 84 percent of corporations and foundations who donated to 9/11 relief didn't reduce support of other programs.

Despite an accelerated drop in stock values following 9/11, 31 percent maintained giving levels and nearly 38 percent gave more.

Some existing nonprofits were unsure how to respond to the attacks, Campbell wrote. But many, like the Community Service Society of New York, embraced the mantra that those nonprofits that didn't get involved in disaster relief "risked irrelevance."

Close to 260 new organizations, with missions ranging from assisting ill and dying first responders to helping families of the dead, applied for expedited tax-exempt status from the Internal Revenue Service. During the first year after the attacks, they raised $679 million.

"Ten years after September 11, I remember that day and the months immediately following with enduring and deep sadness," Campbell wrote. "I manage that sadness, at least in part, with the knowledge that I was involved in a relief effort that was part of the nonprofit world at its best — with established groups all-in, making a difference right away, and new groups filling the gaps with passion, energy and resourcefulness."

Mishandled generosity?

Many of the charities that sprang up in the aftermath of the Sept. 11 attacks collected money, fulfilled their missions and closed their doors. But a 2011 Associated Press analysis revealed many of the charities that canvassed the public for funds after 9/11 may have mishandled donated funds.

One charity, for example, raised $700,000 for a giant memorial quilt that never materialized. An examination of tax filings revealed the charity's founder used donations to fund a personal $200 per week car allowance, rent reimbursement and a $45,000 payment for an unreported loan.

Another charity collected $200,000 promising to build a "9/11 Garden of Forgiveness" at the World Trade Center site. There is no garden. Tax records show the founder paid himself a $126,530 salary and spent $3,563 on "dining expenses."

"There are those (charities) that spent huge sums on themselves, those that cannot account for the money they received, those that have few results to show for their spending and those that have yet to file required income tax returns," wrote David B. Caruso of The Associated Press. "Yet many of the charities continue to raise money in the name of Sept. 11."

Officials in Arizona and New York have launched investigations into some of the charities indicated in The Associated Press analysis, the Huffington Post reported. In the meantime, other 9/11 charities — most of which conduct themselves ethically — have experienced some "9/11 fatigue" when it comes to raising money for projects. Jennifer Adams, chief executive of the Tribute WTC Visitor Center in downtown Manhattan, told The Wall Street Journal she has heard potential donors remark, "Aren't we over that, aren't we done with that?"

Groups like hers hope to capitalize on the 10-year-anniversary to rally donors around their missions.

"If you're not doing OK this year, next year is going to be sort of bleak," said Terry Sears, executive director of the non-profit Tuesday's Children.

Industry experts told The Wall Street Journal it will likely take another decade "to get to the point where Americans wake up on Sept. 11 and know instinctively that it's a day of service."

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