Some money raised for Red Cross' fund set up after attacks to go to long-term plans

Tuesday, October 30th 2001, 12:00 am
By: News On 6

NEW YORK (AP) _ More than a half-billion dollars have been pledged to an American Red Cross fund set up specifically for terrorism victims, but officials now acknowledge that some of the money will spent on broad-based needs instead.

No date has been set to close the Liberty Fund, which has received about $550 million in pledges since Sept. 11. The latest available figures from Oct. 19 show that $356 million has been collected so far and $121.3 million spent.

Donations to the Red Cross typically go into its Disaster Relief Fund, a general account designed to meet emergencies of all types. But soon after the Sept. 11 attacks, Red Cross President Bernadine Healy created the Liberty Fund as a special account targeted for victims of the attacks.

Creating the account was viewed as an unusual step by philanthropic watchdogs, who are careful to note the Red Cross meets high standards overall.

Daniel Borochoff, president of the American Institute of Philanthropy, a watchdog group based in Bethesda, Md. said by establishing the fund, the Red Cross may have created unrealistic expectations that all donations would go directly to the terrorism victims.

``We've begun to receive inquiries from the public raising questions about the distributions of 9-11 funds,'' said Bennett Weiner, a spokesman for the Better Business Bureau Wise Giving Alliance, in Arlington, Va. ``I think the public certainly expects the 9-11 relief organizations to follow through'' by helping the victims of the attacks.

Red Cross spokesman Mitch Hibbs said the organization is doing the best it considering the size of the relief undertaking.

``It takes a lot of money to do a lot of work. We believe very much that we are honoring donor intent,'' Hibbs said. ``Yes, we are helping the families, but we're also helping everyone else.''

Of the $550 million pledged so far, the Red Cross expects to spend more than $300 million over the next several months on disaster relief related to the attacks.

Of that $300 million, $100 million has been set aside for providing victims' families with money to help cover immediate expenses, and $100 million for services, such as meals, shelter, counseling, child-care and relocation assistance, in New York City, Washington, Pennsylvania and other sites.

Other Liberty Fund spending decisions have raised questions, including $50 million for a blood readiness and reserve program that would increase the group's blood inventory from two or three days to 10 days, and $26 million in nationwide community outreach.

Hibbs said an additional $29 million would be spent on relief infrastructure, including telecommunications, information systems, database management, contribution processing and other overhead costs.

Disputes between Healy and members of the Red Cross board of directors over creation of the account and the uses of the money were among the issues that led to her resignation on Friday.

``I strongly oppose commingling of the monies with any other Red Cross disaster funds. Reasonable people can differ,'' Healy said last week.

Borochoff said the Red Cross still receives an ``A'' rating from his group but needs to be more specific with plans for the money it has raised since the tragedy, rather than appearing to use the crisis ``as a way to get money for more general purposes.''