Hurricane Fund Led by Former Presidents Is ‘Work in Progress’

The Bush-Clinton Katrina Fund, a new charity created by former Presidents George H.W. Bush and Bill Clinton days after the August hurricane hit the Gulf Coast, has made its first grants. But the fund faces questions about how its money will be spent — including its support of religious groups and the possibility that politics might influence its grant making.

The organization raised nearly $106-million, more than all but three of the charitable organizations raising money for Katrina. The American Red Cross has raised $1.98-billion, the Salvation Army more than $295-million, and Catholic Charities USA $137.8-million of the nearly $3-billion total that has been donated to hurricane-recovery work.

The Bush-Clinton organization sent a total of $3.4-million last month to four colleges damaged by the hurricane, and it expects to distribute roughly $18-million more to 30 higher-education institutions by the end of this month.

But the fund’s other grant programs — $20-million set aside to help churches in the Gulf region, and $40-million to be split among three new grant-making groups established by the governors of Alabama, Louisiana, and Mississippi — are not nearly as far along. And plans for the remainder of the fund’s money are unclear.

“We know what our priorities are; we have the right team working; and we have good dialogue going on in the region,” says Alexis Herman, a former U.S. secretary of labor, who, along with Don Evans, a former commerce secretary, is co-trustee of the Bush-Clinton Katrina Fund. “But, yes, we are still a work in progress. We still have important decisions to make about just how we can make the most difference in the region.”

Vague Statements

The odd political duo of Mr. Bush and Mr. Clinton first established their fund-raising partnership at the request of President George W. Bush in response to the South Asian tsunamis, raising millions of dollars for that disaster. In that case, however, the money was directed to existing charities and relief efforts rather than being pooled in a new organization.

When the two men created their new fund in September, questions arose almost immediately about where the money would go and who would be in charge.

The only information about the fund at the time — from its press release and on its Web site — was that it was intended to “fill in the gaps in unmet needs” in the Gulf region, and serve as an “umbrella” for the three special governors’ funds.

It was not until three months later that board members were publicly named and plans for the three pots of grant money — one for the governors’ funds, one for colleges, and one for churches — were announced.

At that point, too, an office was opened in donated space in Washington, and an interim president, Carol Kellermann, came aboard. Ms. Kellermann had succeeded Joshua Gotbaum as chief executive officer of the September 11th Fund, which raised and distributed more than $500-million following the terrorist attacks.

The initial lack of information about the Bush-Clinton Katrina Fund didn’t stop donors from contributing.

The organization quickly raised $105.8-million, attracting both huge contributions from corporations and foreign governments and thousands of small gifts from individual Americans.

The fund’s two biggest donors: the government of Kuwait, which contributed $25-million, and Wal-Mart, which has pledged $23-million.

Other big gifts include nearly $5-million from the Alberta Lottery Fund, in Canada, and $1-million each from three American companies: Abbott Laboratories, Altria, and Qualcomm. An estimated 58,000 individuals gave a total of roughly $24-million.

Contributions to the Bush-Clinton Katrina Fund have now slowed to a trickle, according to Ms. Kellermann, and no more fund-raising activities are planned. She says the organization expects to finish the bulk of its grant making by the end of June, and will probably stay in business for at least another year after that to monitor spending and report on its progress.

Such public accountability is key to protecting, or, perhaps, restoring, the organization’s reputation, observers say. Some critics say that it took the Bush-Clinton Katrina Fund too long to share information about its leaders and spending plans, and that its mission still appears vague.

“People need quick turnaround on stewardship; there is less patience than ever before,” says Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University, in Indianapolis. “What the fund needs to do as quickly as possible now is to publish reports on how it is giving away the money, how their intermediaries are giving it away, and what the money is doing.”

Three New Groups

Not much is known about the three new groups established by the state governors — the Emergency Relief Fund, in Alabama, the Louisiana Disaster Recovery Foundation, and the Mississippi Hurricane Recovery Fund — that the Bush-Clinton Katrina Fund says are its chief collaborators.

Without a track record, and with the Louisiana group the only one that has so far made any grants itself, the three new organizations are facing questions of their own.

Charity officials in the region wonder, for example, whether the Mississippi organization, with its entire governing board made up of local bankers, will be an effective grant maker.

They also worry that the groups could be infected by state politics, or be unfairly used to pay for projects that ought to be supported by government money.

Ms. Kellermann says the Bush-Clinton Katrina Fund does not want to duplicate or supplant government spending.

As for keeping politics out of the mix, she says that her organization will make sure that the three state groups have established some distance from their governors, and that they have independent boards.

“It is part of our job as a professional staff to make sure that they are not political, that our money to them has nothing to do with politics, and that they spend it on the kinds of areas, organizations, and projects that we have specified along with them,” Ms. Kellermann says.

Concerns have been raised, too, about the proposed grants to churches.

Some observers say that it was not made known from the start that the Bush-Clinton Katrina Fund would support religious congregations, a move that could upset donors.

“Not everyone wants to fund faith-based organizations,” says Daniel Borochoff, president of the American Institute of Philanthropy, a charity watchdog in Chicago. “Some corporations even have policies to support only secular causes. The problem here was that they asked for money before they had a plan.”

Ms. Herman and Ms. Kellermann each say that, while the organization may not have specifically stated its intent to help churches before the December announcement, it was always an obvious part of the fund’s mission. They say that President George W. Bush talked about his desire to support religious groups when he called his father and Mr. Clinton to the White House to begin their fund-raising campaign.

The Bush-Clinton Katrina Fund asked two big-name ministers, William H. Gray III, a former member of Congress, and T.D. Jakes, a prominent television preacher, to help decide how to assist religious congregations that were damaged by the storm.

Mr. Gray and Mr. Jakes created an Interfaith Advisory Board and held a gathering in New Orleans last month, where more than 1,000 clergy members spoke about or submitted written accounts of their congregations’ needs.

“We’re not a bunch of ministers sitting in a conference room in New York deciding where the money will go,” says Mr. Gray, who is also a former president of the United Negro College Fund. “We want to know if this church needs money for construction, or if that minister needs help locating and reaching out to congregants.”

According to Ms. Herman, who started on the job in October, the former presidents were very involved in the organization right after it was formed, clarifying its priorities and overseeing the creation of its board and plans.

Now, she says, she expects Mr. Bush and Mr. Clinton to be advised on at least a monthly basis of the organization’s work.

“They take very seriously their oversight and their accountability,” Ms. Herman says of the former presidents. “They will do their utmost to honor the public trust they were given on this.”

For some observers, though, the former presidents have something extra to prove, given their decision to create a new organization, which carries administrative costs and could add another level of bureaucracy to grant-making in the region.

“There are big, national organizations with experience in responding to disasters, and plenty of local organizations that have experience in the region,” says Peter Flaherty, president of the National Legal and Policy Center, a group in Falls Church, Va., that promotes ethics in public life and monitors philanthropy. “What does this fund offer that’s different or better than what’s already out there?”

John G. Davies, chief executive officer of the Baton Rouge Area Community Foundation, says he appreciates that the former presidents raised awareness and money through their efforts, but he wishes they had stuck with the approach they used after the tsunamis.

“They could have vetted some local organizations and then said, Here are some great local folks who are doing effective work but who are short on resources. Let’s send your money right down there.”

Ms. Herman says that the scale of the domestic disaster is what led Mr. Bush and Mr. Clinton to put their name on a brand-new charity: “They felt a responsibility to be personally involved, personally connected.”

Caroline Preston contributed to this article.