USA FOR AFRICA THE AUDIT

NEW GRANTS LISTED FOR THE HUNGRY, HOMELESS

LOS ANGELES, MARCH 25 -- LOS ANGELES, MARCH 25 -- Responding to charges of expensive overhead and funding delays, the USA for Africa/Hands Across America organization today released its first certified independent audit, showing that administrative and fund-raising costs have taken less than 10 percent of $82.5 million raised for the hungry and homeless.

The organization, begun two years ago by entertainment industry executives appalled by the famine in Ethiopia, also reported new grants for projects throughout Africa and for the hungry and homeless in the United States.

The grants for the homeless include $230,786 for Virginia projects, $192,377 for Maryland and $100,000 for the District. USA for Africa President Ken Kragen and Executive Director Martin Rogol said they delayed awarding homeless funds until local advocates could present plans for a unified approach to the problem that might create other sources of funds and help rehabilitate, as well as feed and house, the needy.

"You can give it out right or you can give it out fast," Rogol said. "We're confident we've done it right."

The Laventhol & Horwath audit, dated March 6 and concerning funds collected through Dec. 31, 1986, said the two campaigns raised a total of $82,479,199. Kragen said another $1 million to $2 million has been raised so far this year. Of the $82.5 million, the audit indicated, about $53 million was raised for the We Are the World relief fund, 90 percent of which is to be spent in Africa, and about $15 million from the Hands Across America campaign, which will be spent in the United States.

The initial We Are the World campaign, named for the hit song recorded by a chorus of superstar volunteers, enjoyed the advantages of an almost totally volunteer administrative team and very low overhead, Kragen said. More than 90 percent of its revenues went to famine relief activities in Africa.

But Hands Across America, a celebrated effort to create a human chain of several million contributors across the country last May 25, "was like organizing a political campaign, and it required a lot of professional help," Kragen said.

The audit indicates that Hands Across America participants contributed about $24 million. The event cost $11.1 million to produce, of which $8.1 million was offset by corporate sponsors, leaving about $3 million in net expenses. Professional fund-raising for the event cost another $5.6 million, leaving slightly more than $15 million to be distributed to projects for the homeless and hungry across the United States.

Kragen said that when he and Rogol brought in advocates for the homeless from around the country to discuss what to do with the money, the first thing they said was "it's not much." Kragen said he told them he realized that, and wanted to use it in a way that would have the most impact. After the meeting, Kragen's group drew up guidelines for funding requests that encouraged organizations to use the money for matching grants from other sources, to staff job banks or to provide new equipment that would help the homeless find a way to support themselves.

Rogol said the money helped encourage advocates running shelters and hunger workers running food banks to cooperate in new coalition programs. In some states, he said, the Hands Across America money created public interest in the problem of the homeless and allowed local officials to survey the number of homeless on their streets. Jean DeMaster, executive director of Burnside Projects in Portland, Ore., wrote Kragen and Rogol to say their initial $40,000 grant "will leverage funds 10 to 20 times the grant amount."

Washington area grant recipients announced today included $20,000 for the Maryland Food Bank Inc., $15,000 for the Mental Health Association of Prince George's County, $3,000 to Arlingtonian Ministering to Emergency Needs (AMEN) Inc., $3,800 to United Community Ministries of Alexandria, $15,000 to the Hunger Action and $15,000 to the Church Conference on Shelter and Housing in the District. Some of the local money is earmarked for setting up a revolving emergency rent loan fund, repairing the roof of a shelter, transporting potatoes harvested in Virginia and organizing a fund-raising event.

The audit reported general and administrative overhead for the entire USA for Africa/Hands Across America organization as $1.65 million, 2 percent of total revenue. The total fund-raising costs of $5.67 million, almost entirely in connection with Hands Across America, amounted to 7 percent of total revenue. Both figures were below the norms for most charitable organizations, Kragen said.

Rogol said he was working to complete the distribution of funds. About 77 percent of We Are the World funds have been awarded so far. He said plans called for 80 percent of Hands Across America funds to be awarded by the first anniversary of the event in late May.

Kragen said he was beginning to explore new ideas "for encouraging social responsibility among young people in college and high schools," while waiting to see if he hears of other ideas that could help the hungry and homeless.

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.