GAO Report on Charity Response to Sept. 11 Released

On September 3, 2002, the General Accounting Office released an interim report on the response of charities to 9/11. The report describes the roles that charities played during the aftermath of 9/11 and identifies some ways to improve the charitable aid process in future disasters. The report concludes that improvement “may prove challenging to implement.” Sen. Charles Grassley (R-IA), the ranking minority of the Finance Committee, asked GAO to determine: (a) how much money was donated to charities as a result of 9/11; (b) what accountability measures were in place to insure that the money went for purposes it was supposed to; (c) what coordination efforts resulted after 9/11; and (d) any lessons to be learned. GAO noted that it is difficult to “precisely tally” the amount of money raised, but said that 34 of the larger charities raised $2.4 billion, with the American Red Cross raising the most, $988 million, and the next largest, the September 11th Fund, raising $503 million. GAO indicated that more money has been raised, but that it could not provide a reliable figure because there were more than 300 charities involved in collecting funds for 9/11 survivors. GAO’s study focused ont 34 groups. GAO also noted that it did not audit the amount collected by the 34 groups, so could not attest to the $2.4 billion figure. Of the estimated $2.4 billion, roughly two-thirds has been distributed for aid. The American Red Cross, for example, has distributed $590 million or roughly 60%, and the September 11th Fund $333 million or 66%. There was a broad range of assistance provided by the groups. Some of the money was distributed through cash grants or scholarships, and some was given through services. Some went to the families of those killed or injured, and some went to those indirectly affected, such as those who lost jobs or homes. This diversity is one reason GAO found uneven distribution rates of the funds raised. For example, the Citizens’ Scholarship Foundation raised $97 million, but has distributed only $400,000, less than one percent, since the money was raised for scholarships. GAO was told by charities and oversight agencies that there were “relatively few cases of fraud.” GAO described accountability measures in place to address fraud by individuals, nonprofit organizations, and businesses. The interim report, however, focused mainly on individual fraud. GAO notes that initially there was little coordination among the charities, but that it improved. For example, the 9/11 United Services Group that formed in December, 2001 has a shared database that charities can use. But this coordination poses many challenges, not the least is the privacy of people and families receiving aid.
back to Blog