After September 11, 2001, the former president and treasurer of the Uniformed Firefighter Association, acting as trustees of the Widows’ and Children’s Fund, accepted $81 million in donations to the Fund for uses that conflicted with the donors’ intent. They ignored donors’ reasonable expectation that their donations would be given exclusively to the widows, children, and families of the firefighters who died on that day. They hoarded the donations intending to establish an investment to distribute small stipends over time to the children of all firefighters who died in the line of duty. Families of single firefighters, for the most part, were initially excluded. September 11th widows received a one-time grant of $50,000, a much smaller amount than the $236,000 they should have received as their husband’s primary beneficiaries. Further, donors’ expectation that their generosity would be dispensed expeditiously was ignored.
Contrast that with what the International Association of Fire Fighters did after 9-11. They collected $210 million, and within weeks of the tragedy, began the distribution of donations in $10,000 batches. They distributed all donations to the estates of the deceased 9-11 firefighters within two years.
The behavior of the Widows’ and Children’s Fund trustees prompted the New York State attorney general to intervene on behalf of a widows’ group in 2002 to encourage the trustees to distribute their 9-11 money as donors had intended. Article 7-A of the Executive Law of the New York State Attorney General, Solicitation and Collection of Funds for Charitable Purposes, prohibited “using contributed funds for purposes inconsistent with those for which they were solicited.” The attorney general was partially successful in his attempt to persuade the trustees to dispense the 9-11 donations as they should. When the matter was resolved, about $23 million remained in the Fund, up from $1.3 million, the average of the previous three years.
Notwithstanding Article 7-A, present trustees are now investing the money in risky equity and bond markets. For a while they were doing well – now they’re not. In the fiscal year ending July 31, 2009, the Fund lost 5%. To lessen the impact of that loss on the investment portfolio, the trustees reduced payments to the Fund’s dependents by 41.5%. A small investment loss resulted in a much larger reduction in Fund services, which leads one to believe that the solvency of the investment portfolio takes precedence over services to the widows and children in the Widows’ and Children’s Fund.
The investment portfolio is now the primary source of income for the Fund, not exactly where donors of 2001 and 2002 thought their donations would end up.
Joseph J. Hehir
Review from Guidestar