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- Hoarding Wealth, not Preventing Cancer
" more interested in accumulating wealth than saving lives." Chronicle of Philanthropy
The American Cancer Society’s mission statement says it is dedicated to "preventing cancer and saving lives—through research education, advocacy, and service." Yet what the Society seems to do best is accumulate wealth. According to James Bennett, a professor of economics at George Mason University who tracks charitable organizations, the American Cancer Society (ACS) held a fund balance of over $400 million with about $69 million worth of holdings in real estate, office buildings, and equipment in 1988. ("How raw land helps us find a cure for cancer or helps cancer victims is an enigma I can't fathom," says Bennett.) Of that money, the ACS spent only $90 million—barely a quarter of its budget—on medical research and related programs. The rest covered "operating expenses," including about 60 percent for salaries, pensions, executive benefits, and overhead. By 1989, ACS cash reserves had reached over $700 million.
In a 1992 Wall Street Journal article, Loyola University professor of economics Thomas DiLorenzo charged that a high percentage of funds raised by the ACS went to pay overhead, salaries, benefits, and travel expenses for national executives in Atlanta. For every ACS affiliate, salaries and fringe benefits were by far the largest single budget item. Most direct services were provided by volunteers. For every dollar spent on direct community services, such as driving cancer patients from the hospital after chemotherapy and providing pain medication, approximately $6.40 was spent on compensation and overhead. At most, 16 percent of all money raised nationally was spent on direct services. Yet Society fundraising appeals routinely asked for more funds to support their cancer programs.
" If current needs are not being met because of insufficient funds, as fundraising appeals suggest," asked DiLorenzo, "why is so much being hoarded? Most contributors believe their donations are being used to fight cancer, not to accumulate financial reserves. More progress in the war against cancer would be made if they would divest some of their real estate holdings and use the proceeds—as well as a portion of their cash reserves—to provide more cancer services."
Things haven't changed much since DiLorenzo's findings. By 1998, based on the Society's annual budget report, revenues had reached $677 million. In 1998, the Society spent some $140 million on "supporting services" such as overhead, salaries in the $220,000 range for regional directors (national executives' salaries are not disclosed), benefits and travel expenses, fundraising, and public relations. It had $800 million in reserves.
The Society's penchant for storing wealth over funding research and services prompted the Chronicle of Philanthropy, a watchdog organization that monitors major charities, to analyze its budgets and programs. The Chronicle concluded that the American Cancer Society is "more interested in accumulating wealth than saving lives."
Excerpted from “The High Stakes of Cancer Prevention” by Samuel Epstein and Liza Gross, Tikkun Magazine, Nov/Dec 2000www.Tikkun.org
More on ACS: “The World’s Wealthiest ‘non-profit’ Organization”
Samuel S. Epstein, M.D.
Cancer Prevention Coalition
University of Illinois at Chicago
School of Public Health
2121 W. Taylor St., MC 922
Chicago, IL 60612