Fast track to nowhere: few 9/11 groups still in operation.

Five years later, a study by The NonProfit Times has found that more than one-third of the organizations that received fast-tracked approval by the Internal Revenue Service (IRS) can't be located and are assumed to have ceased operations. Another 38 organizations are known to have closed their doors.

Only 23 of those located were still operational and 18 of the organizations identified by the IRS as having been fast-tracked were actually already in operation or not necessarily related to the terror attacks. For example, the Shanksville Volunteer Fire Department, which is two miles away from the crash site of Flight 93 in western Pennsylvania, responded to the crash and allowed its firehouse to be used as headquarters for rescue workers and investigators. It did receive money from various sources after September 11, but it did no fundraising and was in fact incorporated in 1951.

In 125 cases during the NPT investigation, contact was made with the lawyer who signed the federal documents or someone simply answered the telephone with a "hello." In those cases messages were left and not returned.

The NonProfit Times requested from the IRS the Filing information for organizations that were fast-tracked by the federal agency that oversees charitable operations. The IRS provided a disc titled "Expedited EO Disaster Relief Application Cases," with 303 files. Reporters and editors of The NonProfit Times then set out to find the organizations via telephone, email, Web searches and in-person visits. They found:

* 303 nonprofits are listed by the IRS on its files of organizations receiving expedited 501(c)(3) approval after September 11,2001;

* 38 of those organizations have ceased operations, as reported to The NonProfit Times by individuals knowledgeable about them;

* 23 of the 303 organizations are still in operation, although they might have altered or expanded their mission since 2001;

* 99 organizations could not be reached by telephone (in some cases with a follow-up email). The NonProfit Times sent a letter to each one of those organizations;

* Of those 99 letters, 28 were returned by the U.S. Postal Service as undeliverable, and 71 were never returned. Of those 71, one organization called in response to the letter;

* 18 organizations included by the IRS on the list had nothing to do with September 11 or added it to their missions because it happened at the time when they were being formed;

* 125 were presumed reached by telephone but did not return messages. It is only presumed that they were reached because the telephones were not answered with the name of the organizations or a message was left for the attorney who filed the organization's paperwork.

The IRS declined to provide a spokesperson for interview but did provide a written statement in response to NPT questions. The IRS responded through its media relations office that its Exempt Organizations Examinations office established a Review of Operations Unit to follow groups that the IRS believes might not operate properly, or in the case of newly approved groups, that it believes should be monitored.

The statement went on to read: "With respect to charitable organizations involved in providing relief as a result of the September 11th terrorist attacks, our Exempt Organizations Examinations office initiated a project to identify all organizations that were formed pursuant to 9/11 as well as to identify any pre-existing organizations that were involved in fundraising for the purpose of providing relief to the victims and their families. A group of agents and managers reviewed all filed returns for the identified organizations and selected approximately 200 returns, representing approximately 95 organizations, for examination to ensure that prohibited private benefit did not occur through the disbursement of funds. To date, we have completed examinations of 173 returns representing 89 organizations. We have not found significant private benefit issues."

Required to file

Exempt organizations that are required to file an annual information return are required to file a final return if they cease to exist. According to the IRS, "If an organization ceases to operate, it would report this change in activities in its annual information return. Certain organizations are not required to file an annual information return. For example, churches, charities that are other than private foundations with gross receipts that are $25,000 or less, and certain affiliates of government are not required to file an annual information return. While organizations that are not required to file an annual information return are not required to notify the IRS if they cease to exist or cease operations, they are encouraged to inform the IRS of this change so that our records can be updated."

Speaking on background, a source familiar with IRS operations said that if organizations apply for exempt status but never do anything, they eventually just fall off the IRS radar screen. The IRS audits fewer than 1 percent of charities every year and most of those are initiated because of complaints.

Despite the current political posturing in Congress and in some states regarding charity oversight in general, fraud seems not to have been a major problem with September 11-related efforts. In the first-year anniversary story in The NonProfit Times, for example, the New York State Attorney General's charities bureau was reported to have opened only six full-fledged investigations into charities associated with September 11, and received approximately 25 complaints from individuals. Most of those complaints resulted in no punitive action being taken. That same issue also reported that two-thirds of people polled who had contributed to September 11 causes said they were satisfied their money was used properly.

There are many who believe that the federal government is overzealous in its attacks on the sector's credibility. "As I understand it, some were concerned that of approximately 300 organizations that received expedited approval by the IRS shortly after 9/11, many would turn out to be fraudulent and that the failure of the IRS to provide the proper oversight would be damaging to the donating public and to nonprofits in general. It seems now that these concerns were exaggerated," said Geoffrey W. Peters, pro-bono general counsel, American Charities for Reasonable Fundraising Regulation.

"While the organizations may have been formed with the best of intentions, it seems apparent that some were very small and never had much in the way of resources, nor were they terribly effective at raising funds. They thus had short lives and went out of business. Apparently, they didn't defraud anyone nor did they do any damage. They simply could not compete in the marketplace for charitable dollars," said Peters.

And, said Peters, it's not as if the states weren't looking for problems. "(New York Attorney General) Eliot Spitzer's office, no shrinking violet when it comes to finding alleged charity fraud under every rock, found little worth investigating or prosecuting. The IRS examined 89 organizations and found no 'significant private benefit issues.' So it appears that simply good will and ethical behavior accompanied by self-regulation prevented wholesale fraud amongst these newly minted charities while some larger well-heeled charities got a lot of criticism over their conduct," said Peters.

It's simply difficult to track small charities with limited resources, said Peters. "It's not something that's really peculiar to the 9/11 group but peculiar to the fact that small nonprofits that are under $25,000 don't have to make a report. The best way to find them is not through the IRS but through the state, because when you incorporate a charity, it doesn't form under federal law, it forms under state law," he said. "When they stop filing with the state, the state suspends their ability to operate in the state."

An example of not being able to raise money or completing it mission is George Carter. He founded Fight for Freedom in Sand Springs, Okla., to combat terrorism, but he raised slightly more than $5,000, almost all of that contributed by Carter himself. Another organization, Spirit of Hope Foundation, was started by Bill Clark of Orem, Utah. Clark flew over the World Trade Center site and took pictures that he hoped to sell as a fundraising tool. Clark's aircraft got off the ground, but the organization did not. Clark said he neither collected nor distributed any money.

In addition to entities that sought formal IRS recognition, some groups already in existence as nonprofit organizations formed ad hoc partnerships with existing organizations or created vehicles such as scholarship funds.

For example, The New York Community Trust and the United Way of New York City partnered to form The September 11th Fund. The Fund was created to address the immediate and long-term needs of businesses and individuals affected by the attacks. It collected and distributed $534 million, mostly through grants. The Fund completed its mission and dissolved in December, 2004.

The Mark R. McGinly Memorial Scholarship was started by William C. McGinly, president and CEO of the Association for Healthcare Philanthropy, and his wife Patty after their son Mark, 26, was killed at the World Trade Center. It is still in operation, but this will be the fifth and final year of a golf tournament held to raise funds for the scholarship.

Five years after the horrors of September 11, 2001, World Cares Center continues to run the community centers that emerged from its response to the terrorist attacks. Tuesday's Children, based in New York City, continues its ongoing effort to provide support to the loved ones of those who lost their lives.

World Cares Center operates two September Space community centers, both in New York. Founder and Executive Director Lisa Orloff began as a September 11 volunteer, working at the Jacob Javits Convention Center on Manhattan's West Side before moving to the World Trade Center site. One of the things Orloff and others noticed was that survivors, rescue workers and the relatives and friends of victims needed respite sites. From that came the first September Space, a 4,800-square-foot haven in Midtown Manhattan. The center offers a variety of programs aimed at health and healing for mind, body and spirit, including classes in yoga and relaxation techniques. There are career workshops, town hall meetings and peer-to-peer counseling sessions.

Orloff said that World Cares Center Inc. also was able to operate in a sort of umbrella role, supporting or housing other programs. "Some organizations couldn't get a lot of funding, but they didn't have to get funding for space because we were providing the space," Orloff said. "They didn't have to get a Web site because we provided one."

Much of what World Cares does is an ongoing process of learning, as well as helping and healing. "During 9/11, people from places like Kosovo and Oklahoma City came to help us, give us a supporting shoulder," Orloff said. "The psychosocial effect of a disaster is that the community feels disempowered. But being part of a recovery effort gives them a sense of control and becomes part of the healing process," Orloff said. This approach is wrapped in a package of self care, involving the community.

The organization's reach extended to aid for Hurricane Katrina, initially by helping those people who had fled to New York from the hurricane-ravaged area. In addition, it is working with people in Baton Rouge, La., for something modeled on September Space.

One year ago, a second September Space location was opened near the site of the World Trade Center. The Lower Manhattan Community Center will focus on the local population who lived through the September 11 attacks and are now witnessing the rebuilding and relocating efforts.

Another organization that has evolved is the one originally formed as the Todd M. Beamer Memorial Foundation. It was created by Lisa Beamer to honor her husband, who is credited with organizing the passenger response to hijackers of Flight 93. The organization is now called Heroic Choices and is a youth services organization operating out of Princeton, N.J., that helps children who have experienced trauma. Lisa Beamer, who is a trustee of Heroic Choices, continues to live in Cranbury, N.J., with her two sons and daughter and serves on the governing board of the Princeton Alliance Church in Plainsboro, N.J.

World Cares and Heroic Choices are typical of many post-September 11 relief organizations, in that they expanded or altered their focus to include other types of tragedy. This is allowed under IRS regulations as long as the new activities are consistent with the organization's exempt status.

One organization that has stayed very close to its original aim, a focus on the families of September 11 attack victims, is Tuesday's Children, founded by Chris Burke, an employee of Cantor Fitzgerald & Co., which had its headquarters in the World Trade Center. Burke lost many friends and his younger brother Tom in the attacks.

"Given the nature of the attacks, many agencies didn't know how to respond," said Terry Sears, executive director of Tuesday's Children, who has been with the organization since its inception. "Many people called 1-800 numbers, but they may have gotten someone reading off a script. When something like that happens, you're shocked, traumatized, and in need of help right away."

Sears said that Tuesday's Children began registering families of attack victims, going to support groups or groups meeting in homes and telling them what the organization was planning.

Tuesday's Children involved having a plan and a template in place rather than a free-flowing operation. Based on the premise that a healthy mom equals a healthy family, it worked to help surviving spouses cope and get them into personal health wellness.

"And I think families responded because we dropped everything for family members," Sears said. "For example, we would have groceries delivered because sometimes they couldn't get themselves out of bed."

Although many people think that most survivors of September 11 trauma have been able to move on, Sears said that is not the case. "We find ourselves much in the same position (as five years ago)," she said. Families still feel very deeply their loss five years later.

"In the summer of 2005 we conducted a survey with 350 of our September 11 family members (out of more than 1,000). Of the surveys that came back, results were very, very significant in terms of mental health for September 11 family members."

According to Sears:

* 64 percent had clinical depression;

* 56 percent experienced anxiety levels that would be considered significant; and,

* Two-thirds of morns experienced significant sadness and loneliness. Those rates of depression are four times that of the national norm--15.8 percent nationally and 64.8 percent for this group.

"Last year we provided services to 5,000 members and expect program participation to increase by 20 percent this year," Sears said, adding that Tuesday's Children expects to see decreasing numbers in areas such as mental health and wellness but growing numbers in financial management and career guidance.

Further, Sears pointed out that the organization's wish to help widows does not blind it to the plight of the victims' children. "The average age of 9/11 children at the time was 8, so they are now 12," she said. "We just initiated our First Steps (in conjunction with the New York University Child Studies Center) for the children who are now 4 1/2 to 9."

Sears said approximately 110 children were born to September 11-affected families in the days immediately following.

"Those children are just really aging into our program," she said. "What we've done for them is allow them to get to know other kids who have experienced the same loss. I mean, they know why they're there. You don't have to remind them. And there's a comfort about that.

"And the beauty of it is we tried to stem the notion of us being an organization that just does events, and now we have to remind people that we have events."

Children also continue to be aided by the Windows of Hope Family Relief Fund, which helps families of employees at Windows on the World, the restaurant whose home was in the World Trade Center.

Executive Director Darlene Dwyer said the charity's promise of five years of health care coverage will finish this December, but it will continue its education fund "until the littlest child is through university." Almost 260 people among the 120 families have taken advantage of the fund to help pay for parochial or private school for kids and college for adults and children, as well as English as a Second Language (ESL) courses for others.

Windows of Hope still maintains about $6.9 million of the $23 million it raised to be used for its education fund, and has reduced the number of case managers from five to one. The fund is no longer actively fundraising but continues to accept donations.

Ironically, Cantor Fitzgerald, the company that employed Chris and Tom Burke, was connected to one of the nonprofits that could not be contacted by telephone and that did not respond to a letter, The Cantor Fitzgerald Relief Fund. This was one of several nonprofit organizations that were formed by a for-profit company because many employees of the company were lost in the attacks.

Another relief organization, The Ronald Kloepfer Children's Fund, was named after the New York City police officer who started the New York City police lacrosse league. He was killed as a result of the attacks. The organization, started by Michael Kloepfer, Ronald's brother, holds a golf outing each year to raise scholarship funds, awarding two scholarships a year. The organization was planning a special outing to mark five years.