Two big “research” charities

 

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Tuesday, May 18th, 2010 at 10:04 am

How the American Cancer Society and Susan G. Komen for the Cure spend their money

By Elie | |

This year, we’ve been looking into the cause of disease research. We’re trying to find outstanding organizations for donors interested giving to help out with research efforts to develop cures, or new treatments, to cancer and other diseases.

We figured that a logical place to start would be with two big-name organizations: the American Cancer Society and Susan G. Komen for the Cure. The first question we asked was “What do they do?”, and the first thing we found surprised us: funding research into cures or new treatments is a relatively small part of their activities.

American Cancer Society

The American Cancer Society’s 2008 IRS Form 990 demonstrates that ACS is not primarily a research organization.

The following chart shows a breakdown of the American Cancer Society’s Program expenses in 2008; explanatory notes follow. (Note these figures include the payments to affiliates — which themselves account for about 1/3 of the American Cancer Society’s expenses — according to the breakdown in Statement 7 of the 990.)

The 990 offers these notes to explain the different categories (quoted from Part III of the 2008 990):

  • Patient support: Programs to assist cancer patients and their families and ease the burden of cancer for them.
  • Prevention: Programs that provide the public and health professionals with information and education to prevent cancer occurrences or to reduce the risk of developing cancer. (My emphasis)
  • Detection/treatment: Programs directed at finding cancer before clinically apparant & that provide information about cancer treatments for cure, recurrence, symptom management, and pain control.
  • Research: Financial support provided to academic institutions and scientists to seek new knowledge about the causes, prevention. and cure of cancer, and to conduct epidemiological and behavioral studies.

Susan G. Komen for the Cure

Susan G. Komen’s 2008 audited financials paint a similar picture: it is not primarily a research (or research-funding) organization.

The chart below shows Komen’s 2008 program expenses, which include the central organization’s activities as well as those of the affiliates.

Komen’s 2008 Form 990, Schedule O offers additional explanation about the “public health education” category. The following is taken from the beginning of the section discussing its public health education program:

Komen has formed advisory councils to address the breast health and breast cancer needs of people from different cultures and backgrounds… We have developed a variety of educational materials for specific audiences in English and most are also available in Spanish… Examples of our education materials include – Breast Self-Awareness (BSA) cards in 12 languages for 14 specific audiences – General breast health and breast cancer brochures and fact sheets – Booklets with support information for survivors and co-survivors – Outreach resources including breast self-awareness information in CD-ROM, DVD or VHS formats.

Bottom line

We haven’t yet established anything about whether the American Cancer Society or Susan G. Komen is effective (or ineffective) at accomplishing their missions.

But we, at least, have been surprised by this fairly basic information.

  • Both organizations seem to spend relatively small portions of their funds on researching new treatments or cures.
  • Both organizations spend significant portions of their funds on “raising awareness” type activities.

I personally feel more negative on the two charities as a result of this basic check, because (a) I find research into cures/treatments as having a potentially huge upside in humanitarian terms, while public education and provision of existing treatments (in the developed world) don’t seem nearly so promising to me; (b) the “education” type activities are a red flag to me that research, specifically, may not have room for more funding.

Others may disagree, and I may change my mind after getting more information. But I wonder how many of the donors to these organizations have considered the variety of different activities that “fighting cancer” can mean, and considered whether they’d rather give to an organization that’s focused on a particular one of them.

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31 Responses to “How the American Cancer Society and Susan G. Komen for the Cure spend their money”

1

Nick says:

May 18th, 2010 at 11:28 am

I am somewhat surprised by your assessment of these organizations, although I am pleased that you have gone beyond the Program/Overhead ratio analysis that pervades most charity analysis.

There was an article in last week’s New Yorker about the incredible difficulty of developing new cancer drugs. I don’t think this is an argument against research, but it speaks to the extraordinary costs of developing treatments. Also, successful new cancer treatments are incredibly lucrative financially, so there is a greater amount of private capital dedicated to this type of research.

From my understanding, one of the greatest determinants of cancer survival rates is early detection. If this is true, than it makes sense to spend public and charitable dollars on public education campaigns. The more people who understand how to access health information and cancer screening services, the more lives can be saved by existing treatments.

2

Jason Fehr says:

May 18th, 2010 at 11:38 am

Elie,

Thanks for the information.

Did you find anything specific on where the money they spend on research is going? If, say, Susan G. Komen spends 34% on research, how do they determine the recipients of that 34%?

Also, I’m not sure that their emphasis on educational activities suggests that research may not have room for more funding… I think you’re assuming that ACS and Susan G. Komen have carefully analyzed the research landscape and determined that there is only limited room for funding, leading them to devote more resources elsewhere. Although I’d be thrilled if that were the case, I doubt they’ve been quite that scientific about it when determining the breakdown of their activities.

3

Elie says:

May 18th, 2010 at 11:48 am

Nick, our point is only that donors who specifically want to support the development of new cures or treatments should recognize that the two organizations above are not primarily focused on that activity.

4

Seth Blumberg says:

May 18th, 2010 at 4:01 pm

My layman’s impression is that research into prevention (e.g. early detection) is underfunded and has more potential to save lives. Makes sense economically: you make more money curing already-sick people than keeping healthy people healthy.

Here is the Wired story that put this idea in me head.

5

Elie says:

May 18th, 2010 at 4:25 pm

Jason, we haven’t yet asked them how they decide which projects to support.

Seth, I don’t have the same intuition as you — I wouldn’t expect any systematic relationship between treatment vs. prevention and cost-effectiveness. Treatment has the advantage of providing resources solely to the people who need them.

6

Dario A says:

May 18th, 2010 at 8:43 pm

Seth and Nick, in addition to the point raised by Elie, it’s not at all clear that early detection and screening are actually effective in saving lives from cancer. Detection and screening have indeed been associated with increases in five-year survival rates, but this may be just an illusion – early detection means that the five year “clock” starts counting when the cancer is at a less advanced stage, so people will appear to survive longer even if the course of the disease (including the likelihood of eventually dying from it) hasn’t changed at all. The fact that age-adjusted cancer mortality (e.g. the fraction of the population of a certain age that dies of cancer each year) does not appear to have dropped much is very consistent with this interpretation.

There was a good post on this at Marginal Revolution last year, which addresses the Wired article that Seth brought up.

Given this background, I find ACS and SGK’s significant focus on prevention/detection to be especially unfortunate. Given that (a) there is a natural and quite human impulse to believe that if we just act responsibly and prudently we can ensure good health, (b) people have a very strong intuition that “an ounce of prevention is worth a pound of cure”, and (c) the data appear at first glance to suggest that prevention is effective, I can see why a lot of people might reasonably feel that money for detection is a good idea. But sadly, I think that in all probability it is likely a waste of money, at least at present (things could change in the future).

7

Jason Fehr says:

May 19th, 2010 at 9:42 am

Excellent points, Dario.

Yes, existing screening tests are only useful in a few very specific cases. Pap smears, colonoscopies, and mammograms, and even those only in certain populations. Many other screening tests have been tried, but most others have not been beneficial (too many false positives leading to removal of benign tumors, etc.) Remember the controversy last year regarding mammograms for women in their 40’s? Expanding screening tests beyond these populations would be actively harmful.

Also, I’m not sure how useful raising awareness of cancer would be…a person only needs to see their doctor to be told which tests to get (if any) and when.

There are only a handful of behavioral changes that really make a difference in preventing cancer (smoking, IV drug use leading to hepatitis, sunscreen) but overall, there’s not much you can do to prevent it, in stark contrast to heart disease.

One last thing…not sure why people think a preventative medication/test would not be lucrative for the inventor…statins and Plavix are basically preventative measures, and they’re some of the most lucrative drugs.

8

Boucher says:

May 19th, 2010 at 1:53 pm

I think a lot of cancer are preventable and are linked to products that are being pushed by various industries that don’t pay the real cost of their activities: it is true for tobacco, alcohol and probably many other industrial foods and drinks as well as chemicals in our environment. Considering the number of people impacted and prematurely killed by tobacco and the proportion of cancers that are tobacco related it seems to make sense to push for better regulation and maximal prevention: California with a smoking prevalence around 12% is a key example. How about assessing the spending by comparing the amounts allocated to the number of patients/victims involved?
In any case, putting a premium on research does not appear to be the most effective way to deal with cancers that can be prevented as progress -unfortunately- has been very limited in terms of cure. Not a very optimistic thought but a realistic one?

9

Bill says:

May 19th, 2010 at 2:18 pm

I can’t speak for Komen, but I did work for ACS about a decade ago for a period of 3 years. I’m not invovled with them now, and don’t consider myself a loyalist by any stretch.
That said, I think you need to look not just at the 2 more prominant cancer nonprofits, but also at the broader area of cancer research. The National Cancer Institute has over $4.8 Billion at their disposal for cancer research, which is over six and a half times ACS’s entire budget… for everything.

With it’s limited funds, ACS chose a strategy that leverages it’s strengths. The limited research budget goes to small, promising and/or innovative projects that generally don’t get funded by the federal government, filling a much needed niche. Your comments notwithstanding, early detection and prevention and advocacy work goes a long way to reducing the incidence and survivability of cancer. In NYC, ACS was at the front of the parade to get smoke free workplace (including bars and restaurants)legislation enacted. Edcuation that encourages men and women to get colonoscopies works for one of the more preventable and treatable cancers if caught early, and deadly if caught late.

pI agree with an earlier post that lauds you for going beyond income and expense, but as you say a lot more research needs to be done.

10

Bill says:

May 19th, 2010 at 4:03 pm

As a charity that has been awarded 4 stars by Charity Navigator, it is our belief that funds spent on education are every bit as important as the money invested in research. What good are therapeutics if patients are poorly educated about about their disease and how to deal with it? If physicians are not proactively engaged, how will the next generation of researchers be encouraged to conduct experiments aimed at specific cancers? As for awareness, at the time of diagnosis, most patients know very little about how best to deal with their cancer. Programs that address this are valuable, too.

11

Brenda Johnson says:

May 19th, 2010 at 5:42 pm

Thanks for posting this article. It was really interesting to see the breakdown to this level for such a major brand organization. Although the public education component was vastly larger a percentage than I expected, I tend to believe Komen for the Cure is operating very close to optimal and in line with stated mission, goals and objectives.

12

Amy S. says:

May 20th, 2010 at 12:28 pm

I work for the American Cancer Society and people I meet are often surprised at how broad our mission is and how much we actually accomplish. We have learned so much about how to prevent and detect cancer in the more than six decades we’ve been funding cancer research. As Bill rightly points out, the American Cancer Society has used that knowledge to change societal norms, promote proven cancer screenings and encourage healthy lifestyles to save lives from cancer. In fact, more than 50 percent of cancer deaths could be avoided if we did all of the things we know to reduce cancer risk. We have seen these efforts pay off in the continued declines of cancer incidence and mortality rates since the early 1990s.

That said, it’s important for your readers to know that the American Cancer Society continues its strong commitment to cancer research — we are the largest private funder of cancer research, second only to the federal government. We are also proud to say that we are as tough on ourselves as we are on the disease we fight, holding ourselves accountable to aggressive goals. We make our Strategic Plan and progress report available to the public on our Web site every year which you can find here http://tiny.cc/1e2e0.

13

Tanya says:

May 20th, 2010 at 4:36 pm

Anyone interested in this topic and how Komen approaches “the cure” should read the book “Pink Ribbons, Inc.” for a fascinating look into the race and gender politics of breast cancer prevention organizations.

I agree that just putting public awareness out there doesn’t necessarily help people who already have the disease. The biggest issue I have with the current take on awareness (which usually means advocating for people to get tested) is that it doesn’t address the environmental causes of cancer. It’s not just lifestyle choices that matter, it’s also chemicals and plastics that we are in contact with everyday.

Sometimes it is the same corporations that are promoting their products with the pink ribbon (for example Ford’s Warriors in Pink campaign) that are also producing the pollution that can cause health problems.

Just a couple more things to add to the great discussion…

14

Dario A says:

May 21st, 2010 at 2:41 pm

Just wanted to voice a bit of skepticism about many of the views expressed above:

First, there is serious doubt about whether chemicals in the environment, with the exception of asbestos (which really is very carcinogenic), are a major cause of cancer. Here, for example, is a skeptical point of view (with which I don’t necessarily fully agree).

Second, while smoking really is the single largest cause of cancer (a third of all cancers is the number I’ve seen), it’s not at all clear that secondhand smoke is a major cause of cancer. The data are questionable, and anecdotal – I’ve gotten the impression that the public health community trumps up the risks of secondhand smoke as a (well-intentioned) attempt to make people feel more guilty about smoking and thus smoke less. So the value of ACS’s efforts to ban smoking in the workplace are not above reproach.

Third, public education campaigns are only as good as the message they send. If screening/detection is of limited value, then campaigns to promote it will of course also be of limited value. Raising awareness of a disease could in theory be useful, but there’s a zero-sum component to it – public attention is a finite resource and drawing attention to one disease can just reduce attention to others (which may be no less important). Finally, public campaigns to reduce smoking can save lives if they are effective, but smoking is addictive and behaviors are hard to change – it’s not clear to me just how cost-effective such efforts are (data on this would be very useful).

Like Elie I have the intuition that research is the most potentially promising avenue, and the low percentages devoted to research by these organizations suggests that they may not be finding much worthwhile, unfunded research.

15

Elie says:

May 23rd, 2010 at 6:24 pm

Thanks for the comments. We’re planning to continue our research into and discussion of disease research organizations in future posts.

16

Dan Pallotta says:

May 24th, 2010 at 3:50 pm

Elie,

Many organizations allocate a portion of their special event costs to education and awareness for the cause, and those expenses enlarge the educational component of their organizational pie chart as a result. Organizations that are particularly dependent on special event fundraising and that allocate educational event costs in this way may show higher educational costs overall.

You might check out the Tinkelman case study on the Pallotta TeamWorks website which looked in particular at the way Avon was allocating costs on its events. Full disclosure: Dan Tinkelman was expert counsel for Pallotta TeamWorks in litigation against Avon.

17

Elie says:

May 25th, 2010 at 8:32 am

Dan, thanks for the comment.

I briefly looked at the Tinkleman case study (PDF) you mentioned, and it seems the main point is that organizations (including Komen, which is mentioned specifically) have a strong incentive to minimize reported fundraising costs (due to the prominence of the overhead metric as a standard for evaluating charities).

Are you saying that it’s more appropriate to consider the education/awareness activities as fundraising for the organization itself rather than a distinct program activity?

Based on the description Komen provides of its “education” activities, I wouldn’t guess that events, specifically, account for the majority of that category’s expenses.

In addition, page 2 of the Tinkleman case states, “Komen does not run the events itself. Its financial statements report only the net proceeds it receives, without reporting any of the related event expenses.” That is, event costs are sometimes not reported at all as they’re “run” by other organizations.

18

Dan Pallotta says:

May 25th, 2010 at 10:58 am

Hi Ellie,

Well, as you know, I think the whole system is broken. I think it’s fine – actually proper – for certain expenses associated with events to be categorized as mission expenses, so long as the fact that it’s being done that way is made transparent to the donor. In other words, I don’t think it’s cool to tell a donor 80% goes to the cause when the donor things “the cause” is, for example, diabetes research, when in fact what the organization means is research and education, and only 50% is really going to research.

I believe Komen now runs their events on their own, but that may just be starting – so you are probably correct that there were no event-related educational expenses showing up in their educational expenses.

19

Cheryl Jernigan says:

June 3rd, 2010 at 2:14 pm

This is Cheryl Jernigan, and I’m an Advocate in Science for Susan G. Komen for the Cure, that is, I am a breast cancer community advocate who helps guide Komen for the Cure’s research program. Komen has operated for nearly 30 years on the promise to discover and deliver the cures for breast cancer. Such a commitment has to be multi-faceted — touching every area of this disease, from research to education to treatment and support for the people who are living with the disease today. The $500 million we’ve invested in research so far has led to advances in early detection, screening, treatments like tamoxifen and to less invasive treatments like lumpectomies rather than mastectomies for many women. Now, Komen is focused on the research that has the best chance of translating into clinical practice and cures within 10 years. Research is a critical component of our mission and always has been. But research alone won’t save lives. People need to be able to access the research, and they need knowledge, so Komen has invested another $900 million into programs to help people get educated, get access to screening and treatment if they can’t afford it and get help through treatment and beyond. It helps, if you’re considering which programs to support, to look at what an organization invests in its total mission. All told, 84 cents of every dollar Komen raises gets re-invested into that total mission to discover – and deliver – the cures.

20

Elie says:

June 4th, 2010 at 9:17 am

Hi Cherly,

Thanks for commenting. I’m particularly interested in something you wrote:

“The $500 million we’ve invested in research so far has led to advances in early detection, screening, treatments like tamoxifen and to less invasive treatments like lumpectomies rather than mastectomies for many women.”

We’re very interested in Komen’s assessment of its track record of success for funding research. Can you point us to more information about the role Komen played in the development of tamoxifen and the impact tamoxifen has had on breast cancer? What advances in early detection has Komen caused and to what degree have these prevented suffering from cancer?

More broadly, do you have a more comprehensive assessment of the impact of the research you’ve funded? For example, I’d be interested to know if, say, you’ve done a citation analysis of the research you’ve funded. That is, are papers published due to Komen funding heavily cited by other scientists? What other measures do you use to evaluate the effectiveness of your research funding and how does Komen perform on those measures?

21

Heidi says:

March 3rd, 2011 at 12:21 pm

I am a 5 time cancer survivor.I have never had the “PINK” kind (Breast) I wouldn’t be here if it wasn’t for early detection & research.

I find it offensive that so many companies jump on the pink band wagon. Researching only 1 type of cancer?! Really? There are more than 200 different types of cancer. Who is researching those? Not KOMEN!

The American Cancer Society has been around for almost 100 years. They are the #1 funder for cancer research next to the Government. They have had a hand in every major cancer break through. The PAP, PSA Screening, Mamogram, all the different drugs being used. They have funded 44 Dr.s that have won Nobel Prizes.
The ACS holds a non for profit tax status. Komen doesn’t.

Personally, I want all cancer to be researched, not just breast cancer.

22

Eric says:

March 31st, 2011 at 11:50 am

“All told, 84 cents of every dollar Komen raises gets re-invested into that total mission to discover – and deliver – the cures.”

What does “”re-invested” mean, Cheryl Jernigan? What are the expenses? Investments have expenses.

I am very skeptical about any of these fund raisers. There is no real financial statements easily accessible showing the bottom line: How much money NET and how that is distributed. Seems to me the companies producing TV commercials and printing T-Shirts are making money. Everyone wants to run around and say how far they walked to raise money for cancer, but how many of those people actually directly help a person with cancer? Wouldn’t that time and money be better spent giving it directly to a person that has the disease? We live in a society that is great about promoting information, everyone refers you to some organization that has information. But what about getting actual help from a live person who does the cooking and the ass wiping for the dying patient? Seems the “work” is left to the laborers at the bottom of the medical industry while the rich “go for a walk” to shed a few pounds in the name of “charitable awareness efforts” and do “fund raisers” that serve meals and drinks full of cancer causing chemicals. When my wife was dying of brain cancer, (and my son who has Autism) needed my help, I didn’t run off and do any fund raisers because I had no time or money to do that sort of pointless exhibition, I had to roll up my sleeves and take care of them. Instead of walking around in a new pink ribbon T-Shirt, those people should walk over to a hospital and lend a hand and write a check directly for the patient’s medical bills!

23

Valerie says:

April 14th, 2011 at 7:43 am

Do the AMC and Susan B Komen work together? If I like one but not the other, will my donations go to both?

24

John Leung says:

April 16th, 2011 at 3:16 pm

Regarding Cancer Society, what is the percentage of total outlay that goes to actual charity compared to administrations and fund raising activity.

Of all the money that was spent on research, has any of the money produced results, after so many many years. What are they, if any.

If any of the drugs invented has been funded by Cancer society, why is it still so very expensive.

Thanks

John Leung

25

Winifred Ramsey says:

April 20th, 2011 at 3:24 pm

I read this report for a class speech and I do not think the ACS is doing a bad job on their funding. My uncle is currently dying of cancer that went undetected by his doctor for a year until it had metastasize to other parts of his body. Research is a important part of understanding the disease but money is also needed to teach doctors and patients the warning signs, and the prevention funding helps to acknowledge what is needed to be done to prevent such cancers like lung cancer,mouth cancer etc. Patient support helps the patient understand they are not alone and sometimes that thought is all they have to hold on to. So, even though the funding doesn’t seem well spread out or focusing on important parts like research each part to a cancer patient and their family is important.

26

Angela says:

May 26th, 2011 at 10:52 am

If you look more into the American Cancer Society you will find they funded the researchers of the PapSmear, Glevac, Tomaxifin (sp), and CemoTherapy as well as the CatScan. You will also find that only about 3% goes into management and facility costs with over 80% going directly to help patients, research and awareness. Please do more research… www.cancer.org before being negative

27

marbee says:

October 30th, 2011 at 11:38 pm

Of COURSE the ACS and Cancer.org will SAY they spend money on research! Bottom line, they don’t. Take breast cancer, they say mammograms “prevent” BC due to early detection. Most tumors turn out to be false positives. Annual exams increase the risk by 2% per year, over 10 years that’s 20% increased risk. Here’s the math: a $150 mammogram for 70 million American women over 40 amounts to $10 BILLION per year for the industry. Can you imagine this kind of money disappearing from that industry? Do you really think they would let it! They use a cancer causing machine, and before you die, you get to spend all your money on “treatments” for cancer CAUSED by that machine, that will leave you bankrupt first, dead next. Pretty profitable, I’d say!

28

marbee says:

October 30th, 2011 at 11:44 pm

hmmmm, the way I read the tax return, they spent $390,305,361 on salaries, pensions, benefits and payroll taxes while spending a mere $4,406,038 on research. They spent more than 4 TIMES the research amount attending conferences ($18,158,259). The ACS Action Network is the “advocacy arm” for big pharma and also own millions of dollars worth of tax exempt real estate. They lobby for Robert Wood Johnson Foundation. The RWJF was created by the founder of Johnson and Johnson. As of their 2009 annual report, RWJF owned 42,343,491 shares of JnJ stock. RWJF has give half a billion dollars in “grants” for tobacco-control/smoking bans. So, who do you think has the market cornered on nicotine REPLACEMENT therapy products? JOHNSON & JOHNSON. The American Cancer Society, American Heart Association and American Lung Association split a $99,000,000 tobacco control grant. According to RWJF, THEY CREATED and FUNDED Tobacco Free Kids. Their start-up grant was $84,000,000. So you see, all these organizations got money from the “non-profit” of J&J that owns J&J stock who profits from big pHARMa’s form of nicotine. And our nation’s business owners are losing their livlihoods to this fraud with smoking bans for the profit of pharma!

29

Donna says:

October 31st, 2011 at 4:43 am

If you follow the dictates that are passed down through various organizations TO various organizations, you will find that the funding comes from places like the Robert Wood Johnson Foundation in the form of grants. That is the Johnson and Johnson Empire of 250 pharmaceutical companies. If they had a cure, they would loose money. However, to provide ‘counseling’ of how to take your medicines and advise for specific tests, it puts money into their pockets. … The RWJF is Johnson and Johnsons foundation, JnJ owning at 250 pharmaceutical companies. They set up ‘Tobacco Free Kids’ with at $84 million as their lobby group. The Johnson and Johnson Empire makes the no smoke products. …. Follow them for the ‘obese’ and other issues. … Merchandising is now population control!

30

marbee says:

October 31st, 2011 at 4:10 pm

How many days must my comments be under moderation? I can back up everything I say.

31

eyelid says:

February 1st, 2012 at 4:31 pm

Cheryl, your comment seems like doublespeak to me.

“Research is a critical component of our mission and always has been. But research alone won’t save lives. People need to be able to access the research, and they need knowledge”? What does that mean? I think most people believe that “research” means “research trying to find a cure for breast cancer.” I assume that if you manage to find a cure for cancer, everyone will know about it and there will be no need for an education campaign.

I agree that people would need help accessing such a cure (health care costs are enormous), but you haven’t found it yet, so you’re putting the cart a bit before the horse!

As for making screening available to low-income people, I take your committment to such things with a grain of salt, given that you just cut your funding for cancer-related screening from Planned Parenthood.

If you’re talking about awareness of cancer generally (what “research” is involved there, I don’t know), I think everyone’s already aware of cancer.

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