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Usa For Africa Financial Update : 'Hands' To Give California $1.2 Million

October 10, 1986|DENNIS McDOUGAL | Times Staff Writer

When the USA for Africa foundation begins slicing up the Hands Across America pie next month, California's Skid Row residents will get $1.2 million--the biggest slice of all.

In announcing the first of the grants to be made from the $16 million raised by the May 25 mega-event, officials of the pop charity said this week that all 50 states and the District of Columbia would get a share of the public contributions.

But California--followed by Texas with $1 million in grants--will get the largest share because both states have high poverty levels and also drew the most participants in the national hand-holding event.

Officials also announced this week that last year's mega-event--the all-star recording of the hit song "We Are the World"--had resulted in record sales that put the foundation's African relief fund over the $50-million mark, 15 months after the record fell off the Billboard magazine chart of best-selling American records.

About two-thirds of the "We Are the World" money has been spent on aid for the African famine victims that the USA for Africa Foundation vowed to help, said foundation executive director Marty Rogol.

At a press conference on the foundation's finances Wednesday, president Ken Kragen addressed criticisms of the foundation's slow spending process by saying that the organization made a promise to those who bought the record to spend "every dollar" wisely on African relief and development. Such a process, he said, takes time.

"It's important to note that that promise has been lived up to," he said.

Kragen said that a $2.5-million royalty check from CBS Records had just boosted the foundation's African relief, recovery and development fund to $51,265,721.

He also said that Hands Across America, the foundation's second major charity effort, has earned $32.5 million to date in corporate and public donations. That effort attempted to raise $50 million for America's homeless and hungry by getting at least 5 million Americans to pay $10 apiece to link hands from coast to coast last May 25.

Kragen estimated that $8 of every $10 that the public contributed will actually go to aid the homeless and hungry.

After meeting $16.3 million in overhead, the organization now has about $16 million to give to the poor. The Los Angeles-area poverty agencies that will receive portions of California's $1.2 million share of the $16 million will not be revealed until Thanksgiving, officials said.

Rogol said that about 80% of the "We Are the World" monies have actually been committed, even though only about $36.5 million has actually been spent. About $19 million has gone to emergency food, medicine and survival supply shipments to the drought-stricken countries of Eastern Africa. The remainder has been spent on recovery projects, such as the $1.5-million rebuilding of a bridge over the Lare River in Chad; or development projects, including the construction of a $1-million maintenance garage in Addis Ababa, Ethiopia.

About $4.5 million or, about 10% of the "We Are the World" monies, has been spent on U.S. poverty projects. Under the original distribution plan for the record royalties, 90% of the money was earmarked for African relief and 10% for America's poor.

Another $5 million has been approved or "allocated" for African projects by the foundation board of directors, but remains invested along with about $10 million in uncommitted funds, in interest-bearing money-market certificates in U.S. banks.

When money for an approved project is needed--sometimes many months after the board allocates it--the funds are withdrawn from the bank and sent to an agency such as UNICEF or Save the Children, which sponsors the project, according to foundation guidelines.

Budgeted office overhead for 1986--such as postage ($24,000), payroll taxes ($12,000), parking ($10,500) and an annual payroll at $240,000--is paid out of the interest earned on money market certificates. The organization's Century City high-rise office space is donated, as was the Le Bel Age Hotel salon where the press conference was held.

As part of the committed $36.5 million, 70 grants worth about $8 million were spent for African development projects, it was revealed. They range from truck repair in Niger to oven testing in Chad to vegetable gardens in Burkina Faso. Another $5 million in grants for Sudan and Ethiopia, where the African famine began, will be announced in November.

Last month, the foundation announced the opening of a Park Avenue office on Manhattan's Upper East Side where its Medical Task Force is now headquartered. The task force is sponsoring another $1.4 million in grants for medical relief efforts in Africa.

Kragen said there are no immediate plans for a "mega-event" follow-up to Hands Across America, though he does hope to sell a one-hour "Hands" television special, hosted by actor Daniel J. Travanti, to network television for broadcast sometime in November.

Though he would reveal no specific foundation plans, Kragen did hint that a Hands-type event might be in the offing for the spring of 1988 as a means of influencing the 1988 Presidential elections.

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