Joshua Gotbaum, Executive Director and CEO, September 11th Fund: Assessing Immediate and Longer-Term Needs

July 22, 2002
Joshua Gotbaum, September 11th Fund

In a farsighted and collaborative act, the September 11th Fund was established by the New York Community Trust and the United Way of New York City on the afternoon of September 11 to meet both the immediate and long-term needs of the victims, families, and communities affected by the terrorist attacks on the World Trade Center and the Pentagon.

In the months that followed, the Fund raised some $500 million for victims of the attacks — and became a lightning rod for media criticism of the relief and recovery efforts. In January, the Fund announced that it was no longer accepting donations, and in June, having already distributed some $300 million in cash assistance and reimbursement, grants and loans, and other services, the Fund announced a $200 million Ongoing Recovery Program to meet current and future needs arising from the attacks.

In May, Philanthropy News Digest sat down with September 11th Fund executive director and CEO Joshua Gotbaum to talk about the genesis of the Fund, its activities in the wake of the attacks, and his reaction to criticism of the Fund's mandate and policies.

Josh Gotbaum has been executive director and chief executive officer of the September 11th Fund since October 15, 2001. In that role, he is responsible for creating and managing the organization and staff of the Fund, as well as developing the grant programs by which it will distribute more than $400 million in contributions.

Gotbaum has more than twenty years of financial and management experience in both business and government. He served as executive associate director and controller of the U.S. Office of Management and Budget from June 1997 to January 2001, and, prior to joining OMB, was assistant secretary of treasury for economic policy, serving then-Secretary of the Treasury Robert Rubin and then-Deputy Secretary Laurence Summers, from 1996-1997. Gotbaum also served in the newly created position of assistant secretary of defense for economic security from 1994-1995.

Prior to that, Gotbaum was a partner and managing director of the New York investment bank of Lazard Freres & Co. He was with the firm, both in New York and London, from 1981-1994, providing advice in mergers and acquisitions, corporate finance, bankruptcies, and restructuring.

Mr. Gotbaum holds degrees from the John F. Kennedy School of Government at Harvard University, Harvard Law School, and Stanford University. His family remains in Washington, D.C.

Philanthropy News Digest: Josh, where were you on the morning of September 11?

Joshua Gotbaum: Actually, I was gathering my children at my home in Washington, D.C., to drive up to New York to campaign for my stepmother, Betsy Gotbaum, who was running for the office of Public Advocate.

PND: The eleventh was primary day in the city...

JG: The eleventh was primary day. So, instead of driving up, we watched the events unfold on television.

PND: Did you make it to the city that day?

JG: No. As you may recall, all the bridges and tunnels leading into and out of the city were closed within hours of the attacks.

PND: The September 11th Fund was created on the afternoon of the eleventh by senior staff at the New York Community Trust and the United Way of New York City. The speed with which those organizations moved to respond to events was impressive, given the state that most people were in that day. But the executives of those two organizations also came up with a broad, flexible mandate for the Fund that, in hindsight, is fairly remarkable. Can you tell us what that mandate is and how it was arrived at?

JG: The architecture of the September 11th Fund is one of the more extraordinary creations to come out of the tragedy, and I give credit entirely to Lorie Slutsky of the New York Community Trust and Ralph Dickerson of the United Way. They recognized, on the afternoon of the eleventh, that no one could predict how many victims there would be, where they would be, or what their needs would be. All they knew was that the range of needs would be broad, and that in order to respond to those needs, they would need flexibility. And so they purposely designed an organization — initially comprised of their own staffs — with a very flexible mandate.

Another inspiration was the notion that this would be a grantmaking organization, and that it would work through other agencies to deliver services. That meant, first, that they could fund organizations that already had the competence and the infrastructure to help the victims, organizations like Safe Horizon, Legal Aid, and others. Second, it meant that they did not have to wait to build up the Fund's staff or management in order to provide help. In fact, they made their first grants within days of the eleventh.

The last piece of the original design that I also think was inspired is the fact that this was a true collaboration. On September 11, the New York Community Trust and the United Way of New York City created a joint venture, the ultimate act of coordination, and decided to give it a separate management and board. It was extraordinarily farsighted.

PND: When were you asked to come on board? And what were you doing prior to that?

JG: I had left Wall Street to work in the Clinton administration, where I held a variety of positions in the Defense Department, the Treasury Department, and in the White House Budget Office, which involved a combination of management and finance. I was taking a sabbatical and trying to decide where I would go next when, in early October, I was approached about this job. I decided it was something so important that I deferred other opportunities I had been considering.

PND: How did the Fund go about assessing the needs of the victims' families, the injured, displaced workers, residents, and the small business and nonprofit community in the weeks following September 11? Was there a formal process in place?

JG: Even before there was a September 11th Fund board and management, the staffs of the New York Community Trust and the United Way of New York City held meetings with some three hundred and fifty organizations — service providers and funders, government agencies, and nonprofits. The reason they did so was to develop the best view possible of where help was needed. They responded, within days thereafter, by making a range of grants to meet the emergency needs they saw.

"...From the first, the staffs of the New York Community Trust and the United Way of New York City, working through the Fund, provided grants to underwrite cash assistance, to cover rent checks and tuition payments, to cover health care expenses...."

 From the first, the staffs of those two organizations, working through the Fund, provided grants to underwrite cash assistance, to cover rent checks and tuition payments, to cover health care expenses, and so forth. The initial staff of the Fund recognized that people would need counseling and made grants to provide these services. Funds were allocated for job training and job placement, as well as the critically important work of the rescue effort and the nonprofits that were participating in that effort. Funding was provided to assist small businesses recover from damage and loss so they could still serve their communities, and especially important, though less well recognized, grants were made to ensure that people knew that help was available and how to get it.

One of the earliest grants was to Safe Horizon, to establish what became the September 11th Hotline, a twenty-four-hour-a-day, multi-lingual service, so that people could find out what help was available. Funding was also provided to Seedco [a national nonprofit community development intermediary] and Safe Horizon to create a reference guide to the range of services that were available, and funding was provided to an outreach program to get the word out to those who were affected but didn't speak English. Even in hindsight, I think it was a marvel.

What we did later, after the board was created and management was installed, was to present to the board an overview of the people who had been affected by the events of the eleventh and the range of possible needs and then said to them, "You're going to have to decide what the priorities are." There were discussions, in great detail, at the board level about that. And what the board decided, after much discussion, is that they would take into account the fact that the Red Cross and other charities were being very generous to some of those affected by September 11 — families where someone had died or had been seriously injured, for example — but that there was not the same level of recognition for individuals who'd lost their jobs as a result of the attacks. As a result, one of the earliest decisions of the board was the decision to create a cash-assistance program that included a broad range of beneficiaries. It included the widows of firefighters, people who had lost their jobs as a result of the attacks, people who were displaced from their homes, as well as dependents of these individuals.

We then went back, in area after area, and asked the board, "How far can we go to provide support? Where and how do we take into account the generosity of our donors?" For example, in the small-business area there is a series of government programs that provide support for small businesses affected by the attacks. But some businessmen were reluctant to enter those programs because they would have been required, in effect, to provide a personal lien on their homes in order to get assistance. So we funded a set of programs that didn't require that. In the case of job training, the state government in New Jersey and the City of New York, under the Bloomberg administration, are offering quite generous job-training voucher programs. But we saw a need to augment their programs by funding job assessment; by funding public-education campaigns to let people know that these services are available; and by funding income supplements so that people could afford to use the training vouchers.

That's the process the September 11th Fund board has followed in area after area. In each case, the board has had to make judgments about what others are doing and the extent to which the Fund should focus on those areas versus focusing on areas that other organizations don't or can't address.

PND: You mentioned the importance of coordination. How did you and your colleagues keep abreast of what others were doing in those first few weeks, and how did the process of coordinating your activities with relief agencies and other funders evolve over time?

JG: This is one of the unsung stories of September 11. As I mentioned, the staffs of the New York Community Trust and the United Way met with some three hundred and fifty different organizations early on to discuss what help was needed and who was providing it. At the same time, service deliverers recognized that they needed to coordinate their activities. At the Family Assistance Center at Pier 94 [on the West Side of Manhattan], Safe Horizon, the Salvation Army, and the Red Cross met and worked out procedures so that a person who came in could go from one agency to the other without having to re-invent the wheel. It was a challenging task, because most of these organizations had a history of providing help on their own. But they worked hard to change.

There were other issues. For example, the Red Cross hotline developed a script that let people know what services were available from organizations other than the Red Cross. And the September 11th hotline, operated by Safe Horizon, did the same. That required a different kind of cooperation.

One of the earliest things we did at the September 11th Fund was to encourage Eliot Spitzer, the attorney general of New York State, in his efforts to get the charities to work together to create a single database of recipient information. And the reason for that was because there was no reliable way of reaching the people affected by September 11. So with our support and Eliot Spitzer's support, thirteen of the leading charities formed the 9/11 United Services Group. And one of the first tasks they took on was the creation of a common database. So now, information about people who have been helped by Safe Horizon, by the Salvation Army, by the Red Cross can be shared, and organizations involved in the recovery effort can build on that and inform their clients of the services that are available elsewhere. And that's important.

Remember, each of these organizations has a long, proud history of serving people in its own way. For example, Safe Horizon, when they interviewed people applying for assistance, took down a Social Security number. The Red Cross, as is its practice, did not. So when they got together, they realized they were not asking the same questions and that they had to change their interview protocols in order to provide common service. And they did that. It wasn't easy, but it was done.

On the funding side, we have had a continuing discussion, with the Red Cross and others, to make sure that we leverage our resources and meet as many needs as possible. We've had the same discussions with many of the government agencies, including the Department of Employment of the City of New York, with the Governor's Office in New Jersey, with FEMA [the Federal Emergency Management Agency], with the New York State Office of Mental Health. And that, in my view, is an integral part of providing help, because if we work together we can help many more people and address many more needs.

"...In the final analysis, recovery from September 11 has been and will continue to be, a challenging task; no one expects otherwise...."

But in the final analysis, recovery from September 11 has been and will continue to be, a challenging task; no one expects otherwise.

PND: The outpouring of donations and contributions to the Red Cross, to the September 11th Fund, to the Salvation Army, and to other relief funds was one of the most significant aspects of the 9/11 story. How much has the Fund received in contributions to date?

JG: The Fund has received almost $500 million dollars in contributions.

PND: What percentage of the total was contributed by foundations and corporations?

JG: Approximately two-thirds. But we have — thanks to the United Way and the telethon provided by the networks [America: A Tribute to Heroes, which was aired nationally by ABC, CBS, and NBC on September 21] — almost $200 hundred million in individual contributions.

PND: How much did the telethon raise?

JG: A little more than $125 million.

PND: And how much of the $500 million have you distributed?

JG: As of June 30, the Fund had distributed $301 million for cash assistance and services to more than one hundred thousand people, including thirty-eight hundred families and other financial dependents who lost a loved one as well as those who were severely injured; thirty-five thousand dislocated workers and their families; and six thousand individuals and families displaced from their homes. Over the last ten months, the Fund has helped more than thirty thousand people get counseling, legal services, and/or job referrals. The Fund also contributed to the rescue efforts at the World Trade Center, Pentagon, and in Pennsylvania; paid for the first resource guide and a national hotline for those affected; and made possible loans, grants, and other forms of assistance to more than seven hundred small businesses and nonprofits in Lower Manhattan.

PND: Have you established a time frame for distributing the balance of the money you've raised?

JG: The Fund was intended to meet both the immediate and long-term needs of the victims, their families, and the affected communities, and we've already made grants that anticipate needs three to five years out. We have consciously planned for the fact that needs will be substantial in the long-term. One of the lessons we learned from Oklahoma City is that many people affected by the events of September 11 won't even recognize that they need help for months and, in some cases, years. Today, seven years after the Oklahoma City bombing, some twenty percent of the families that have received counseling are still receiving some form of assistance. So we know that there are going to be ongoing needs, and that the September 11th Fund has to be able to help meet those needs, working hand-in-hand with government and other charities, for as long as funds last.

PND: Specific language mentioning long-term needs was included in the mission of the September 11th Fund from day one, was it not?

JG: Yes.

PND: And yet many people in the media and the general public seemed to miss that fact. They also seemed to be confused about whether the administrative costs of the Fund were and are being paid for by contributions to the Fund. For the record, can you describe your policy in that regard?

JG: This is another one of the judgments made by the New York Community Trust and the United Way on the first day that, in hindsight, has proved to be very wise. From the first day, the United Way and the New York Community Trust said that contributions to the September 11th Fund would not pay the administrative costs of the Fund. Instead, they decided to raise those costs separately. And so the administrative costs of the Fund have been either donated by the New York Community Trust and the United Way, or contributed — directly and specifically — by other foundations, including the Ford Foundation, the Charles Stewart Mott Foundation, and the Denver Community Foundation. Probably because I did not come from the world of philanthropy, I didn't realize, when I first got here, just how smart a decision that was. But I understand it now.

PND: The September 11th Fund was criticized in October by Fox News personality Bill O'Reilly on this score, as well as for allegedly commingling contributions to the September 11th Telethon Fund with contributions to the Fund itself. Given that your policies in both regards were quite clearly stated on your Web site, why do you think O'Reilly had such a hard time getting his facts straight?

JG: Mr. O'Reilly's primary interest is entertainment, not the facts.

PND: You were able to mollify him on the topic of administrative costs when you appeared on his show in October. But a week or so later, he criticized the Fund again for allowing grantees to cover a portion of their administrative expenses with grants they'd received from the Fund. Did it ever occur to you or the board of the Fund that grants made to organizations involved in the relief and recovery effort should be used exclusively for relief and recovery?

JG: Contributions to the September 11th Fund are used exclusively for relief and recovery. The issue here is whether or not relief and recovery should be provided only by volunteers, using donated space and donated equipment, and only take the form of cash assistance. And we think the answer to that is a resounding no. The reason is quite simple. First of all, it's very clear from Oklahoma City and elsewhere that those people affected by the events of September 11 are going to need more than cash. They're going to need someone to talk to. They're going to need help finding new jobs. Their kids' teachers are going to need to learn how to talk to kids who lost a parent or relative. Cash is not the only answer.

"...Delivering services cannot just be a volunteer activity. If we had waited until there were organizations staffed entirely by volunteers, the victims of September 11 would still be waiting for help...."

The other fact is that delivering services cannot just be a volunteer activity. If we had waited until there were organizations staffed entirely by volunteers, staffed in facilities that were only donated, using only computers and software that were donated, the victims of September 11 would still be waiting for help. Instead, we've been able to help some one hundred thousand people begin to rebuild their lives.

PND: On balance, do you think the media, both print and broadcast, played a constructive role in the weeks after September 11?

JG: I think the media played an essential role after the attacks, informing the public and helping us come together. The incredible generosity that permitted the broadest charitable effort in history was surely the result of the fact that the entire world was watching.

However, the coverage of how charities responded and how people were helped was abysmal. Many of those covering the effort had no experience either with disaster-relief agencies or social-service agencies and, faced with the demands of a ninety-second spot and a few hours to prepare, did not take the time to learn. They were far more interested in accusations of scandal than reporting the facts. It was much easier to find one person who was dissatisfied than to report on a very complex effort involving tens of thousand of people. Often, the genuine anguish, frustration, and confusion of victims was taken as proof of incompetence on the part of the disaster-relief charities.

Many charities provided extraordinary support to tens of thousands in a difficult situation, yet the public almost never saw the checks being written at the Family Assistance Center, the lawyers helping people get custody orders and access to their banks accounts. They didn't see the job fairs, the group-counseling sessions, or the hotlines that night and day made it possible for tens of thousands to find help. Unfortunately, charities helping people rebuild their lives didn't make the evening news or the front page very often; in fact, it was rarely reported at all.

PND: You've already described some of the services that the Fund underwrote in the weeks and months following September 11. What kinds of things are you underwriting now?

JG: What we hope we can do now, in a coordinated effort with other funders and with government agencies, is put in place programs to continue meeting the needs we have identified as and when they arise. We're going to keep helping those who need it, but in a better way. We're going to meet needs that other don't, and give people choices where and how to get help, and make it as easy as possible for them to get it. We're making grants that provide additional benefits such as health insurance and skills training, allowing people to choose how and with whom they wish to interact and providing one-on-one assistance to help inform, guide, and connect people with available services. More than one hundred thousand families have already received checks. Tens of thousands will get free mental health counseling. Legal help is being provided for thousands. Job help for more than seventeen thousand. An estimated four thousand small businesses and nonprofits will receive grants and loans, and approximately twenty-five thousand school children will receive counselors, after-school programs, and art therapy.

All this so that six months from now, when the widow in Morristown, New Jersey, realizes that she should reach out for help to cope with her grief, she'll be able to have someone who can tell her where to get help, and the September 11th Fund and others can pay the cost of that help. Or, so that the immigrant in Chinatown who doesn't speak English and has lost his job because his neighborhood was essentially sealed off for weeks after September 11 will know that job-training assistance is available. Or, so that the woman I met whose firefighter son died on September 11 and who was totally dependent on him will have someone who can say to her, "What do you need? We'll help you get it."

PND: Is the September 11th Fund still accepting donations?

JG: No, we are no longer accepting donations. Another of the farsighted acts of the New York Community Trust and the United Way was to say, in January, "We have enough to meet the needs of the victims, the families, and the communities affected by September 11." There are many needs out there that were not caused by the eleventh, and so in January those two organizations asked people across the country to direct their generosity to help meet other needs.

PND: It's clear from your comments that you think the philanthropic sector responded effectively in the aftermath of September 11. Would that response have been as effective if the September 11th Fund had not been created on the afternoon of the eleventh?

"...One of the most overlooked stories to come out of September 11 is the fact that dozens of organizations that did not have a history of working together reached out and worked together to help tens of thousands of people affected by the events of that day...."

JG: I would hope that because the September 11th Fund was created so quickly, was given a broad mandate and interpreted that mandate flexibly, and raised substantial resources, that we did make a difference. In addition, the expertise and experience of the grantmaking staffs at both founding organizations was invaluable to getting help out quickly. But I think it's extremely important to recognize that the performance of the hundreds of organizations that reached out to help people on September 11 and in the days that followed was itself extraordinary. In my view, one of the most overlooked stories to come out of September 11 is the fact that dozens of organizations that did not have a history of working together reached out and worked together to help tens of thousands of people who were affected by the events of that day. And while nothing in this world is perfect, what they managed to accomplish in that regard was, in my view, also heroic.

PND: Is that kind of sector-wide coordination sustainable?

JG: Absolutely. The creation of the 9/11 United Services Group was a statement by the charities that they needed not only to coordinate, but to coordinate in an organized fashion. But the 9/11 United Services Group is far from the only example of coordination. There are ongoing discussions across many organizations every day and every week to figure out how we can work together on an ongoing basis.

PND: Not just on 9/11-related issues...?

JG: We hope that's one of the outcomes.

PND: Given the same set of circumstances, what, if anything, would you have done differently in the aftermath of September 11?

JG: The one thing I would have done earlier is to raise the issue of finding the proper balance between meeting the immediate needs as opposed to the longer-term needs of those who were affected. Obviously, the September 11th Fund has chosen to plan for what we know will be substantial needs in the future. And thanks to the generosity of the federal government and government generally, as well as others, there will be adequate resources to meet those needs. But if the federal government had not chosen to be so generous, then we might have made a different decision as to how we used our resources to meet immediate versus long-term needs.

PND: Are there other lessons you've learned, either personally or in terms of the institutional response to September 11, that you'd care to share with us?

JG: Several come to mind. First, there is an extraordinary benefit, in a large disaster, if government and charities can share information. I would hope that FEMA and the Red Cross, who represent the largest pool of resources and are traditionally first on the spot, could agree now on both automated forms and the privacy agreements that would be necessary to share them. Second, that the levels of service provided by social-service agencies vary tremendously and there are few mechanisms currently in place to improve that service. Last is the communications point: communications in a crisis are vital and difficult. Charities need to reach those who are affected and let their donors know what they've done. Neither the press nor the public understands what charities do, and everyone needs to work a lot harder to explain it.

PND: Finally, if people want to learn more about what the Fund is or will be doing over the coming months, what should they do?

JG: Our redesigned Web site is full of information about our grant programs and how those affected by September 11th can receive assistance. The site includes new information on the Fund and its grantees; access to services such as counseling and job training; complete lists of press releases and donors; and links to government agencies and other charities and agencies around the U.S. involved in the recovery effort. It also has letters from surviving families and photos of those involved in the recovery effort. New information is added continuously to provide those affected, our donors, grantees, and the public with the most current and accurate information available.

PND: Well, I'm afraid we have to leave it there. Thanks very much, Josh, for your time today, and best of luck as you continue to grapple with the longer-term needs created by the terrible events of September 11.

JG: Thank you.

Mitch Nauffts, PND's editorial director, spoke with Gotbaum in May. For more information about the Newsmaker series, contact Mitch at