$11 MILLION FOR POOR FROM ‘HANDS’

Last month’s Hands Across America fund-raising extravaganza raised awareness, expectations and hope, but only a fraction of the money for the homeless and hungry that organizers believed they would receive.

After the USA for Africa Foundation, pays $16 million to $17 million in outstanding bills, its board of directors will have about $11 million left over to give to the nation’s poor, according to the first post-event report issued late Tuesday. The foundation organized the Hands Across America project,

“We want to emphasize that this is an interim report,” USA for Africa President Ken Kragen, the project’s chief driving force, told The Times on Wednesday. “People tend to take any figure they see and see it as final. This is a work in progress, both in terms of (lowering) expenses and (increasing) donations.”

Though the May 25 event that drew 5.5 million participants appears to have fallen far short of its original $100-million fund-raising goal, organizers still hold out hope that merchandise sales, a book deal with Simon & Schuster, a television special and continued pledges will boost their take to $50 million by the end of the summer.

The blame for the shortfall thus far appears to be that most of the 5.5 million participants stood in line for free instead of paying even the minimum $10 donation.

“A mailing just went out (to participants),” Kragen said. “And we’ve been getting several hundred thousand dollars a day in donations. We got close to $1 million in just five days last week.”

As of this week, actual cash contributions totaled $27.8 million, the foundation reported Tuesday. Almost $8.6 million of that came from corporations like Coca-Cola, Citibank, American Express and Cheeseborough Pond.

Another $8.6 million has been pledged, but not collected, organizers reported. If the pledges are made good, Hands Across America should have taken in $36,444,533 as of Monday, according to organizers.

But operating overhead alone will total about $12 million, the report said. One major expense was $2.5 million in insurance premiums.

The biggest expense--salaries--was anticipated several weeks ago by Kragen who told The Times that “it costs a lot to get good people.” He said then that the paid staff of Hands Across America numbered more than 350.

Another $4 million to $5 million will be spent over the summer to advertise, sell and mail Hands Across America merchandise. The toll-free 1-800-USA-9000 telephone bank is still operating and merchandise catalogues that are now available could yield several million more in revenue, Kragen said.

“The thing is, to put this in perspective, expenses are pretty front-loaded costwise,” said Hands Across America press spokesman Dave Fulton.

In other words, he said what he meant was that expenses would not exceed $16 million to $17 million, but that USA for Africa hoped to raise a lot more in contributions.

“Internally, I said all along that it would probably be in the $15- (million) to $20-million net range,” Kragen said. “People will continue to contribute and the good thing is that the expenses may go down because we’re in negotiation in a number of areas (to get creditors to lower bills).”

Kragen and Hands Across America project manager Fred Droz both said that two of the three goals they set were met, if in a somewhat modified way.

When they first announced the ambitious project last fall, they envisioned a line of 6 to 10 million people stretching from New York to Long Beach on May 25 for a 30-minute singalong of “We Are the World,” “America the Beautiful” and “Hands Across America.” An estimated 5,602,960 people actually stood somewhere in the line, but there was no even distribution and, as a result, there were large gaps in both rural and inner city areas while suburbs experienced bulges of hand-holding participants.

A second somewhat amorphous goal was to “raise awareness” among U.S. citizens of the 20 million homeless and hungry in their midst. Kragen cited dozens of newspaper and magazine stories as well as television coverage before and after the event that he believed would not have taken place had Hands Across America not drawn media attention to the plight of the poor.

He said $1 billion in hunger relief legislation that was introduced in Congress two weeks ago by Sen. Edward Kennedy (D-Mass.), and Rep. Leo Pinetta (D-Calif.), owes much of its support to the Hands Across America media blitz.

The third stated goal of raising $100 million for the poor was pared down to a $50-million goal in March.

In comparison to last year’s USA for Africa triumph of raising $44.5 million in donations, “We Are the World” record royalties and other merchandise sales, Hands Across America initially appears to have been a fund-raising disappointment. Money from the Hands Across America project has been kept in accounts separate from the “We Are the World” monies, which were chiefly earmarked from the outset for African relief.

Foundation executive director Marty Rogol said this week that $15 million to $20 million of the “We Are the World” monies remain invested in certificates of deposit, though most of the $44.5 million has been spent on African relief projects. The USA for Africa Foundation pays for a portion of its administrative costs with the interest earned off the funds remaining in the bank.

Rogol said that all $44.5 million has been allocated to African or U.S. hunger projects.

None of the Hands Across America money has been spent or allocated thus far, Kragen said. A task force of experts will be selected at a foundation board meeting scheduled for June 24 and they will screen grant applications for the money before the board is asked to make a final decision.

Rogol and Kragen hope to begin making the initial grants by September.

“We feel pretty good about what we’re accomplishing even if in a pure dollar sense we fall short of what we hoped for,” Kragen said.

Following is state-by-state breakdown of the participants, donations and pledges (excluding corporate contributions of $8.6 million) from the Hands Across America route as of June 9, 1986, as provided by Hands Across America.

State Participants Donations Pledges Arizona 200,000 $644,781 $213,472 Arkansas 350,000 $266,027 $140,162 California 400,000 $3,156,091 $1,645,262 Delaware 68,000 $278,041 $74,851 District of Columbia 250,000 $177,366 $45,064 Illinois 500,000 $1,356,154 $703,357 Indiana 410,000 $490,218 $192,890 Kentucky 64,000 $109,237 $57,281 Maryland 180,000 $966,481 $321,385 Missouri 220,000 $629,884 $119,377 New Jersey 200,000 $2,170,789 $854,475 New Mexico 238,000 $344,476 $171,763 New York 250,000 $1,567,558 $886,810 Ohio 901,960 $1,880,047 $446,425 Pennsylvania 571,000 $2,034,622 $737,547 Tennessee 180,000 $185,194 $84,573 Texas 620,000 $917,207 $521,147 On-Line (persons who actually were on the 4,152-mile route) Total 5,602,960 Off-Line Totals 1,500,000 $2,059,189 $1,403,756 Totals 7,102,960 $19,233,362 $8,619,597

State Total Arizona $858,253 Arkansas $406,189 California $4,801,353 Delaware $352,892 District of Columbia $222,430 Illinois $2,059,511 Indiana $683,108 Kentucky $166,518 Maryland $1,287,866 Missouri $749,261 New Jersey $3,025,264 New Mexico $516,239 New York $2,454,368 Ohio $2,326,472 Pennsylvania $2,772,169 Tennessee $269,767 Texas $1,438,354 On-Line (persons who actually were on the 4,152-mile route) Total Off-Line Totals $3,462,945 Totals $27,852,959