Where Does $100 to the Leukemia and Lymphoma Society Go?

The Leukemia and Lymphoma Society (LLS) is a non-profit 501 (c) (3) whose mission is to “cure leukemia, lymphoma, Hodgkin’s Disease, and Myeloma, and improve the quality of life for patients and their families. To do this, LLS primarily focuses on three major programs:

• Patient and Community Services
• Research Programs
• Public Health Education

According to the IRS Form 990 (2016) for the year beginning July 1, 2016 and ending June 30, 2017, the following key information was reported:

$345.3 million in revenue was reported (compared to $271.7 million the year before – a $74.5 million increase) which primarily came from 2 sources:  Fundraising, Contributions, Gifts, and Grants ($314.9 million) and the TAP (Therapy Acceleration Program)  which provided $25.3 million.

Expenses totaled $308 million (not including depreciation) and can be viewed two ways:  by broad category (program, grants, management, and fundraising) or by specific line item category (i.e. compensation-related expenses, travel and conferences, office-related expenses, etc). Both are beneficial with the broad category analysis giving the reader a big picture overview while the specific line item category provides more detail.

Expenses by Broad Category (Program, Grants, Management, and Fundraising)

$122.9 million (36% of revenue):  Grants

$119.5 million (35% of revenue):  Program Services

$ 40.0 million (12% of revenue):  Fundraising

$ 25.6 million (7% of revenue):  Management

$308.0 million (90% of revenue):  Total Expenses

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$  7:  Management

-$ 12:  Fundraising

-$ 19:  Subtotal:  Management and Fundraising

$ 81:  Amount Remaining

-$ 36:  Grants

–$ 35:  Program Services

-$ 71:  Subtotal:  Grants and Program Services

$ 10:  Amount Remaining:  To Net Fund Balance

As illustrated above, $71 out of every $100 in revenue was spent on program services and grants while $19 was spent on management and fundraising, leaving $10 unspent and allocated to the fund balance.

Expenses by Specific Line Item Category

$122.9 million (36% of revenue):  Grants

$ 97.8 million (28% of revenue):  Compensation, Benefits, Pensions, Payroll Taxes

$ 36.5 million (11% of revenue):  Office, IT, Occupancy, Insurance

$ 21.2 million (6% of revenue):  Other Fees for Services (no detail provided) and Miscellaneous Expenses

$ 10.0 million (3% of revenue):  Travel

$  7.6 million (2% of revenue):  Fees for Services (Legal, Accounting, Investment, and Fundraising Fees)

$  6.4 million (2% of revenue):  Advertising and Promotion

$  5.6 million (2% of revenue):  Research and Development

$308 million (90% of revenue: Total Expenses

Using the above information, $100 in revenue was spent as follows:

$100:  Revenue

-$ 28:  Compensation, Benefits, Pensions, Payroll Taxes

-$ 11:  Office, IT, Occupancy, Insurance

-$  6:  Other Fees for Services (no detail provided) and Miscellaneous Expenses

-$  3:  Travel

-$  2:  Fees for Services (Legal, Accounting, Lobbying, Investment, and Fundraising Fees)

-$  2:  Advertising and Promotion

-$  2:  Research and Development

-$ 54:  Subtotal Expenses

$ 46:  Amount Remaining

-$ 36:  Grants

$ 10:  Amount Remaining: To Fund Balance

As illustrated above, $97.8 million or $28 out of every $100 in revenue was spent on compensation-related expenses for the 1,302 employees, which equates to an average of $75,000 per individual. However, 164 individuals received more than $100,000 in compensation with the most highly compensated individual the President and CEO, Louis J Degennaro who received $623,559 followed by Mark Roithmayr, an EVP who received $451,090.

Severance payments were made to the following individuals:

• $220,328:  Paulette Damiano
• $125,350:  Michele Przypszny
• $111,126:  George J Omiros

GRANTS:

The awarding of grants for research and to individuals is a major function of the LLS. The IRS Form 990 reports a total of $122.9 million or $36 out of every $100 in revenue collected was awarded in grants that can be categorized as follows:

• $38.9 million:  Grants to organizations (domestic)
• $74.7 million:  Grants to individuals (domestic)
• $  9.3 million: Grants to organizations (foreign)

Grants to Organizations (Domestic)

A total of $38.9 million was awarded to domestic organizations.  216 grants greater than $5,000 were awarded to domestic organizations.  The largest recipients were:

• $4.8 million:  24 research grants to the Dana-Farber Cancer Institute of Boston, MA for
• $3.3 million:  17 research grants to Memorial Sloan Kettering Cancer Center in NY, NY
• $1.9 million:  5 research grants to Baylor College of Medicine in Houston, TX
• $1.9 million:  5 research grants to the Regents of the University of California in San Francisco, CA
• $1.9 million:  5 research grants to the NY University School of Medicine in NY, NY
• $1.3 million:  8 research grants to the Trustees of Columbia University in NY, NY
• $1.2 million:  7 research grants to Weill Cornell Medical College in NY, NY

Grants to Individuals (Domestic)

A total of $74.7 million was awarded to individuals

$1.7 milion was awarded to 3,405 individuals for travel assistance (which equates to an average of $500 each).

$73  million was awarded to 31,026 individuals (which equates to $2,350 per recipient) for co-pay assistance.

Grants to Foreign Organizations

A total of $9.3 million in grants were made to foreign organizations with the largest recipients (not named) located in North America:  10 research grants totaling $7 million.  The second largest geographic recipient was Europe where 8 research grants totaling $1.4 million were awarded.

FUNDRAISING

LLS engages in mail, internet, phone, and in-person solicitations to raise funds. In addition, LLS holds fundraisers (2 large fundraisers known as the Lake Tahoe Bike Event and the DC Leukemia Ball and 487 other events that raised $184.6 million. After deducting contributions of $164.6 million, the gross income was $20 million. LLS spent $24.9 million on rent/facility costs, food, beverages, entertainment, prizes, and other expenses leaving a $4.9 million loss. LLS also engaged in gaming that brought in $925,000. After deducting prizes, LLS recognized $678,000 in income from the gaming events.

$4 million was spent on professional fundraising services with the highest compensated individuals/entities being:

• $1.1 million:  Mail America Communications, Inc. of Forest, VA for direct mail
• $0.6 million:  Thompson, Habib, and Denison of Lexington, MA for direct mail
• $0.3 million:  The Heritage Company, Inc. of Little Rock, AK for direct mail

FEES FOR SERVICES

152 contractors received more than $100,000 in compensation. The five most highly compensated outside contractors were:

• $4.8 million:  Resource One of Tulsa, OK for direct marketing
• $4.6 million:  Patient Advocacy Foundation of Hampton, VA for patient assistance
• $3.2 million:  Inc Research, LLC of Chicago, IL for a clinical trial
• $3.1 million:  Oliver Staffing, Inc of NY, NY for temporary staffing
• $1.8 million:  Northgate Digital Corporation of Newtown, PA for software development

On the IRS Form 990, LLS reports spending $7.6 million for outside accounting, legal, lobbying, fundraising, and investment fees but the organization also reports spending $17.5 million on other outside services but no detail was provided.

ASSETS/LIABILITIES/NET FUND ASSETS

LLS reported $272 million in assets – most of which were in cash and cash investments ($100 million), securities ($133 million), pledges/grants receivable ($16 million), land, buildings and equipment ($10 million), and other securities ($9 million).

The organization reported $120 million in liabilities, most of which were grants payable ($82 million), accounts payable ($24 million), and deferred revenue ($14 million).

At year-end, LLS had $152 million in net assets, $121 million of which was unrestricted.

SUMMARY

LLS raised nearly $350 million last year and spent about $310 million, strengthening their balance sheet with nearly $40 million of unspent revenue.  The organization is engaged in providing research grants to some of the largest cancer institutes in the country although only about 11% of revenue (nearly $39 million) was given for this purpose.  A greater portion – nearly $75 million or 22% of revenue – goes to individuals as co pay assistance and travel assistance.  Given that the organization’s stated mission is to cure so many of these diseases, an 11% allocation to domestic organizations for research grants  (and another $9 million or 3% of revenue to foreign organizations for research grants) is fairly low.  With $152 million in net fund assets, the organization appears to be able to allocate more revenue to research grants.

To read the IRS Form 990 (2016), click here.