Firefighters' Kin May Not Get Funds

MARTIN FINUCANE
Associated Press Writer

BOSTON (AP) -- Touched by the deaths of six Worcester firefighters in a warehouse blaze last year, tens of thousands of people gave at least $8.5 million to a variety of funds to help the dead men's families.

Now it appears the families may never see some of that money.

While the fund's organizers study the complex federal tax rules governing money collected by nonprofit organizations, the families haven't yet seen a penny of the donations in the largest fund, which has grown to $6.4 million since the Dec. 3 fire.

``The community, and that includes us, wants this money to go to the families,'' said Thomas Cole, a spokesman for the Telegram & Gazette of Worcester, which set up the fund.

But he added: ``The amount of money raised exceeded any expectation that we had. And it may well exceed the amount the IRS would allow be distributed directly to the families.''

The newspaper is working with tax advisers, state regulators, the Internal Revenue Service and representatives of the families to try to clear the legal hurdles and get the money to the families, Cole said.

The firefighters died after two of them became lost in a burning warehouse while looking for homeless people they thought were inside. Four more firefighters went in to find them, and they all perished.

It was the worst loss of life among firefighters from a building fire in America in more than 20 years. President Clinton and Vice President Al Gore joined 40,000 mourners at the memorial service.

Seventeen children were left fatherless.

Colleges offered free tuition. A rock band offered to play a benefit. Residents of nursing homes collected donations from visitors. A baseball team contributed money from ticket sales.

Relief funds were set up to collect donations, including the Fallen Firefighters Fund of Worcester, managed by the city firefighters' credit union. It received nearly 20,000 contributions and already has distributed more than $2 million to the families. A Salvation Army fund also collected $171,000, which will soon be given to the families.

``I expected some donations, but the outpouring was remarkable. People from all over the world donated,'' said Deputy Fire Chief Gerard Dio, treasurer-manager of the credit union.

The problem with the largest fund, according to experts, is the rules that govern it because it was set up as a nonprofit corporation.

That allowed those who donated to make tax-deductible contributions, making it more attractive to businesses. But it also placed the fund under the restrictions of the IRS, unlike the credit union fund, which could simply give out the money. The newspaper fund took in 43,000 donations.

Ben Tesdahl, a Washington attorney specializing in nonprofit law, said disbursing money from a nonprofit fund is a tricky. The law is designed to ensure such organizations, in exchange for favorable tax treatment, help a large segment of the community and not just a small, specific group.

He said generally the IRS wants the nonprofit to determine the need of the recipients and release money based on that need.

``At some point, once their need is fulfilled, you don't just keep dumping the money on them and make them rich,'' he said.

But he also said: ``If the board of this fund believed that these families needed and deserved $6.4 million, that's theoretically permissible.''

It is not the first time that such funds have faced challenges: The Denver-based Mile High United Way distributed $4.6 million after the Columbine High School shootings. United Way spokeswoman Kelly Cahill said that, after weighing the needs of victims and donors' intent, $3 million went to victims and the remainder went to community programs and services.

The Telegram & Gazette said it will set up a community board independent of the paper to make decisions about how to give out the money. The newspaper hopes to begin distribution in September. ``What we want to do is alleviate the distress of the families, provide for their future security, meet their needs, before any other purposes are considered,'' Cole said.

He said if all the money can't go to the relatives, some might be used for a memorial.

Family members did not respond to a letter requesting comment.