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$15 Million For U.s. Poor May Come From 'Hands'

September 27, 1986|DENNIS McDOUGAL | Times Staff Writer

Almost half of the $31,857,877 in contributions that the USA for Africa foundation collected on its ambitious Hands Across America project will go to help the homeless and hungry.

A disclosure statement filed this week with the city's Department of Social Service showed that, as of July 31, the Century City-based charity had "approximately $15 million for distribution" to America's poor.

When USA for Africa President Ken Kragen first unveiled the plan for a national hand-holding show of compassion for the poor 11 months ago at a New York press conference, he set a fund-raising goal of $50 million to $100 million. He said at that time he estimated expenses for the event to be $18.8 million. Expenses actually came in lower than predicted.

None of the money raised by Hands Across America has been distributed to date and remains invested in short-term interest-earning money market certificates until the first charity grants are announced in early November, said Hands press spokesman Dave Fulton.

At least $8.3 million in "fund-raising and public information/education" expenses have been paid out or committed, according to the disclosure statement to the city. Though the expense breakdown reported is general and based on estimates, some of the larger specified costs included $1.6 million for the purchase of merchandise (T-shirts, pins, sun visors and other Hands Across America commemorative items), $3.5 million for insurance and $700,000 for telephones.

According to the statement, the organization spent $100,000 on staff salaries and consultants. However, in a financial statement filed with the city last May 20, the foundation reported that $917,924 had been spent as of March 31, 1986, on staff salaries.

Eight million dollars in corporate contributions are not broken down on the disclosure statement filed this week with the city. Those contributions from such companies as Coca-Cola, Citibank, J. C. Penney, American Express and Home Box Office, were "to produce the event which was used to educate the public around the issues of hunger and homelessness."

Several requests by The Times--both by telephone and in writing--for a more specific breakdown of the Hands Across America production, travel, salary and promotional expenses have been unsuccessful. Joyce Deep, director of communications for Hands Across America, said that audit results of the project won't be available until after the first of next year.

In a disagreement with the city, foundation officials did not want to record or itemize the $8 million in corporate contributions in the disclosure statement. The statement was originally filed two weeks ago, but city officials refused to accept it, in part because the $8 million was not included under the "fund-raising expenses" section of the disclosure statement.

Foundation president Ken Kragen and executive director Marty Rogol have held that the money received from Coca-Cola, Citibank and the other corporate sponsors was part of a "public education" campaign prior to the May 25 event, when an estimated 5.5 million people held hands from New York to Long Beach and sang three songs: "We Are the World," "Hands Across America" and "America the Beautiful."

Organizers hold out hope that another $7 million in uncollected pledges will still come in. If the pledges materialize, about 57% of the money that the May 25 transcontinental human chain took in will actually go to charity. If they do not materialize, the percentage will be closer to 47%.

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