Who really gets your money? In the aftermath of September 11, Americans donated $1.3 billion to charities. But it's still unclear who will benefit from your cash. How can you protect your donation the next time you decide to give? (Consumer Empowerment).

"I'M SORRY," APOLOGIZES DEBRA JOHNSON, AS SHE SOBS UNCONTROLLABLY. "Every time I think that he's not coming back, I can't stop crying. I'm supposed to be strong for the kids.

"I cry every night," she continues, "praying that he will come back. I just want my family to be one again." On September 11, Johnson, a first-grade teacher in the Bronx, New York, lost David Williams, the father of her two children and her partner for more than 15 years. Williams, 34, was an engineer at the American Business Maintenance Co. in Building Two of the World Trade Center. "He was kind, trustworthy, and a good father," Johnson, 34, laments. He was also naturally funny, and enjoyed local celebrity as "Dog Face," the stand-up comedian. "David and several of his co-workers actually made it out of the building. But he ran back in to turn off a machine he thought might blow, causing more harm. That's the type of man he was."

Johnson, however, feels that her mate's heroic deed has been dashed--lost in the smoldering heap of ash and debris we now call Ground Zero. "I feel like you have to be a fireman's widow to get someone to listen to you." In applying for aid, Johnson has received only $3,000 to date, from the organization Safe Horizons, to assist with basic living expenses. She has been frustrated and angered by the amount of red tape that never clearly communicates the criteria for aid, shuttles victims from desk to desk, organization to organization, and points to useless voicemails, e-mails, and Websites.

"I get turned off with all the questions and forms," she says, "I just leave it alone."

In the aftermath of September 11, scores of organizations solicited for charitable donations, and Americans of every race and creed showed compassion and unity by donating $1.3 billion in record time. The expectation of the donors was that charities receiving the funds would disburse the money to needy victims just as quickly. Instead, public feuds erupted over both the charities' and the U.S. government's handling of the distribution of funds.

Such developments have led many consumers to reassess their level of commitment to charitable giving, and charities have come under greater scrutiny as the nation heals from the loss of an estimated 4,500 lives and billions of dollars in property and business damage. Are charities doing enough to help the victims and the nation recover? Or did they use the tragedy as a "business opportunity" to profit from the overwhelming generosity of sympathetic donors? We've polled the experts to evaluate the effectiveness of these various efforts and offer tips on how you can assess other solicitors in the future.

A QUESTION OF CONSCIENCE

No doubt, the grand scale of the recent terrorist attacks presented a huge task for charity solicitors. "The problem is that we have no historical precedence to guide us," observes Rick Cohen, president of the National Committee for Responsive Philanthropy, a philanthropic watchdog group. "But things could have been handled differently." Cohen suggests that perhaps a potentially comparable situation to September 11 was the Oklahoma City bombing, when intense fundraising also took place. "Those charity groups, however, all sat around the table to decide how to approach the situation. I guess they couldn't find a big enough table in New York.

"They were so concerned about raising money and boasting, they weren't doing enough to educate the donors about the kinds of help and the layers of help that would be needed. The accent should be on the people," Cohen suggests. It clearly was not.

Consumer watchdog groups, New York Attorney General Elliot Spitzer, and members of Congress have questioned the fund-raising ethics, spending, disbursements, and application procedures of charities that solicited funds for victims of the September 11 attacks. One very vocal critic is Daniel Borochoff, president of the American Institute of Philanthropy (www.charitywatch.org). "Money came in so quickly, charities didn't have a budget or plan to best handle it," he explains. "But there has been such poor management and a lack of public accountability, some of which I believe was also self-serving."

Borochoff's ire is largely intended for the United Way, whose September 11th Fund and September 11 Telethon raised $337 million in pledges; and the American Red Cross Liberty Fund, whose coffers held more than $604 million. He believes these organizations diverted funds to other relief concerns and had no real budget or plan for disbursement. The Bed Cross was one of several charities that came under heavy fire from Congress, which charged that it misled the American public about how donations would be used. In October, the Red Cross announced it would not accept any more donations on behalf of the September 11 tragedy, instead it would direct additional monies collected toward general relief. But many feel the organization's credibility has been damaged.

"They were not forthright," asserts Borochoff. "They should not have accepted funds after $300 million. They clearly intended not to use the [additional $304 million] for these families." Borochoff is referring to Bed Cross' intention to only use $320 million for victims' families of September 11, but continued petitioning and advertising for money after they had met their fund-raising goal.

Cohen concurs, but says many other charities failed the public, too. "Too much of their efforts focused on fund-raising, instead of the mechanism of service delivery," he says. "In charitable activity, people get carried away with big numbers and the attitude is, `Look how much money we've raised.' The boast should be, `We've helped this many families.'"

AIDING THOSE WHO NEED IT

Yuvonka Peters delayed applying for aid. Had she followed her instincts, Peters would have stayed home on September 11. "I didn't plan to go to work," she recalls. "I woke up late and had a terrible stomachache. And when I did get up, I couldn't find my clothes." But at her mother's urging, she hustled to get out of the house in time to board the 7:20 a.m. Staten Island ferry she caught every morning to Manhattan. She worked as an assistant office manager for Deutsche Bank, located at 130 Liberty Street, a building with connecting walkways to the doomed World Trade Center.

Peters was fortunate to escape physical harm during the attack on New York's financial district, but, for weeks after, she experienced nightmares. She lived a real-life nightmare, too--she lost her job. "Deutsche Bank just could not facilitate all of its 4,000 employees after losing its offices downtown, and I was contracted to them through an agency," Peters explains. "It was easier for them to let me go."

Peters felt so blessed to have survived the ordeal, she never thought to ask for financial support until her employment agency insisted she apply for unemployment. It was a friend who encouraged her to apply for relief aid.

"I felt guilty applying for aid," says Peters, who eventually qualified for and received roughly $2,000 for living expenses, such as food, mortgage, and utilities, from the Bed Cross and Safe Horizon.

Many have not been as successful as Peters, so consumers must be prepared to confront the charities and relief organizations they contribute to and make them mind their missions.

CHECKING OUT CHARITIES

When office mates passed the hat for the September 11th Fund, Lillie Downs gave $1,000 immediately. A visual information specialist for the Defense Intelligence Agency at the Pentagon in Arlington, Virginia, Downs was running late on that infamous Tuesday. While in her car, on the way to work, she listened to the Tom Joyner Morning Show report on events at the World Trade Center when an unusually low-flying airliner roared directly above her.

"By the time I got to the gate [at work], I was told that a plane had struck the Pentagon," recalls Downs. "A chill ran through me because I knew it was the same plane that flew over my head." Seven of her colleagues were lost in the attack and five others hurt. "I gave right away--with no hesitation--to two separate organizations," says Downs.

While emotional reasons moved Downs to give right away, consumers should use the following checklist to make sure charities are using their donations responsibly:

* Know to whom you are giving. A cause may have several organizations soliciting on its behalf, notes Pat Read, vice president of public affairs for Independent Sector, a coalition of national volunteer and philanthropic organizations. Make sure you're donating to the organization of your choice. Request written information from the charity. This should include: the organization's mission statement, board of directors, supporters and beneficiaries, as well as the latest annual report and audited financial statements if possible. You can research many organizations at www.networkforgood.org, where donations can also be made online.

* Avoid cash contributions. Never give cash and avoid giving your credit card number or other financial information over the telephone. Make your check payable to the charity, not the person taking up the collection.

* Specify who should benefit. Write on your check where you want your donation to go. "If you don't," stresses Read, "it goes into a general fund, and you're saying that you want your money to go where you feel it will be needed the most."

* Check for legitimacy. For an objective opinion on a charity, contact the BBB Wise Giving Alliance or your state attorney general's office. Also, order an initial free copy of the BBB Wise Giving Guide by calling 800-575-4483 or log on to www.give.org. In addition, send $3 to the American Institute of Philanthropy, 4905 Del Ray Ave., Suite 300, Bethesda, MD 20814, for its quarterly publication, Charity Eating and Watchdog Report.

* Check the distribution of funds. Find out how the organization divides its donations. Depending on the size of the charity, expect 5% to 50% of donations to go toward administrative costs. "That's what it takes to run an efficient and responsible charity," Read explains. Oftentimes, an organization will use corporate donations to cover administrative costs so that public donations can be used for aid, as is the case with combined funds, such as the September 11th Fund.

* Get a receipt. After you donate, you should receive information explaining what your donation will be used for, and what portion of your donation is tax deductible.

* File complaints. If you're not satisfied with a charity, file a complaint with the state charity official, which is usually the attorney general or an appointee in the state's Department of Agriculture. (Years ago, the only non-profit organizations were in agriculture.) You can also file complaints with the BBB Wise Giving Alliance in Alexandria, Virginia, at 703-276-0100.

THE RIGHT APPROACH

Radio talk show host Tom Joyner and author, commentator, and advocate Tavis Smiley (who each have individual foundations) decided to team up to establish the Tavis Smiley Foundation/BlackAmericaWeb Relief Fund to help African Americans, who they felt would be hardest hit.

"We had never done a relief effort before, and there were many process questions: Who's going to count the money? How is it going to be distributed? Bank accounts, credit card donations," Smiley recalls. "But before we got started, we had to decide how we were going to be different from other relief funds? We were going to get the money to the people as quickly as it came in. As soon as the money comes in, we send it out."

Joyner and Smiley opened up a merchant account with $10,000 each, in personal donations. An outpouring of support from listeners, who sent whatever they could, followed. "I continually stress the point that it's not about equal giving, it's about equal sacrifice," says Smiley. "We didn't want people to feel that if they couldn't contribute large amounts of money, their contributions wouldn't be appreciated. Most of our contributions were about $20 to $50."

They received donations from corporations and celebrities, as well--one anonymous gift totaled $52,000. The Coca-Cola Foundation, headed by Ingrid Saunders Jones, gave $100,000 in matched donations. The fund raised more than $600,000. "And we were not going to give out cash," notes Smiley. "We were going to pay needs directly to the providers: tuition, car notes, child care establishments."

The organization also posted verified stories and diaries of victims and their families on BlackAmericaWeb.com daily. Donors could read about victims and give directly to the fund, or directly to an individual.

That's the reason patent and trademark attorney Darcell Walker donated to the Smiley-Joyner fund. "They made a conscious effort to let you know who was getting the money and what it was going toward," says Walker, 43. "They made it more personal. With the Website, they put faces behind who was getting the money."

Walker didn't contribute right away, even though he wanted to. As smart consumers should, he weighed his options carefully. He explains that he was going to give to the Red Cross, but the story of a woman who lost three siblings in the World Trade Center found on BlackAmericaWeb.com changed his mind. He wrote a check for $1,100 on October 3, to help the woman who had taken her siblings' children into her household, multiplying her living costs dramatically.

The United Negro College Fund (UNCF) also made sure it lived up to its mission--without collecting a single donation. Instead of asking for money, it launched the UNCF Liberty Scholarship Program, which offers full scholarships to children accepted to UNCF schools whose parents were killed or permanently disabled because of the attacks. The scholarships are available regardless of race.

"Our donors have been very generous to us over the years, and so we found it unnecessary to ask for any more money," says William H. Gray III, president and CEO of UNCF. "We called on the presidents of our 39 member colleges and universities and they are in full cooperation. We have also urged other colleges and universities to do the same."

In fact, UNCF has already granted three scholarships: two went to Tiffany and Yolanda Smith, freshmen twins at Johnson C. Smith University in Charlotte, North Carolina, who lost their father, firefighter Leon Smith Jr., and one to Vernessa Richard, a senior, also at Smith, who lost her father, fire Capt. Vernon Richard.

"The first thing we did was scour our colleges to see if any of our students had been affected. It turns out that these three young ladies attended the same school," Gray says. He estimates roughly 6,000 children, ranging from 1-week-old to college age, could qualify for a scholarship from now through the next 20 years.

Making sure that everyone qualified to receive aid from charities actually receives it is a tall order. But if charities create processes that intimidate victims such as Johnson from ever applying for aid, they are doing a disservice to all. Consumers can use this tragedy to determine how they want charities to respond to those in need, and then continue to support those charities that perform well, and educate those that don't with letters of concern.

PROTECTING YOUR INTERESTS

Charitable giving should be regarded as any other consumer purchase. "In this case, you're buying charity," says Cohen. "Your attitude should be to make sure that you're buying what you want."

Walker points out, "As somebody who is donating money, you want to make sure that the people getting the money are going to do with it what they are supposed to."

--Additional reporting by Monique R. Brown

TALLY OF LARGEST SEPTEMBER 11 FUNDS

   FUND         SOLICITORS     RAISED    BENEFICIARIES      DISBURSED

The Liberty     The American   $604      Those indivi-      $172.8
Fund            Red Cross      million   duals affected     million *
                                         by the September
                                         11 tragedy

The September   United Way     $187      Nonprofit          $39.5
11th Fund       and New York   million   organizations      million *
                Community                that provide
                Trust                    services to
                                         victims and
                                         communities
                                         affected

September 11    Under          $150      Victims and        $23
Telethon Fund   September      million   families           million *
                11th Fund                affected

The Twin        The City of    $50.3     Families of        $0
Towers Fund     New York       million   firefighters,
                and the New              police and other
                York City                uniformed
                Public/                  personnel
                Private
                Initiatives

The New York    7 social       $45       Individuals        $13,650,150
Times           services       million   (civilian and      to 23
911 Neediest    and 3                    rescue workers)    organi-
                foundations              and communities    zations **
                representing
                the uniform
                services

The New York    Uniformed      $40       Widows and         $10,000
Police &        Firefighters   million   children of        each to: **
Fire Widows'    Association,             firefighters and   343 firemen
& Childrens'    Patrolmen's              police officers    37 Port
Benefit Fund    Benevolent               killed in the      Authority
                Association              line of duty       Policemen
                                                            23 NYC
                                                            Policemen
                                                            3 EMT's
                                                            3 Court
                                                            Officers

New York        New York       $36.5     Dependents of      800 checks,
State World     State          million   deceased victims   $5,000
Trade Center                             and families       each **
Disaster                                 of uniformed
Relief Fund                              personnel and
                                         civilians

SOURCE: B.E. RESEARCH

* AS OF NOVEMBER 30, 2001

** AS OF NOVEMBER 29, 2001