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AP IMPACT: Many charities formed after 9/11 raised big dollars, but didn't deliver on promises

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NEW YORK, N.Y. - Americans eager to give after the 9/11 terrorist attacks poured $1.5 billion into hundreds of charities established to serve the victims, their families and their memories. But a decade later, an Associated Press investigation shows that many of those nonprofits have failed miserably.

There are those that spent huge sums on themselves, those that cannot account for the money they received, those that have few results to show for their spending and those that have yet to file required income tax returns. Yet many of the charities continue to raise money in the name of Sept. 11.

One charity raised more than $700,000 for a giant memorial quilt, but there is no quilt. Another raised more than $4 million to help victims, but didn't account publicly for how it spent all of the money. A third helps support a 9/11 flag sold by the founder's for-profit company.

There are other charities that can account for practically every penny raised — except that all the money went to pay for fundraising, and not the intended mission.

To be sure, most of the 325 charities identified by the AP followed the rules, accounted fully for their expenditures and closed after fulfilling identified goals.

There have been charities to assist ill and dying first responders, to help families of the dead, to help survivors and to honour the memory of victims. And there are charities that revolve around the flag, patriotism, motorcycle rallies and memorials of all sizes and shapes.

But in virtually every category of 9/11 non-profit, an AP analysis of tax documents and other official records uncovered schemes beset with shady dealings, questionable expenses and dubious intentions. Many of those still raising money are small, founded by people with no experience running a non-profit.

The Arizona-based charity that raised $713,000 for a 9/11 memorial quilt promised it would be big enough to cover 25 football fields, but there are only several hundred decorated sheets packed in boxes at a storage unit.

One-third of the money raised went to the charity's founder and relatives, according to tax records and interviews.

Those records show founder Kevin Held also spent more than $170,000 on travel since 2004. He rarely travelled without his two Alaskan Malamute dogs, one at 120 pounds (54 kilograms) and the other 200 pounds (90 kilograms). He also listed $36,691 in credit card and bank charges since 2005 and $10,460 for an expense listed as "petty" in 2009.

The chairman of the board, an 84-year-old Roman Catholic priest, says he didn't know he was chairman and thought that only small amounts of money had been raised. He says he was unaware that the founder had given himself a $200 per week car allowance, rent reimbursement and a $45,000 payment for an unreported loan.

Held acknowledges he struggled managing the charity's finances, but he said he didn't live off the non-profit. "If I made a mistake, I made a mistake. If I did, then crucify me. I never said I was a professional at this."

There's a charity for a 9/11 Garden of Forgiveness at the World Trade Center site — only there's no Garden of Forgiveness. The Rev. Lyndon Harris, who founded the Sacred City non-profit in 2005, spent the months following 9/11 at ground zero helping victims, relatives and first responders. He said he formed the charity to fulfil "our sacred oath" to build the garden. Tax records show the charity has raised $200,000, and that the Episcopal priest paid himself $126,530 in salary and used another $3,562 for dining expenses between 2005 and 2007.

Harris said he sees his charity's work as a success even if there is no garden at the site. "I saw our mission as teaching about forgiveness," he said.

Another Manhattan 9/11 charity, Urban Life Ministries, raised more than $4 million to help victims and first responders. But the group only accounted for about $670,000 on its tax forms. Along with almost four dozen other 9/11 charities, Urban Life lost its IRS tax-exempt status this year because it failed to show how money was collected and spent.

The charity's creator, the Rev. Carl Keyes, an Assemblies of God minister, acknowledged that the non-profit did not file taxes for all years.

He has not responded to AP's requests to explain how the money raised was spent; some of the information he did provide conflicted with the 2001 return.

Keyes did say he knows his charity has not filed all the required disclosures but added that he hopes the non-profit's efforts in response to 9/11 and and later work after Hurricane Katrina wouldn't be tainted by his lack of accounting.

"You're going to beat me up in an article because we're bad managers?" Keyes said.

The Flag of Honor Fund, a Connecticut charity, raised nearly $140,000 to promote a memorial flag honouring 9/11 victims. The flag, which contains the name of every person killed on Sept. 11, 2001, is on sale today at Wal-Mart and other retail stores. But only a tiny fraction of the money from those sales goes to 9/11 charities, with most going to retail stores, the flag maker and a for-profit business — run by the man who created the flag charity.

The AP examined charities that received tax-exempt status from the Internal Revenue Service by promising to serve victims of the 9/11 tragedy, build memorials or do other charitable works in honour of the dead. The charities were identified using data maintained by Guidestar, a private database of nonprofits that the IRS recommends.

The $1.5 billion donated to these charities was in addition to the billions spent by Congress and states and established nonprofits like the Red Cross.

Most of the 9/11 charities fulfilled their missions, but the AP analysis found dozens that struggled, fell short of their promises or did more to help their founders than those affected by the terrorist attacks.

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The AP National Investigative Team can be reached at investigate(at)ap.org

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Follow Brett Blackledge on Twitter at http://twitter.com/brettblackledge

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