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Jobs for the Cure: Does Your Donation Go to Cancer Research or Salaries and Overhead?

Tuesday, 12 June 2012 09:46 By Ellen Leopold, Truthout | News Analysis

Do you support Truthout's reporting and analysis? Click here to help fund it this week!

American Cancer Society building in Atlanta, Georgia.American Cancer Society building in Atlanta, Georgia. (Photo: thinkingjosh)Even after the Komen Foundation's withdrawal of funding from Planned Parenthood, many women still think it should be possible to "keep politics out of breast cancer." As one Race for the Cure veteran put it, they cling to their "collective ignorance" as "a kind of bliss," and wish they could "un-bite the apple."

Why is it so hard to accept the idea that cancer philanthropy is as rife with contradiction and partisan conflicts as any other enterprise with large amounts of money at its disposal? Why do we insist on giving them a pass? Have they cast a spell on us?

All charities that address disease tap into a vein of magical thinking, exploiting the atavistic hope that donations might win favor with a higher power, ward off the evil eye, buy us - or a loved one - time. Politics can have no place in a world where the relationship between giver and receiver is presumed to be personal and where the stakes are so high.

No disease is more likely to provoke this response than cancer. Demonized for a thousand years, it remains a virulent force in the public imagination, still able to derail the rational thinking of otherwise reasonable people. And no organization has done more to capitalize on this reaction than the American Cancer Society. With its origins lost in the mists of time (1913), it enjoys the protected status of a national icon, above the political fray.

Despite the billions of dollars that government agencies pour into research, in funding that dwarfs private giving, Americans still believe that it is their own money that might make the difference, that will turn the tide of research toward the ultimate cure. So, they give and they give again, unwilling to question the illogical impulse that drives much of this behavior.

Over the past few decades, scores of new cancer charities have sprung up, tapping into this propensity to give. Charity Watch, the philanthropy watchdog that evaluates nonprofits, gives a failing grade to many groups with names designed to snare the unwary - the F-rated American Breast Cancer Foundation and United Breast Cancer Foundation, for example, are easily confused with the A-rated Breast Cancer Research Foundation. Despite obvious warning signs and some pending lawsuits, such operations still manage to pull in millions. We are clearly not paying attention.

The American Cancer Society (ACS) aggravates the problem by overstressing personal responsibility. Instead of pointing the finger at environmental toxins and encouraging Americans to make common cause against them, the ACS places the burden of prevention on individuals. Fundraising campaigns target unhealthy "lifestyles" as the source of most cancers. This is essentially victim blaming before the fact; if you fail to shape up - to stop smoking, drink less, exercise more, get screened - and a diagnosis follows, you have only yourself to blame. Never mind that known risk factors can explain only half of all cancer diagnoses or that early detection does not always save lives. By reminding us of our shortcomings, "awareness" campaigns keep us on the hook for donations.

They also keep the inner workings of these charities well in the background. We make our pledges to the cancer gods - not to faceless bureaucrats in the back room. If we think about it at all, we probably picture the ACS as a coordinator of volunteers and an efficient middleman, bundling and redistributing donations at minimal cost. The ACS promotes this image, defining itself as "the largest voluntary health organization in the United States."

What it does not advertise is the fact that it is also the largest employer of paid staff in the nonprofit cancer world. The ACS employs close to 9,000 people nationally - almost 2,000 at its Atlanta headquarters alone and the rest in its 12 divisional offices.(1) In 2010, the ACS reported expenses of over $500 million in salaries, benefits and payroll taxes. Just to be clear, that is $500 million in donations, not a penny of which leaves the building. Added to that is ACS's accumulated pension obligation; at $600 million, it is three times the charity's outstanding commitments to cancer research.

These are sobering statistics, suggesting the importance that ACS attaches to its own survival. But they won't stir up the ideological debate triggered by Komen's withdrawal of support for Planned Parenthood. That revelation made us face up to the fact that breast cancer philanthropy is "political," whether we like it or not. But it's one thing to follow the money going out of the Komen Foundation and quite another to follow it going in, with the door closing behind it. Unless or until the money re-emerges in some identifiable form and is directed toward some known recipient, there's little to attract our attention.

This does not excuse our complaisance. The fattening of cancer charities on our unacknowledged fears needs to be openly acknowledged. Even if we can't identify the programs that have suffered as a result, we can acknowledge the scale of the resources withheld, resources that might have gone - every year - to programs supporting, for instance, better access to quality care (including grants to Planned Parenthood, which the ACS has supported in the past).

What do ACS employees actually do for that $500 million payout? According to its financial statements, about a quarter of it is dedicated to fundraising. This does not include fees paid to professional fundraisers, who work as outside consultants. Nor does it include the work of volunteer fundraisers, who may also solicit donations over the telephone and elsewhere. Of course, volunteers carry out many other tasks as well, helping to run a wide range of programs and services - providing rides to treatment, offering postoperative advice and support, organizing fundraising events, staffing online support communities etc. The serious business of allocating research grants is also primarily undertaken by volunteers, cancer scientists who give their time and expertise for a modest honorarium. So, where does volunteer work end and paid employment begin? And how has this boundary shifted over time? It would be good to know.

There is no fixed linear relationship among a charity's revenues, its staffing requirements and its programming. More money coming in does not necessarily require more paid staff to administer it. This is especially true when a greater share of donations comes in larger bundles from corporate donors rather than from individuals. Of course, outsiders are not privy to a charity's internal decision-making so it's impossible to know how the ACS apportions increasing revenues between the maintenance or expansion of its own workforce and the growth of external programs and grants. Its audited financial statements, however, do reveal that when revenues contract, as they did during the recent recession, the charity's response was to reduce the total value of its program grants by more than it reduced its payroll. It also significantly curtailed its use of outside consultants; between 2008 and 2010 "professional fees" dropped by 21 percent, while payroll costs fell by less than 2 percent.

None of the factors normally linked to corporate growth - productivity gains, economies of scale, product innovation - explain the increasing prosperity of the ACS. Analogies with the private sector are, in any case, misplaced, despite the extravagant compensation for ACS top executives that has become such a hallmark of corporate excess. Since the charity is not accountable to shareholders nor subject to any market discipline nor, for the most part, regulated by government, its size is limited only by the willingness of Americans to continue funding it, no questions asked - and by the general health of the American economy.

In fact, the charity's phenomenal growth is primarily the consequence of demographic change for which it can hardly claim credit. It is the inexorable logic of a growing and aging population that accounts for much of the increased "demand" for its services.

The absolute number of Americans afflicted by cancer (the natural constituency of all cancer charities) has grown steadily over the past century - an estimated 1.6 million new diagnoses are expected this year - even as the incidence and mortality rates of some individual cancers have declined. The death rate for breast cancer, for example, has fallen since 1990 while the actual number of women diagnosed with the disease continues to rise. Improved treatments will keep most of them alive for longer. In the United States, there are an estimated two and a half million women now living with breast cancer, and another two million men with prostate cancer. Their health status - including the ever-present threat of recurrence - is now out in the open, casting a more diffuse if no less menacing anxiety over everyday life.

What feels to many like an epidemic intensifies the anxieties of those who have so far been spared. They may see themselves - and their own good fortune - at the center of a circle of loss, one that can only widen with age. What better way to atone for their "survival" and show solidarity with those less blessed than to participate - and to be seen participating - in public fundraising events sponsored by the likes of the ACS and Komen?

The proliferation of these events has vastly extended the reach of cancer charities, bringing a much wider circle of friends and family on board. The walks and runs clearly breed a sense of solidarity among their participants. Magical thinking converts this collective goodwill into a belief that strength in numbers can, by itself, somehow shift the odds on behalf of those at risk. Event organizers capitalize on this hope, keeping the focus squarely on the events themselves. The substantial infrastructures that operate behind the scenes, that take in the massive sums raised by participants, remain well out of sight.

Whether the dynamic at work in the ACS represents either an effective or ethical use of charitable donations has long been of concern to well-placed insiders. Dr. Clarence Cook Little, the charity's acting director, in 1930, complained that he saw nothing that could justify "the maintenance of an expensive central office or ... the use of tens of thousands of dollars for that purpose ... There is a great waste of time, money and energy in the present system."(2)

Inefficiencies also arise from conflicts of interest and duplication between head and divisional offices. In 1944, when the ACS decided to fund cancer research, it assigned responsibility for the new program to its national office. All regional operations would henceforth be required to remit 40 percent of their locally raised funds to ACS headquarters, establishing a hierarchy and a division of labor which remain in place today. Affiliates would now have to raise funds to cover two bureaucracies, a mandate that inevitably limited the programs they were able to deliver on the ground. With 40 percent sliced off the top and a further 15 percent devoted to local overheads, only half of any gift could really be put to work at its source.

The original idea was that 25 percent of all funds raised would be allocated to research and the additional 15 percent would cover headquarter expenses. Today, these proportions have been reversed; the share allotted to research is about 15 percent, while the portion of the budget spent by the national home office (excluding all grants and awards) has climbed to more than 30 percent. (Such funding arrangements abound in national charities. The Komen Foundation works on a similar basis, but with a 25 percent/75 percent income split between the home office in Texas and its affiliates across the country.)

In the ten years following the introduction of the postwar revenue-sharing policy, the paid workforce at the ACS national office grew from 10 to 175 employees. John Reed Kilpatrick, in the mid-1950s the chairman of the ACS's New York Committee, protested "the continuing rapid growth of our National staff." "I have never been able to learn why a large staff is needed for service to the patient and fund-raising," he continued, "when they never render any service and raise no funds whatsoever."(3) A half century on, with a national office that is now ten times larger than it was in the 1950s, Kilpatrick's quandary remains as pressing as ever.

Footnotes:

1. Employment figures derived from IRS Form 990s for each of the 12 ACS divisions.

2. Clarence Cook Little, "Report of the Managing Director to the Board of Directors, American Society for the Control of Cancer," December 1930. Mary Lasker Papers, Butler Library Collections, Columbia University.

3. John Reed Kilpatrick, letter to Lowell Coggeshall, January 31, 1958. Mary Lasker Papers, Butler Library Collections, Columbia University.

Copyright, Truthout. May not be reprinted without permission.

Ellen Leopold

Ellen Leopold has been writing about the politics of cancer for 20 years. She is a member of Breast Cancer Action and has published two books on the subject: "Under the Radar: Cancer and the Cold War" (New Brunswick: Rutgers University Press, 2008) and "A Darker Ribbon: Breast Cancer, Women and their Doctors in the Twentieth Century" (Boston: Beacon Press, 1999). She has also written for The Prospect, The Nation and The Boston Globe, among others.


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Jobs for the Cure: Does Your Donation Go to Cancer Research or Salaries and Overhead?

Tuesday, 12 June 2012 09:46 By Ellen Leopold, Truthout | News Analysis

Do you support Truthout's reporting and analysis? Click here to help fund it this week!

American Cancer Society building in Atlanta, Georgia.American Cancer Society building in Atlanta, Georgia. (Photo: thinkingjosh)Even after the Komen Foundation's withdrawal of funding from Planned Parenthood, many women still think it should be possible to "keep politics out of breast cancer." As one Race for the Cure veteran put it, they cling to their "collective ignorance" as "a kind of bliss," and wish they could "un-bite the apple."

Why is it so hard to accept the idea that cancer philanthropy is as rife with contradiction and partisan conflicts as any other enterprise with large amounts of money at its disposal? Why do we insist on giving them a pass? Have they cast a spell on us?

All charities that address disease tap into a vein of magical thinking, exploiting the atavistic hope that donations might win favor with a higher power, ward off the evil eye, buy us - or a loved one - time. Politics can have no place in a world where the relationship between giver and receiver is presumed to be personal and where the stakes are so high.

No disease is more likely to provoke this response than cancer. Demonized for a thousand years, it remains a virulent force in the public imagination, still able to derail the rational thinking of otherwise reasonable people. And no organization has done more to capitalize on this reaction than the American Cancer Society. With its origins lost in the mists of time (1913), it enjoys the protected status of a national icon, above the political fray.

Despite the billions of dollars that government agencies pour into research, in funding that dwarfs private giving, Americans still believe that it is their own money that might make the difference, that will turn the tide of research toward the ultimate cure. So, they give and they give again, unwilling to question the illogical impulse that drives much of this behavior.

Over the past few decades, scores of new cancer charities have sprung up, tapping into this propensity to give. Charity Watch, the philanthropy watchdog that evaluates nonprofits, gives a failing grade to many groups with names designed to snare the unwary - the F-rated American Breast Cancer Foundation and United Breast Cancer Foundation, for example, are easily confused with the A-rated Breast Cancer Research Foundation. Despite obvious warning signs and some pending lawsuits, such operations still manage to pull in millions. We are clearly not paying attention.

The American Cancer Society (ACS) aggravates the problem by overstressing personal responsibility. Instead of pointing the finger at environmental toxins and encouraging Americans to make common cause against them, the ACS places the burden of prevention on individuals. Fundraising campaigns target unhealthy "lifestyles" as the source of most cancers. This is essentially victim blaming before the fact; if you fail to shape up - to stop smoking, drink less, exercise more, get screened - and a diagnosis follows, you have only yourself to blame. Never mind that known risk factors can explain only half of all cancer diagnoses or that early detection does not always save lives. By reminding us of our shortcomings, "awareness" campaigns keep us on the hook for donations.

They also keep the inner workings of these charities well in the background. We make our pledges to the cancer gods - not to faceless bureaucrats in the back room. If we think about it at all, we probably picture the ACS as a coordinator of volunteers and an efficient middleman, bundling and redistributing donations at minimal cost. The ACS promotes this image, defining itself as "the largest voluntary health organization in the United States."

What it does not advertise is the fact that it is also the largest employer of paid staff in the nonprofit cancer world. The ACS employs close to 9,000 people nationally - almost 2,000 at its Atlanta headquarters alone and the rest in its 12 divisional offices.(1) In 2010, the ACS reported expenses of over $500 million in salaries, benefits and payroll taxes. Just to be clear, that is $500 million in donations, not a penny of which leaves the building. Added to that is ACS's accumulated pension obligation; at $600 million, it is three times the charity's outstanding commitments to cancer research.

These are sobering statistics, suggesting the importance that ACS attaches to its own survival. But they won't stir up the ideological debate triggered by Komen's withdrawal of support for Planned Parenthood. That revelation made us face up to the fact that breast cancer philanthropy is "political," whether we like it or not. But it's one thing to follow the money going out of the Komen Foundation and quite another to follow it going in, with the door closing behind it. Unless or until the money re-emerges in some identifiable form and is directed toward some known recipient, there's little to attract our attention.

This does not excuse our complaisance. The fattening of cancer charities on our unacknowledged fears needs to be openly acknowledged. Even if we can't identify the programs that have suffered as a result, we can acknowledge the scale of the resources withheld, resources that might have gone - every year - to programs supporting, for instance, better access to quality care (including grants to Planned Parenthood, which the ACS has supported in the past).

What do ACS employees actually do for that $500 million payout? According to its financial statements, about a quarter of it is dedicated to fundraising. This does not include fees paid to professional fundraisers, who work as outside consultants. Nor does it include the work of volunteer fundraisers, who may also solicit donations over the telephone and elsewhere. Of course, volunteers carry out many other tasks as well, helping to run a wide range of programs and services - providing rides to treatment, offering postoperative advice and support, organizing fundraising events, staffing online support communities etc. The serious business of allocating research grants is also primarily undertaken by volunteers, cancer scientists who give their time and expertise for a modest honorarium. So, where does volunteer work end and paid employment begin? And how has this boundary shifted over time? It would be good to know.

There is no fixed linear relationship among a charity's revenues, its staffing requirements and its programming. More money coming in does not necessarily require more paid staff to administer it. This is especially true when a greater share of donations comes in larger bundles from corporate donors rather than from individuals. Of course, outsiders are not privy to a charity's internal decision-making so it's impossible to know how the ACS apportions increasing revenues between the maintenance or expansion of its own workforce and the growth of external programs and grants. Its audited financial statements, however, do reveal that when revenues contract, as they did during the recent recession, the charity's response was to reduce the total value of its program grants by more than it reduced its payroll. It also significantly curtailed its use of outside consultants; between 2008 and 2010 "professional fees" dropped by 21 percent, while payroll costs fell by less than 2 percent.

None of the factors normally linked to corporate growth - productivity gains, economies of scale, product innovation - explain the increasing prosperity of the ACS. Analogies with the private sector are, in any case, misplaced, despite the extravagant compensation for ACS top executives that has become such a hallmark of corporate excess. Since the charity is not accountable to shareholders nor subject to any market discipline nor, for the most part, regulated by government, its size is limited only by the willingness of Americans to continue funding it, no questions asked - and by the general health of the American economy.

In fact, the charity's phenomenal growth is primarily the consequence of demographic change for which it can hardly claim credit. It is the inexorable logic of a growing and aging population that accounts for much of the increased "demand" for its services.

The absolute number of Americans afflicted by cancer (the natural constituency of all cancer charities) has grown steadily over the past century - an estimated 1.6 million new diagnoses are expected this year - even as the incidence and mortality rates of some individual cancers have declined. The death rate for breast cancer, for example, has fallen since 1990 while the actual number of women diagnosed with the disease continues to rise. Improved treatments will keep most of them alive for longer. In the United States, there are an estimated two and a half million women now living with breast cancer, and another two million men with prostate cancer. Their health status - including the ever-present threat of recurrence - is now out in the open, casting a more diffuse if no less menacing anxiety over everyday life.

What feels to many like an epidemic intensifies the anxieties of those who have so far been spared. They may see themselves - and their own good fortune - at the center of a circle of loss, one that can only widen with age. What better way to atone for their "survival" and show solidarity with those less blessed than to participate - and to be seen participating - in public fundraising events sponsored by the likes of the ACS and Komen?

The proliferation of these events has vastly extended the reach of cancer charities, bringing a much wider circle of friends and family on board. The walks and runs clearly breed a sense of solidarity among their participants. Magical thinking converts this collective goodwill into a belief that strength in numbers can, by itself, somehow shift the odds on behalf of those at risk. Event organizers capitalize on this hope, keeping the focus squarely on the events themselves. The substantial infrastructures that operate behind the scenes, that take in the massive sums raised by participants, remain well out of sight.

Whether the dynamic at work in the ACS represents either an effective or ethical use of charitable donations has long been of concern to well-placed insiders. Dr. Clarence Cook Little, the charity's acting director, in 1930, complained that he saw nothing that could justify "the maintenance of an expensive central office or ... the use of tens of thousands of dollars for that purpose ... There is a great waste of time, money and energy in the present system."(2)

Inefficiencies also arise from conflicts of interest and duplication between head and divisional offices. In 1944, when the ACS decided to fund cancer research, it assigned responsibility for the new program to its national office. All regional operations would henceforth be required to remit 40 percent of their locally raised funds to ACS headquarters, establishing a hierarchy and a division of labor which remain in place today. Affiliates would now have to raise funds to cover two bureaucracies, a mandate that inevitably limited the programs they were able to deliver on the ground. With 40 percent sliced off the top and a further 15 percent devoted to local overheads, only half of any gift could really be put to work at its source.

The original idea was that 25 percent of all funds raised would be allocated to research and the additional 15 percent would cover headquarter expenses. Today, these proportions have been reversed; the share allotted to research is about 15 percent, while the portion of the budget spent by the national home office (excluding all grants and awards) has climbed to more than 30 percent. (Such funding arrangements abound in national charities. The Komen Foundation works on a similar basis, but with a 25 percent/75 percent income split between the home office in Texas and its affiliates across the country.)

In the ten years following the introduction of the postwar revenue-sharing policy, the paid workforce at the ACS national office grew from 10 to 175 employees. John Reed Kilpatrick, in the mid-1950s the chairman of the ACS's New York Committee, protested "the continuing rapid growth of our National staff." "I have never been able to learn why a large staff is needed for service to the patient and fund-raising," he continued, "when they never render any service and raise no funds whatsoever."(3) A half century on, with a national office that is now ten times larger than it was in the 1950s, Kilpatrick's quandary remains as pressing as ever.

Footnotes:

1. Employment figures derived from IRS Form 990s for each of the 12 ACS divisions.

2. Clarence Cook Little, "Report of the Managing Director to the Board of Directors, American Society for the Control of Cancer," December 1930. Mary Lasker Papers, Butler Library Collections, Columbia University.

3. John Reed Kilpatrick, letter to Lowell Coggeshall, January 31, 1958. Mary Lasker Papers, Butler Library Collections, Columbia University.

Copyright, Truthout. May not be reprinted without permission.

Ellen Leopold

Ellen Leopold has been writing about the politics of cancer for 20 years. She is a member of Breast Cancer Action and has published two books on the subject: "Under the Radar: Cancer and the Cold War" (New Brunswick: Rutgers University Press, 2008) and "A Darker Ribbon: Breast Cancer, Women and their Doctors in the Twentieth Century" (Boston: Beacon Press, 1999). She has also written for The Prospect, The Nation and The Boston Globe, among others.


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