Much of the $1.1 billion donated to charities to help the victims of Hurricane Katrina may be unavailable to assist those affected by Hurricane Rita because of legal limits on how the organizations can use the money.
Rita is widely expected to cause significant damage along the Gulf Coast when it slams into the Texas shoreline late today or early tomorrow. But laws in most states requiring charities to honor donors' intentions will hamper the charities' ability to use money raised for Katrina victims to aid survivors of Rita, relief organizations and legal experts said yesterday.
The situation has sent charities scrambling to reword fundraising appeals -- or launch new ones -- in order to free cash for what could be another catastrophe.
"It's a nightmare," said Maj. George Hood, a spokesman for the Salvation Army, which has raised $156 million to help the victims of Hurricane Katrina. Now, Hood said, the group will probably have to start a separate fund for Hurricane Rita donors.
The Red Cross, which has raised $827 million for Katrina relief, said yesterday that it also expects shortly to set up a system to allow donors to designate contributions to Hurricane Rita relief.
Although there will be overlap because the storms are affecting some of the same areas and the same people, the money raised so far by the Red Cross "came in specifically for Katrina, and that is what it will be used for," said spokeswoman Devorah Goldburg. "There is no wavering."
Legal experts said charities are restricted by state laws that generally limit the use of charitable funds to their designated purpose.
"You cannot accept it for one purpose and use it for another," said Eugene Tempel, executive director of the Center on Philanthropy at Indiana University.
Diverting funds to a different cause -- even one as similar as another hurricane -- could open charities up to prosecution by state attorneys general, said Jill Manny, executive director of the National Center for Philanthropy and the Law at New York University.
Many charities are also mindful of the controversy that ensnared the American Red Cross over its Liberty Disaster Fund, created after the Sept. 11, 2001, attacks.
The organization came in for a wave of criticism when it decided to reserve some of the money for causes other than helping Sept. 11 victims and their families. In the end, the Red Cross apologized and pledged to use the money, ultimately totaling $1 billion, solely for those affected by the terrorist attacks.
Charities are determined not to make the same mistake.
Catholic Charities, which has raised $30 million in its 2005 Hurricane Relief Fund, is setting up a new fund for Rita donors, said John Keightley, senior vice president for planning and external relations. "We recognize that when people were donating September 1 and 2, they were thinking about Katrina," he said.
But if Rita hits the same region, Keightley said, Katrina funds will be used for that storm's victims.
"To make fine distinctions would be difficult if not impossible and maybe meaningless. If it follows the same path, the victims of Katrina are being victimized again," he said.
America's Second Harvest, a network of food banks and rescue organizations that has moved more than 30 million pounds of food into the Gulf Coast region since Katrina hit, has developed a careful plan to avoid running afoul of donors' intent and the law.
"Money pledged and intended or received for Hurricane Katrina relief and recovery between August 29 and September 23 will be solely used for Hurricane Katrina relief and recovery," said America's Second Harvest spokeswoman Maura Daly. As contributions to Rita relief come in, "we are going to set up a hurricane response fund that will cover incremental Katrina costs above our budget of $21 million, and additional hurricane expenses related to Rita and any future hurricanes through June 2006."
Network for Good, the nation's biggest charitable-contribution Web site, posted a new Rita relief site yesterday listing four organizations: the Red Cross, the Salvation Army, AmeriCares and the Houston Society for the Prevention of Cruelty to Animals.
Marketing Vice President Katya Andresen said the Web site included the four after verifying that all planned to be active in Rita recovery efforts and would honor any contributions specifically earmarked for Rita.
Meanwhile, "if there are agencies listed on the Katrina page who contact us and say they're going to do work for Rita, we'll make that clear to our donors," she said. "I want to be completely transparent and make it clear where charitable dollars are going."
Other organizations are still trying to figure out what they will do.
The Bush-Clinton Katrina Fund, headed by former presidents Bill Clinton and George H.W. Bush, issued a statement through Clinton Foundation spokesman Jay Carson: "Presidents Bush and Clinton continue to focus on raising money for the hundreds of thousands of people who were displaced and are suffering as a result of Katrina and their thoughts and prayers are with those people preparing for Hurricane Rita."