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One Fund Boston: The Inside Story of the Most Amazing Victim Relief Effort in American History

How a nonprofit came together overnight—and became the fastest and most successful compensation fund in the country.

James Gallagher is a big wheel in Boston. A stocky lawyer with auburn hair, he has been a fixture in the financial services industry and the nonprofit world there for two decades. He is executive vice president of John Hancock—an anchor of the business community that for the last 28 years has been the chief sponsor of the Boston Marathon, an event so important to the civic fabric that it overshadows the actual holiday it takes place upon, Patriots’ Day. Gallagher was in the grandstands at the finish line in April 2013, bedecked in a blue suit and trademark John Hancock red tie, helping to hand out medals to the first-place male and female finishers. After handing out the medals, he had left the race to grab lunch with his sisters—visiting from Toronto for the event—and was driving back to the course when all hell broke loose.

The two pressure-cooker bombs that detonated near the finish line killed three, wounded more than 250 and left a deep and abiding scar on a city known for its ferocious pride. Gallagher spent the first chaotic hours after the explosions frantically searching for the hundreds of Hancock employees who had either run or volunteered in the race, discovering that two had been seriously injured by shrapnel. He was shocked and outraged. “We’ve been in the Boston business community for 150 years—we felt the assault on us,” he says. “This was very personal.”

The next day, Gallagher had an early morning conversation with Thomas Menino, Boston’s five-term mayor. Menino had been scrambling since the attack—trying to coordinate with area hospitals, the Boston Police Department, the FBI and Gov. Deval Patrick of Massachusetts on how to care for the victims and hunt for the suspects. The 70-year-old Menino, who has long served as the nexus of the city’s power structure, had also fielded scores of calls from area business leaders and philanthropists who wanted to help. Now, Menino told Gallagher, he needed to do some triage. He wanted to start a victims’ relief fund immediately, but his primary focus needed to be on restoring order and safety in Boston. He needed Gallagher to spearhead the relief effort, and get it going ASAP.

Gallagher hung up, and started dialing. One of his first calls was to his bosses at Manulife, the Canadian parent company of John Hancock; he convinced them to cough up $1 million to jump-start the fund. By 10 a.m., Gallagher was on a conference call with Mike Sheehan, the president of Hill Holliday, Boston’s highest-profile advertising agency, the marketing brains behind such iconic local brands as Dunkin’ Donuts and Bank of America.

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During the conference call, Sheehan remembered a conversation that he had had a few months earlier with a colleague who was raising money for the families of the school-shooting victims in Newtown, Conn. “By the time he explained all the different funds, I was totally confused,” Sheehan says. “I remember thinking that this must hurt fundraising.” To counter that problem, Sheehan proposed a straightforward name: The One Fund Boston. “One fund,” he says, “for all of Boston.”

Sheehan had one of his designers mock up a logo—a blue and gold runner’s bib with a large “1” in the middle. Then he and Gallagher called Menino back and ran through their idea. The mayor was astounded by the $1 million donation from John Hancock, and liked the name and the approach the two had come up with. He liked it so much, in fact, that he wanted to announce the creation of the fund—that day. There was going to be a press conference at 5 p.m. “I’d like to be able to close with an announcement about the fund that we’re going to set up,” Menino told Gallagher. “You have five hours.”

The efforts Gallagher and his ad-man partner Sheehan undertook would not only help a city and its wounded heal; it set a standard that could well influence America’s response to disaster and tragedy for years to come. One Fund Boston is already the most successful relief fund in the nation’s history. The question now is: would the same approach work elsewhere, in the next city struck by tragedy?

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Heather Abbott, 38, a resident of Newport, R.I., who lost a leg in the bombing, is one beneficiary of One Fund’s efforts. She spent two weeks at Brigham and Women’s Hospital and another two weeks at Spaulding Rehabilitation Center in Boston. The moment she started using her first prosthetic was, she says, “bittersweet.” “I was excited to be moving along and be on my own,” she says, “but it was also disappointing because it was unattractive, it hurt to put on, and I realized what my future looked like.” She was also surprised and worried about the costs; life-like prosthetics can cost $60,000 and must be replaced every one to three years. Patients also need multiple types for different activities. Abbott, who has started to run and paddleboard again, is hoping to stretch the money from both the One Fund and private fundraising to cover a lifetime of prosthetics. She remains overwhelmed at the generosity of people who gave money. “I couldn’t believe all these people came out to help me,” she says.

Gallagher and Sheehan had worked together on the board of Catholic Charities, the wired philanthropic arm of the Archdiocese of Boston. But nothing had prepared them for the urgency of the mission at hand. Divvying up the duties, Gallagher handled the government and legal side—the actual registering of the nonprofit, the paperwork and the operations. Sheehan took on the branding and design, and set up the website. They brought in Jack Connors—the founder of Hill Holliday and one of Boston’s most powerful philanthropists—for his advice and connections.

They tried to absorb the lessons of other victims’ funds. After the terrible December 2012 shootings in Newtown, Conn., which claimed the lives of 20 students and six adults, organizers there decided to form a relief fund under the auspices of the United Way of Western Connecticut. Unfortunately, when the time came for distributions, the foundation decided that only $7.7 million out of the $11.64 million raised would go to the families; the remainder would go to unspecified programs. The community was outraged. Furthermore, the fighting and red tape meant it took nine months for the money to be disbursed. The One Fund team wanted the money to go out much quicker. They decided against going under the umbrella of another nonprofit, and formed a separate 501(c)(3) instead.  “We wanted to avoid some of the unfortunate experiences that others have had in recent tragedies,” says Gallagher. “I’m not picking on anyone…[but there can be] great confusion.”

Early community outreach drew an overwhelming response. PayPal offered to drop its usual service fee from all donations. Goodwin Proctor, John Hancock’s legal representation, said they would handle all the legal work for free, and began to file the appropriate paperwork. Later on, the real estate company Boston Properties provided a space for the new nonprofit; NStar offered the use of its safe; and Bank of America stepped in to oversee donations.

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By mid-afternoon, Gallagher and Sheehan had made enough progress that they were confident that they could finish by 5 p.m. They called Mitchell Weiss, the mayor’s chief of staff, and told him it was a go. Sheehan began writing a press release.

At the 5 p.m. press conference, after an FBI special agent gave an update on the bombings, Mayor Menino—sitting in a wheelchair because of a broken leg—addressed the assembled reporters and TV cameras. “As the investigation continues and more victims are being identified, in true Boston fashion, we’ve received many offers of help and assistance,” Menino said. He told the audience about the creation of the One Fund Boston, as well as the names of the prominent individuals and corporations that had already volunteered their assistance and money.

“We’re all here because this tragedy is not going to stop Boston,” he said. “We are one community, and we will not let terror take us over.”

The One Fund was up and running, but there were still myriad loose ends. For starters, there was no mailing address for donors’ checks. The day after the press conference, Weiss, Menino’s chief of staff, headed to the Back Bay to register a P.O. box with a Boston address. Weiss wasn’t sure how much money they could expect to bring in for their efforts. No one was. Sheehan, in fact, had sent him a text the day before: “What about a goal of $10 million in 60 days?” Looking back, Weiss says, “I thought that if we could reach that, that would be outstanding.”

Their focus was tested; Boston was in the grips of a manhunt playing out in real time on national television. On Friday night, Dzhokhar Tsarnaev, a 20-year-old college student of Chechen descent, was captured by police while hiding in a boat in Watertown. The city was able to breathe again for the first time in a week. Weiss stopped at the One Fund’s P.O. box on his way home. He left the post office with a bag full of envelopes. “We couldn’t believe how many there were,” he says, recalling the moment he dumped the bag out in front of the mayor. Eventually, says Sheehan, “we had a 5-foot-by-5-foot stack of envelopes filled with cash and checks.”

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Time Inc. offered free advertising pages to the nonprofit, while JCDecaux volunteered outdoor ad space on bus shelters and in airports. The national advertising campaign turned the One Fund Boston into a national brand.

The corporate response was strong. AT&T, Bain Capital, Partners Healthcare, New Balance and Liberty Mutual all matched John Hancock’s $1 million donation, while scores of other companies made other major donations. In just over two weeks, the One Fund had raised $28 million, crushing their initial expectations.

Raising money was one thing, but the nonprofit needed experienced individuals to actually oversee it. Paul Connolly, the recently retired chief operating officer of the Federal Reserve Bank in Boston, volunteered to handle the accounting of the donations. And Kenneth Feinberg, the lawyer who had previously overseen victims’ funds for September 11th, the 2007 Virginia Tech shooting and the 2012 movie theater massacre in Aurora, Colo., offered to design the fund’s distribution program.

Distributions can be contentious: How much, after all, is the loss of a limb worth? Two limbs? How about a family member’s death? After a series of community meetings, Feinberg and his business manager, Camille Biros, designed a straightforward system based on the level of trauma and the length of hospitalization: the highest payouts would go to double amputees and families who had experienced a death; the next highest would go to single amputees; and so on, down to victims who had been treated on an outpatient basis for their injuries.

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The One Fund raised a staggering $61 million by June 26th, just 10 weeks after Menino had announced its creation. “It was almost $1 million a day,” says Sheehan. “That’s scary stuff. It was just an outpouring of generosity.” Based on Feinberg’s distributions, double amputees and the families of those who died received nearly $2.2 million—more than the average payout for September 11th victims’ families, and nearly eight times as high as the distribution for Sandy Hook families.

By July 4th, checks had been cut for the victims. “The community wanted to get the money to the victims directly, so they could stop worrying about the wolf at the door,” Gallagher says. “They were going to be out of work, may not have the insurance to cover their bills, and they needed that relief quickly.”

Jessica Guilbert, a physical therapist who worked with  victims at Spaulding Rehabilitation Center, saw how important the donations were. “Especially if the victim was younger, insurance is not going to cover every prosthesis that you want,” she says. “Most of the time, all that is covered was a prosthesis to walk—but our patients want to do more than that. They want to run.”

Memorial for victims of the Boston Marathon bombings

Items are placed by people visiting a makeshift memorial for victims near the site of the Boston Marathon bombings at the intersection of Boylston Street and Berkley Street.

Given its success, the One Fund has become the model for future victims’ funds. Unlike the September 11th Victim Compensation Fund, which was financed by federal money, every dime raised was through private charity. There was also no overhead, since everyone volunteered their time. Finally, having one central fund, independent of other nonprofits, proved to be key—there was no confusion for people who wanted to give, nor any bureaucracy to hold up the payouts.

Sixty-nine families of victims at Sandy Hook, the Aurora movie theater, Virginia Tech, September 11th and other tragedies, in fact, signed a Boston Globe editorial extolling the virtues of the One Fund’s approach: “All donations [to previous incidents] were collected by old school nonprofits where salaries, overhead and re-granting to other nonprofits are more important than the victims they are supposedly collecting for….It appears that this time the public intent will be fulfilled, and donations will reach the victims who are suffering so horribly with loss of life and unimaginable injuries.” The group went on to suggest that Congress use the One Fund as a model for a National Compassion Fund for future incidents.

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Boston’s fast-paced model, of course, depends on the city’s political, business and philanthropic leaders acting quickly and coordinating their approach. “We knew it had to get up and running Tuesday night or other people would have stepped in with their own things and the public would be confused,” says Weiss. “It wasn’t okay to say we’d have the official one up and running by Friday.”

Gallagher and Sheehan credit Mayor Menino and Weiss for pushing the initial idea and bringing together the right people; Weiss credits Sheehan and Gallagher for their quick work and for leading by example. “They key moment was when Jim Gallagher said that [John Hancock is] going to give $1 million,” Weiss says. “If they said they were going to give $100,000, we would have raised a lot less money. Over that weekend, more million-dollar donations came in. And we got a sense for what this could be.”

Gallagher agreed. “It’s just like if somebody is sick in your neighborhood,” he says. “People come over and make meals; they take turns looking after kids. This is the same thing, just on a larger scale. [We’re just] trying to recover from the emotional assault.”

Gallagher remains overwhelmed by the response. “To be honest,” he says, “I still have trouble when I start thinking about it. I get a little emotional.” In early January, the One Fund announced that they had raised another $12 million and would be distributing it to victims and families this summer. Impressively, the nonprofit has received gifts from more than 200,000 people. The group is now working on digitizing the 50,000 letters that came in, to share their messages with the world. “We had little kids writing in and saying, ‘We had a bake sale at school today,’ ” he says, getting choked up. “Or kids who got birthday money and turned around and sent it in to us.”

“I have immense pride in not only the Boston community, but the American community,” he says. “In the context of the marathon, there were two evil people—and over 100,000 shared their generosity with us.”

Fundraising By Tragedy

September 11th attacks

Charity: September 11th Victim Compensation Fund

Total Raised: $7 billion (federal money)

$1.8 million: Average payout to families of 2,996 killed

Virginia Tech shooting

Charity: Hokie Spirit Memorial Fund

Total Raised: $7.7 million

$180,000: Received by families of 32 killed

$90,000: Victims injured who spent 10 or more days in the hospital

Aurora movie theater shooting

Charity: Aurora Victim Relief Fund

Total Raised: $5.3 million

$220,000: Received by 5 victims with brain damage/paralysis and families of 12 killed

$160,000: Received by 6 victims who were hospitalized more than 20 days

Sandy Hook shooting

Charity: Sandy Hook School Support Fund/Newtown-Sandy Hook Community Foundation

Total Raised: $11.64 million

Total given to victims’ families: $7.7 million

$281,000: Received by families of the 26 killed

$150,000: Received by the two people injured in the attack

Boston Marathon bombing

Charity: The One Fund Boston

Total Raised: $72 million

$2.2 million: Received by families of those killed and victims with double amputations

$1.2 million: Received by victims with one amputation

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Patrick Doyle is a writer and editor who lives in Pittsburgh. He is a contributing editor at MATTER and the former executive editor of Boston Magazine.