Relief funds established to aid individuals affected by last year's attacks took a conservative approach in investing the assets, using primarily short-term, liquid investments.
More than $2 billion has been raised for relief efforts and nearly half of that has been distributed, according to a survey by the Chronicle of Philanthropy.
"We've taken a very conservative approach," said Larry Levy, president of the Twin Towers Fund, which raised $180 million and has distributed $155 million. "We're operating under the idea that this money is a trust for the victims' families, and that we cannot lose a penny."
The fund, established by former New York Mayor Rudolph Giuliani, raised $180 million for families of police officers, firefighters and other New York City personnel killed in the terrorist attacks. Of that, $25 million remains to be distributed later this year and into 2003.
The money has been invested with J.P. Morgan Chase & Co., New York, which has offered its services free of fees, Mr. Levy said. The assets are, or have been, invested one of three ways: an interest-generating checking account; a money market fund backed by collateralized bonds; and in Treasury bills. The goal is to get the money out quickly to those who need it. "We're not here to have the money sit in banks and gain interest," said Mr. Levy. "We want to get the money to the families as soon as possible."
The Families of Freedom Scholarship Fund, sponsored by the Citizens Scholarship Foundation of America, Minneapolis, has a longer-term focus than the other Sept. 11 relief funds. The fund was established to provide college scholarships for surviving family members of all the terrorist attack victims, including airplane crew members and passengers as well as those killed at the World Trade Center and the Pentagon. The fund has raised $97 million and distributed $400,000 in scholarships to 72 students, said Barbara Arnold, CSFA spokeswoman.
Assets are managed internally and are invested in government bonds maturing in one to three years, said Fred Vogel, executive vice president at CSFA. The organization's investment committee is formulating a long-term investment policy for the fund and intends to hire outside investment managers down the road, said Mr. Vogel.
Included in the $97 million figure is $20 million from the Citigroup Relief Fund, established by the financial services firm, also to provide scholarships. Earlier this year, Citigroup set up an alliance with CSFA to streamline administration and distribution of the fund. The Citigroup assets are managed separately, by Citigroup, and are invested in "safe and liquid instruments," including bonds, Treasuries and certificates of deposit, said Christina Pretto, Citigroup spokes- woman.
John Keightley, vice president for development and communication at Catholic Charities USA, Alexandria, Va., said its Disaster Relief Fund was invested in bonds and money markets. Of the $31 million raised, $22 million has been distributed. Prudential Financial, Newark, N.J., is the investment manager.
About $200 million of the $501 million raised by the September 11th Fund - established by the New York Community Trust and the United Way of New York - has been set aside in an ongoing recovery program. That money is being managed internally in cash or short-term fixed-income investments until it's distributed, said Jeanine Moss, spokeswoman.
$116 million raised
The New York Police & Fire Widows' and Children's Benefit Fund Inc., New York, has raised $116 million for families of New York City police officers, firefighters, emergency workers and port authority officers killed during the rescue efforts. The $64 million that has not been distributed has been placed in escrow and will be distributed over the next seven years for long-term needs, said Dave Golush, chief operating officer of the fund. Assets are in Treasury bonds with seven-year durations, he said.
The roughly $400 million remaining in the Liberty Fund, established by the American Red Cross, Washington, is invested in an account established strictly for 9/11 relief called the Liberty Treasury Securities Fund, said Ricia Ballas, American Red Cross spokeswoman. All of the assets are invested in U.S. Treasury bills, she said. The money is handled by several external investment managers, but Ms. Ballas would not disclose their names.