9/11 Donations: Did They Reach the Right People?

Sept. 12, 2005 -- -- With millions of dollars going to charities in the wake of Hurricane Katrina, ABC News followed up on the donations pledged after Sept. 11 to see if the funds reached their intended beneficiaries.

"The track record was really one of stupendous success," said New York Attorney General Eliott Spitzer.

Of the $2.4 billion raised after Sept. 11, $8 out of every $10 has been paid out to families of the victims. Most of the remaining money is being held in reserves.

"A lot of people gave to scholarship funds and a lot of kids who are beneficiaries," said Stacy Palmer of the Chronicle of Philanthropy. "They're not going to colleges for years and years."

Although the Sept. 11 charities were an overall success, that success was preceded by several months of chaos.

"The victims initially had been met by a need to apply separately to every individual charity, which was very frustrating for them. It was very time consuming, burdensome," Spitzer said. "What we created was one application form, which would permit them to apply to all the different charities simultaneously."

The attorney general said aggressive enforcement held charity scams and fraudulent claims for survivor benefits to a minimum.

There was also a problem with the American Red Cross, which was putting 9/11 donations into its general operating fund.

"There was some serious criticism in Congress and elsewhere about how they dealt with the money, that they weren't really straight with contributors," Palmer said.

The Red Cross changed its leadership at the top and now has a different policy in place.

"If they ask for the money to be designated to Katrina, we would designate it to a Katrina fund," said Mary Elcano of the Red Cross.