Private funds for disaster victims raise questions

Good intentions can sometimes lead to a big mess

From Correspondent Jeff Flock

CHICAGO (CNN) -- It's the best of human nature -- people who hear about the victims of a tragic fire or a horrible accident or a senseless crime and decide to open up their hearts and their pocketbooks.

Millions of people chip into the private funds established for victims of high-profile disasters. But does the help always end up helping in the way the donor intends?

CNN's Jeff Flock reports 2 min., 14 sec. VXtreme streaming video

The question is being increasingly raised because there are no federal laws, and often ambiguous state laws, governing these funds. And sometimes, good intentions can wind up in a big mess.

Take the case of Girl X, a young girl who was assaulted and left for dead in a Chicago public housing project. Radio station executive Marv Dyson raised $360,000, and another fund-raising effort raised more than $200,000.

But the organizer of the second fund no longer speaks to Girl X's mother, and the money remains idle. Dyson's fund only recently disbursed its first check.

"We wished for a lot of money and we got a lot of money," Dyson said. "Now that we've got the money, we have to sit down and say, 'OK guys, now what?'"

Two years after the bombing of the Alfred P. Murrah Federal Building in Oklahoma City, more than $8 million remains in funds set up to help the victims and their families. There have been disputes over paying for case workers and for college educations for victims' children.

On the other hand, authorities are worried about doing anything that might discourage sorely needed donations. And there are clearly cases where the money proves a godsend for a victim of fate.

John Thompson falls into that category. In 1992, the North Dakota teen lost his limbs when he was swallowed up by a piece of farm equipment.

The money contributed by strangers and friends paid for bills for his limbs to be reattached. He now lives on what generosity remains.

Even regional events can bring a stream of donations. A dramatic 1996 apartment fire in Chicago resulted in $15,000 in donations -- that no one is quite sure what to do with.

"It's a situation where people are setting up these funds without thinking about where it's going to go," said Floyd Perkins, an Illinois assistant attorney general.

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