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June 6, 2017

Where does $100 to the American Institute for Cancer Research Go?

by Anne Paddock

The American Institute for Cancer Research (AICR) has a very impressive name with the four key words – American, Institute, Cancer, and Research – that draws prospective donors to make millions of dollars in contributions annually.

A 501 (c) (3) non-profit organization based out of Washington, DC, AICR “educates the public about the relationship of nutrition, physical activity, and weight management to cancer, interprets the scientific data and funds research.” In other words, AICR does not do research; they read and interpret the research to educate the public and they provide grants (less than 6% of total revenue collected goes to grants in the USA and Europe, according to the IRS Form 990).

For the year ending September 30, 2015, AICR reported $18.5 million in total revenue (which is primarily derived from contributions) but spent $18.8 million ($11.1 million (60%) on programs, $1.1 million (6%) on grants, $2.9 million (16%) on management, and $3.7 million (20%) on fundraising). In other words, 36 cents of every dollar went to management and fundraising. Because the organization had about $9 million in net assets, they were able to absorb the loss.

There are two ways to look at how donations are spent:  by category (program, management, fundraising, and grants) or by specific line item expense, with the later providing more detail in how dollars are spent. In essence, the difference is like looking at the big picture versus the details. Both are telling with one providing an overview while the other specifically shows where dollars are spent. Looking at the overview first, a $100 donation made to AICR was spent as follows:

$100:  Revenue

-$ 60:  Program Expenses

-$   6:  Grants

-$ 20:  Fundraising Costs

-$ 16:  Management Costs

-$102: Total Program, Grants, Fundraising and Management Costs

Expenses by specific categories is summarized as follows:

$100:  Revenue

-$ 31:  Mailhouse Fees, List Costs, Postage, Advertising

-$ 24:  Compensation and Benefits

-$ 16:  Other Expenses (no detail provided)

-$ 11:  Printing and Publications

-$   7:  Office Expenses

-$   4:  Outside Services (accounting, legal, etc)

-$   2:  Travel and Conferences

-$   1:   Payments to Affiliates and Interest

-$ 96: Subtotal Expenses

-$   6: Grants

-$102: Total All Expenses

The following information is also reported on the IRS Form 990:

AICR has investments of $2.2 million in charitable gift annuities, $1.9 million in charitable remainder unitrusts, and $1.3 million in a cancer research fund, for a total $5.4 million. They have corresponding liabilities of $1.7 million to these assets.

AICR recognized an unrealized loss on investment of $284,948.

AICR is associated with the World Cancer Research Fund (WCRF) based in London. AICR paid $84,091 to WCRF and owes $109,698 to them.

AICR utilized three companies for phone and direct mail solicitation:

  • Infocision Management Corp raised $3.2 million through phone solicitation of which $2.1 million was given to AICR while $1.1 million was retained by the fundraiser (in other words, 66 cents of every dollar raised went to AICR while the phone solicitor retained 34 cents.
  • Direct Response Consulting raised $6.4 million through direct mail of which $5.9 million was provided to AICR and $0.5 million was retained by the solicitor (92 cents of every dollar raised went to AICR while the solicitor kept 8 cents).
  • Strategic Fundraising, Inc. raised $78,713 of which $61,713 (78 cents of every dollar) was retained by the phone solicitor and $17,000 (22 cents of every dollar) was provided to AICR.  The bottom line:  don’t respond to phone or mail solicitors.

The five highest paid contractors were primarily related to fundraising:

  • Infocision Management Corp:  $2,108,881  (Fundraising)
  • Southwest Publishing:  $772,238 (Mailhouse Consultant)
  • The Data Center:  $568,260 (DP Consultant)
  • Direct Response Consulting:  $500,613  (Fundraising)
  • Fisher Group:  $385,011  (Mailhouse Consultant)

Of the $1.1 million in grants given, about $650,000 were given to four entities in the United States:

  • University of California, San Diego:  Matching Research Grant of $464,308
  • Dana Farber Cancer Institute: Matching Research Grant of $165,000
  • UAB Nutrition Sciences:  Discretionary Grant of $14,980
  • Careers Through Culinary:  Discretionary Grant of $10,000

The $450,000 in grants made to entities in Europe are not specified beyond saying they were educational.

$1.2 million in compensation was paid to five staff, although the compensation to Marilyn Gentry is reported to be paid by WCRF International, which means that about $900,000 was paid to four employees of AICR.

  • $321,660:  Marilyn Gentry, President of WCRF
  • $387,437:  Kelly Browning, Executive VP, AICR
  • $177,196:  Kathryn Ward, Senior Advisor
  • $173,544:  Stephenie Lowe, SVP Finance
  • $177,088:  Deidre McGinley-Gieser

In conclusion, AICR spends heavily on fundraising utilizing phone and mail solicitation and consultants: $3.7 million out of the $18.5 million raised. Management costs are also high at $2.9 million. If expenses are analyzed individually, AICR spends the most revenue ($5.7 million) on mailhouse fees, list costs, postage, advertising followed by salaries and benefits ($4.5 million). $3 million in other expenses or 16% of the revenue raised was spent on other expenses which are not explained.  About 6% of revenue ($1.1 million) was spent on grants.

To read the IRS Form 990 (2014) for the year ending September 30, 2015, click here.

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