The reminders of the bake sales, the tag days and the Las Vegas night at the church hall are mostly gone, but Kaye Malozzi has held on to one significant keepsake from her year as a volunteer fundraiser: a letter from the Illinois attorney general telling her she is not a crook.
The four-page letter, sent to Malozzi in August 1994, informed the longtime Mt. Greenwood resident and mother of four that the money she helped raise for 19-year-old quadriplegic Michael Doherty had been properly spent.
“We have concluded our investigation of this matter,” it stated.
For Malozzi, who clashed with the Doherty family and members of the community over how a portion of the money should be spent, charitable deeds lost some of their virtue.
“No good deed goes unpunished,” said Malozzi, who helped raise $70,000 for Doherty after he was injured in a car wreck. “I was punished, and for what I don’t know.”
That the attorney general would be called in to probe the nickels, dimes and dollars collected for a young man facing life in a wheelchair seems almost as sad as the accident itself.
But as the public has become accustomed to pleas for donations following widely publicized tragedies–most recently the beatings in Chicago of “Girl X” and Lenard Clark–the reality is that such fund drives often trigger a confusing and sometimes contentious series of events, state officials say.
It’s a common response to a widely publicized tragedy: A stranger sits down and dashes off a check or sends along some cash to a newly formed entity such as the “Girl X Fund.”
The details of what happens to the money generally fade from public view when one tragedy is replaced by another. And behind the scenes, another drama often unfolds that casts a different light on what began as a show of compassion and kindness.
Who controls the money and how it should be spent are two of the most prominent issues surrounding many funds set up for victims. In many cases, state laws don’t help much because they remain vague and contradictory.
Other complicating factors arise when the victims are public aid recipients, as in the cases of Girl X, the 10-year-old who survived a horrific attack, and Lenard, who was severely beaten in a racially motivated incident.
The key questions: Can other family members benefit from the fund? And how can victims use the funds without jeopardizing their state benefits, which are critical to maintaining medical care?
Floyd Perkins, bureau chief of the attorney general’s charitable trust division, said the people who set up funds–responding in haste to a crisis–often fail to spell out to donors precisely how the money will be spent and by whom.
In the case of Girl X, the two who raised money independently even have different ideas about how it should be spent.
Marv Dyson, president of radio station WGCI, said he would like to spend a portion of the $330,000 raised by his station to help Girl X’s mother, 26-year-old Belinda, get an education and become self-sufficient.
He also is willing to use $60,000 to $80,000 to purchase a new home for the family, because, he said, the three-bedroom scattered-site house provided by the Chicago Housing Authority is inadequate for Girl X and her three siblings.
Beverly Reed, the activist who raised some $250,000, is adamant that all the money she raised be used to pay for Girl X’s long-term medical needs.
She has encountered difficulty administering the fund, she said, because she and Girl X’s mother are no longer speaking and Reed has not been allowed to visit the child in recent months. The disagreement between the two apparently centers, in part, on how the fund is being handled.
The rift has hampered Reed’s efforts to effectively spend the money she raised because she has limited information about what Girl X needs.
Girl X’s case is further complicated because she will be living most of the time in a state facility and attending a public school, both of which are required by law to provide much of her medical care and therapy.
Reed said she is now considering holding the money in an interest-bearing account until Girl X is no longer under her mother’s guardianship.
“The only thing we are interested in supporting is Girl X and her needs,” Reed said. “Her needs are so extensive that there wouldn’t be much left to do anything else.”
So far, neither fund has spent anything.
Public aid complications
The public aid issue is one reason for the delay. Since the cost of medical care is likely to soar into the millions during the lifetimes of Girl X and Lenard, officials said, it is important that the trust funds do not imperil the families’ public aid benefits.
The trust funds are intended to supplement their care by providing services that the state will not pay for, such as housing, some specialized equipment, transportation and home nursing care, said Howard Burke, an attorney from the Illinois public guardian’s office who was asked to set up the trust for Lenard and the WGCI Girl X fund.
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In the WGCI fund, Burke said he is considering establishing two separate trusts, one for Girl X and one for her mother, to maintain the family’s eligibility for public aid.
“If the mom is going to be serving as the primary caregiver . . . then it is reasonable that some funds be applied to help,” Burke said. “On the other hand, the money wasn’t donated to help the mom get off welfare. It was to help meet the needs of Girl X.
“We understand that the family will have some residual benefits, but the difficulty we face is how far outside that circle we should go.”
In order to guard against fraud, Burke said he is preparing a legal trust document that will have specific written instructions on how the trustees should disburse the money and guard against individuals being allowed to decide what qualifies as a reasonable expense.
Reed has not prepared such a document, but she has established a committee of professional and community representatives who will make recommendations to the board of WordSongs, her organization to assist women who have been sexually assaulted.
Reed and the WordSongs vice president will sign all checks.
The Lenard Clark Fund is unusual because the City of Chicago helped establish it.
Some $150,000 raised during a breakfast co-sponsored by Mayor Richard Daley is temporarily being held in the city’s Department of Aging and Disabilities not-for-profit account, according to Sarah Pang, first deputy chief of staff for the mayor’s office.
The attorneys who are involved in setting up the fund have not decided on a bank to administer the fund, according to city officials.
Lenard has returned home and is making progress in his recovery.
`Gray areas’ in state law
State law sends a contradictory message to those who set up funds. Perkins said “gray areas” in state law allow people to set up funds without registering with his office.
Unlike such organizations as United Way and other charities, which must file extensive reports about how they spend money, a fund set up to help a victim requires virtually no paperwork.
The money collected could even be kept in a shoebox.
“It’s irrelevant how you hold the funds,” Perkins said. “The key is . . . what promises were made to the donors and what they were told the money would be used for.”
Though federal law is silent about funds set up for individuals–the Internal Revenue Service deems that a private matter, Perkins said–two Illinois laws provide sometimes-contradictory regulation.
One of the laws, the Solicitation Act, provides rules for collecting money for a charitable purpose but does not require a fund to be registered if it benefits only one person, Perkins said.
The other law, which establishes the guidelines about what to do with the money once it is collected, says practically the opposite: Everyone must register.
Registration, Perkins said, tells the state and the public who controls the funds, as well as their purpose, and offers a summary of how the money is used.
As a practical matter, most funds don’t register, and state officials don’t have the manpower to monitor all the funds that are created. Perkins said he “has no idea” how many funds like those for Girl X or Lenard are out there.
“There’s just no way to know,” he said.
The office does send out letters when it becomes aware that a trust may have been established, but “it’s a hit-or-miss kind of thing,” Perkins said.
Indeed, only one of about two dozen funds written about in the Tribune during the past five years has been registered with attorney general’s office.
And signing up with the attorney general does not necessarily insulate a fund against controversy.
Funds without guidelines
The fund for the 1958 Our Lady of Angels fire, which killed 92 schoolchildren, was established to pay for medical expenses and victims.
Donations poured in from around the world, and in 1970, the fund was converted into a trust account with the First National Bank of Chicago and contained nearly $700,000. The fund also registered with the Illinois attorney general.
But questions arose when records revealed that one of the victims had submitted medical claims totaling $581,021 from 1985 to March 1994.
The man, who received only $6,440 from the fund from the time of the fire to 1980, collected some $320,612 from 1990 to 1993.
According to attorneys involved with the fund, the fund made payments to 22 different doctors, 27 hospitals and clinics and eight different drugstores during a two-year period.
The victim, who was 9 at the time of the accident, needed extensive surgery and has been treated for psychiatric problems stemming from the fire, according to fund records.
Fund administrators said the medical expenses were justified–an assertion that Perkins and the attorney general’s office do not challenge.
But, Perkins notes, “I’m not sure all the people who gave to that fund and created it thought it would all go to psychiatrists.”
Perkins said that the trust lacked the kinds of guidelines that might have allowed the money to help more people.
“There was no limit per person because nobody thought about it,” he said.
In the rush to help those affected by disease or disaster, the founders of a fund rarely formalize controls over money.
That creates the potential for misunderstandings like those arising from the fund established for the victims of the Lake Grove Village apartment fire.
In the weeks following the Jan. 18, 1996, fire that swept through the apartments at 3555 S. Cottage Grove Ave., killing four, U.S. Rep. Bobby Rush (D-Ill.) set up a fund for the survivors.
Buta year and a half after the fire, the thousands of dollars that have been collected to help survivors move on with their lives are sitting in an account in a South Side bank.
Sharon Smith, 40, whose son Dana was killed in the blaze, has made it something of a personal cause to know why the funds have yet to be distributed.
“If you’re going to do it,” Smith said of the money that has been collected, “get it over with. Do whatever is right. Don’t have people sitting there asking when are you going to do it.”
Rush apparently agrees. Bess Bezirgan, a spokesman for the congressman, said he would like the funds disbursed.
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“He doesn’t believe the money should be sitting in a bank,” Bezirgan said.
Bezirgan said Rush has intentionally removed himself from administering the funds. That task, she said, has fallen to a committee to oversee distributing the money. All parties, she said, want to ensure the money is properly handled.
For Smith, a receptionist at a downtown hotel, it has taken too long.
Where the money goes
In the fund set up for Michael Doherty, Malozzi wasn’t criticized for holding the purse strings too tightly.
Indeed, the fund spent money on everything from nursing to redecorating Doherty’s room. But when Doherty unexpectedly died after the last fundraiser, Malozzi found herself in a fight over how to spend the remaining $23,000.
It was a fight that split the neighborhood and the local parish, Queen of Martyrs, where both Doherty and Malozzi were parishioners.
Malozzi, who did consult a lawyer and did register the fund with the attorney general at the outset, contends that the money was intended only for Michael’s needs and balked at handing the money over to the family.
Members of the Doherty family could not be reached for comment, but Malozzi said the fund was established “just for the boy.”
Rev. William Gubbins, then-pastor of Queen of Martyrs, agreed. “This (fund) was specifically for the medical needs of Michael Doherty.”
Gubbins said the day Doherty died, another parishioner–who had no idea that Doherty had passed away–came to him with a problem. Gubbins recalled that the woman wanted her disabled child to attend the church’s school. But without making the second floor accessible, she would have to send her child elsewhere.
“I thought it was providential,” Gubbins said.
So Gubbins told Malozzi about the need, and she agreed that the remaining money should purchase a specialized lift.
“I thought about it and I felt that the people of this area, the people who go to church at Queen of Martyrs, they’ve all donated money, so why not put it back into something that they could see where the money went?” Malozzi said.
But Malozzi’s decision apparently angered the family as well as members of the community.
Malozzi said the Doherty family no longer speaks to her on the street, and there were whispers that Malozzi had mishandled the funds, prompting the attorney general’s office to take a look at her.
She was cleared of any wrongdoing, but the experience left a bitter taste.
“I wish somebody could do me a favor if I needed it,” she said. “If, God forbid, something happened to one of my children–I would kiss their feet. But it doesn’t always end up that way.”