Where does $100 to St. Jude’s Go?

St. Jude’s is one of the most popular non-profit organizations in the country because the charity’s mission appeals to donors:  they treat and help children with cancer and other life threatening illnesses. But, before making donations, donors should understand that St. Jude’s is actually two organizations:

• St. Jude Children’s Research Hospital, Inc. (Hospital)
• ALSAC – St. Jude Children’s Research Hospital, Inc. (ALSAC)

ALSAC stands for the American Lebanese Syrian Associated Charities and “exists for the sole purpose of raising funds and building awareness to support the current and future needs of St. Jude Children’s Research Hospital, Inc” while the Hospital treats and helps the children along with their families. The Hospital has a beneficial interest in the assets of ALSAC but the organizations are separate non-profit 501 (c)(3) entities with specific functions: ALSAC raises funds while the Hospital provides the treatment.

The most recent IRS Form 990’s (2014) for the year ending June 30, 2015 reveal ALSAC raised $1.18 billion. ALSAC spent nearly $340 million (29% of revenue) on functional expenses (salaries, office, mailings, campaigns,etc) and gave $589 million (50% of revenue) to the Hospital leaving $251 million (21% of revenue) to be added to ALSAC’s fund balance which had $3.5 billion at year-end.

During the same time period, the Hospital reported total revenue of $795 million, of which $589 million (74%) came from ALSAC. The remaining $206 million (26%) came from government grants ($74 million), patient care ($106 million), and other contributions/licensing, cafeteria, etc ($26 million).

The Hospital spent $685 million (not including the non-cash expense of depreciation) or 86% of the revenue received on functional expenses:

• $396 million (50% of revenue) for salaries and benefits
• $109 million (14% of revenue) in other unexplained expenses
• $85 million (10% of revenue) on pharmaceuticals and lab work
• $54 million (7% of revenue) on office related expenses
• $25 million (3% of revenue) on services including accounting, legal, management, etc.
• $12 million (1.5% of revenue) on travel, meetings, and conferences
• $4 million  (0.5% of revenue) on grants to other organizations

The unspent revenue was added to the fund balance which had $4 billion at year-end (of which $3.5 billion was the beneficial interest in the assets of ALSAC).

So, if a $100 contribution was given to St. Jude’s, the money was spent as follows:

$100:  Contribution

-$ 29:  ALSAC functional expenses

-$ 21:  Into the Fund Balance of ALSAC

$ 50:  Amount Remaining and Provided to the Hospital

-$ 25:  Salaries and Benefits of Hospital Staff

-$   7:  Other Hospital Expenses

-$   5:  Pharmaceuticals and Lab Work

-$   4: Office related expenses at Hospital

-$    1: Other Services at Hospital

-$    1: Travel, Conferences, and Meetings

-$ 43: Total Hospital Expenses

$   7:  Amount Remaining (to Fund Balance of Hospital)

The bottom line is that $29 of a $100 contribution went to pay the fundraising costs at ALSAC. $21 was retained and placed in the fund balance while $50 was given to the Hospital. The Hospital spent $43 while the remaining $7 went into their fund balance. In other words, $28 was retained, $29 spent on fundraising, and $43 on hospital expenses. That the hospital has $4 billion in net fund assets (of which less than $1 billion are restricted) raises the question: Why aren’t more funds spent on helping sick children and families?

To review the 2014 IRS Form 990 for ALSAC, click here.

To review the 2014 IRS Form 990 for St. Jude Children’s Research Hospital, Inc., click here.

To read about Executive Compensation at St Jude’s (2018), click here.

To read Top Ten Financial Tips to Know About St Jude’s, click here.

To read an update, click on:  Where Does $100 to St Jude’s Go (2019)?

To read an update, click on Executive Compensation at St Jude (2019)

To read an update, click on Where Does $100 to St Jude’s Go (2020)?