St. Jude hid $886 million in unspent revenue last year — ProPublica

In July 2021, St. Jude Children’s Research Hospital announced with fanfare that it had just raised $2 billion in donations, a single fiscal year record for the nation’s largest health care charity. “Solving childhood cancer is a global problem — a multi-billion dollar, multi-year problem,” Rick Shadyac, managing director of St. Jude’s fundraising arm, told The Associated Press at the time. . “The way we look at it is, if it’s not St. Jude, then who?”

Financial disclosures recently released by St. Jude, however, show that $886 million of the hospital’s record $2 billion in revenue in the previous fiscal year went unspent. Those excess dollars were instead funneled into the hospital’s reserve fund, helping it grow to $7.6 billion by the end of June 2021. That’s enough money to keep the hospital running. St. Jude’s 77-bed hospital in Memphis at last year’s levels for the next five years without a one-time additional donation.

The impressive growth in fundraising raises new concerns about the amount of money the charity has set aside for its rainy day fund.

Last year, ProPublica reported that St. Jude had racked up billions of dollars as many families of young patients being treated at the hospital struggled financially. The parents told ProPublica they had depleted their savings and retirement accounts and borrowed from family and friends, despite St. Jude’s high-profile pledge to alleviate many of the costs. associated with treatment “because all a family should care about is helping their child live.” St. Jude said they provide generous benefits to families, but cannot cover all of the financial obligations that a family experiences during a child’s illness.In response to the story, St. Jude has significantly increased its benefits for families, including more support for travel and housing.

Some researchers, oncologists, health care advocates and patient families complain that St. Jude’s fundraising makes it harder for other children’s hospitals to raise money for their operations. St. Jude competes for fundraising directly against other children’s hospitals, some of which have significant numbers of patients in clinical trials and their own research divisions focused on pediatric cancer care. To visualize just how far St. Jude outpaces its competition: in 2020, US News and World Report’s ranked the nation’s best childhood cancer centers. St. Jude’s, ranked tenth, drew more than the combined total of the nine hospitals ranked above it, according to financial records filed with the Internal Revenue Service.

“Donors all want value for their money,” said Ge Bai, a professor of accounting and health policy at Johns Hopkins University. “It’s time for St. Jude to respect donor preferences and stop hoarding. Spending efficiently and enough money for the main mission is the only way to earn the trust of donors and maintain their generosity.

In a statement, St. Jude said the large reserve was a prudent cushion against stock market fluctuations as well as economic uncertainties created by global crises like the war in Ukraine. He said he expects the annual cost of operating the hospital and capital improvements to drop from a total of $2 billion in fiscal year 2023 to $2.2 billion. by fiscal year 2026. At that point, the statement said, contributions may not keep pace with spending and the hospital may need to dip into the reserve fund. The hospital said it plans to spend a total of $12.9 billion over the six-year period beginning with fiscal year 2022.

St. Jude said it cannot be fairly compared to any other hospital because its operating model relies disproportionately on public donations.

“Our reserves allow us now, and in the years to come, to treat patients and pursue research projects – no matter what happens to the economy or when disaster strikes,” the statement said.

St. Jude said it is also expanding its work internationally, including a plan to spend $200 million over five years to help thousands of children in the Middle East, Africa and other parts of the world to receive free chemotherapy drugs. In recent months, the hospital has also helped pediatric cancer patients in Ukraine continue to receive care.

“Having a responsible reserve fund is critical to fueling this comprehensive, all-encompassing strategic plan,” St. Jude wrote.

The Better Business Bureau’s Wise Giving Alliance, which sets standards for charitable spending, advises charities to avoid hoarding funds that could instead be used for current programs. It states that a charity’s unrestricted net assets should not exceed three times the previous year’s expenses or the current year’s budget. The alliance deducts assets such as land and buildings from its calculations and combines the expenses of the hospital and its fundraising arm. The alliance’s calculation puts the reserve fund at 3.05 times higher than the hospital’s and ALSAC’s current-year budget, which the charities have provided to the alliance. Although St. Jude itself is slightly above the limit, the alliance said it remains in compliance.

St. Jude’s fundraising arm, the American Lebanon Syrian Associated Charities, or ALSAC, spent $626 million in fiscal year 2021, or about 35% of the organization‘s total spending, according to financial informations. This figure includes fundraising and public education about childhood cancers. St. Jude spent $1.2 billion on treating children with critical illnesses, labs and clinical trials, and hospital administration. St. Jude said its fundraising and marketing spending was well within industry standards.

Record contributions of $2 billion to St. Jude represented a 16% increase over the previous year. St. Jude said it benefited from investment gains in a boiling stock market in addition to increased dues in fiscal 2021.

A major driver of increased giving has been bequests, in which donors name St. Jude as a beneficiary in their will. These donations increased 24% over the previous year to $478 million, or nearly one in every four dollars donated to St. Jude.

The legacy program, while one of the most successful in the country in terms of dollars raised, has also led to disputes with donor family members and allegations that the hospital is being too aggressive in fundraising. from inheritance. St. Jude says it operates with the highest ethical standards in carrying out donor intentions.

While St. Jude’s fundraising has flourished, the pandemic shutdown has devastated many other charities.

The St. Baldrick Foundation is one of the largest funders of childhood cancer research in the country. Its far-reaching programs fund clinical trials to test new treatments and provide training for new doctors and researchers entering the field.

The charity mainly raises funds at events where people shave their heads to solicit contributions. When COVID-19 triggered quarantines in March 2020, St. Baldrick had to cancel dozens of events and lost millions in donations, said Kathleen Ruddy, the organization’s chief executive.

In the fiscal year before the pandemic began, St. Baldrick’s financial disclosures show he raised more than $36 million. Total donations last fiscal year, ending June 2021, were approximately $18 million, a decrease of 49%. The charity had to close several research grant programs and lay off staff, Ruddy said.

People often ask if St. Baldrick’s is part of St. Jude, Ruddy said, but in fact, St. Jude sometimes applies for and receives research grants from St. Baldrick’s.

St. Jude is one of many deserving charities serving children with cancer, Ruddy said.

“We’ve funded approximately $9.3 million in research at St. Jude” since the foundation launched in 2004, Ruddy said. “But we’ve funded over $300 million in other hospitals. So that tells you that no institution has a monopoly on talent, innovation and ideas.

She said St. Baldrick’s fundraising has started to pick up and the charity plans to reinstate one of its closed research grants in the next fiscal year.

About Wanda Reilly

Check Also

Former Ukrainian governor accuses authorities of abuse of power

Former Central Bank of Ukraine Governor Kyrylo Shevchenko has accused two of the country’s anti-corruption …