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April 25, 2018

Where Does $100 to the Breast Cancer Research Foundation Go?

by Anne Paddock

The Breast Cancer Research Foundation (BCRF) was founded in 1993 as an independent, not-for-profit 501 (c) (3) dedicated to preventing and curing breast cancer by supporting scientific research. Consequently, the organization engages in primarily two functions: raising funds and awarding grants.  Based in New York, BCRF has about 51 employees dedicated to these functions and managing the organization. So, the key question becomes:  just how much of the revenue raised was awarded in grants? About 80%, according to the most recent financial information.

The Form 990 (2016 representing the year beginning July 1, 2016 and ending June 30, 2017) for BCRF reports the following key information with regards to revenue and expenses, grants, assets and liabilities, and fundraising.

REVENUE and EXPENSES

BCRF raised $73 million most of which came from contributions, gifts, grants, and fundraising events.

Expenses were $71.8 million (about 98% of revenue) and can be viewed two ways:  by broad category (fundraising, management, grants, and program services) or by specific line item expense (i.e. compensation-related, office-related, grants, etc). Both ways are beneficial with the former providing a general overview while the later provides more specific information on how revenue was spent.

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

The $71.8 million in expenses were reported in the following four categories:

  • $59.0 million (or 80% of revenue):  Grants
  • $ 6.5 million (or 9% of revenue):  Fundraising
  • $ 4.2 million (or 6% of revenue):  Program Services
  • $ 2.1 million (or 3% of revenue):  Management Expenses

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

$100:  Revenue

-$  9:  Fundraising

-$  6:  Program Services

-$  3:  Management Expenses

-$ 18: Subtotal:  Fundraising, Program Services, and Management

$82:  Revenue Remaining

-$ 80:  Grants

$  2:  Amount Remaining:  To Fund Balance

As illustrated above, BCRF spent $18 out of every $100 in revenue raised on fundraising, management, and program service expenses, and $80 out of every $100 on grants.

Expenses by Specific Line Item Category

The $71.8 million in expenses were reported in the following six categories:

  • $59.0 million (or 80% of revenue):  Grants
  • $6.7 million (or 9% of revenue):  Compensation-related Expenses
  • $3.2 million (or 5% of revenue):  Other Expenses (primarily other fees for unspecified services)
  • $1.3 million (or 2% of revenue):  Office-related Expenses
  • $1.0 million (or 1% of revenue):  Fees for Services (management, legal, accounting, investment, bank)
  • $0.6 million (or 1% of revenue):  Travel and Conferences

The largest expense outside of grants was for compensation related expenses for the 51 employees who received total compensation of $6.7 million (or an average of $131,000 each). However, 14 individuals received more than $100,000 in compensation with the most highly compensated individual the President, Myra Biblowit who received $815,255.

It is also important to note BCRF spent $3.2 million on other expenses (primarily other fees for unspecified services) or $5 out of every $100 in revenue.

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

$100:  Revenue

-$  9:  Compensation-related Expenses

-$  5:  Other Expenses (primarily other fees for unspecified services mostly in fundraising)

-$  2:  Office-related Expenses

-$  1:  Fees for Services (management, legal, accounting, investment, and bank)

-$  1:  Travel and Conferences

-$18:  Subtotal Expenses

$ 82:  Revenue Remaining

-$ 80:  Grants

$   2:  Amount Remaining: To Fund Balance

As illustrated above, BCRF spent about $18 out one every $100 in revenue collected on expenses of the organization, with the largest line item compensation-related expenses for the staff of the organization.  $9 out of every $100 was spent on compensation-related expenses while $5 out of every $100 was spent on fees for unspecified services mostly for fundraising, $2 for office-related expenses, $1 for services (management, legal, accounting, investment, and bank fees) and $1 out of every $100 for travel and conferences.

GRANTS

$59 million or 80% of revenue was awarded in grants with $54.4 million awarded to 207 non-profit 501 (c) (3)’s in the United States who received more than $5,000 in grants.  The most common size grant was for $250,000.  Approximately 45% of grant dollars (or $26.6 million) through 89 grants (43% of grants) were awarded to the following 9 organizations for medical research:

  • John Hopkins University School of Medicine:  18 grants totaling $9.3 million
  • Dana Farber Cancer Institute: 11 grants totalling $2.8 million
  • Memorial Sloan Kettering Cancer Center:  13 grants totalling $3.2 million
  • University of California:  9 grants toiling $2.3 millin
  • University of Michigan:  9 grants totaling $2.3 million
  • University of Pennsylvania:  10 grants totaling $2.2 million
  • University of Texas MD Anderson Cancer Center:  7 grants totaling $1.8 million
  • University of North Carolina at Chapel Hill:  6 grants totaling $1.4 million
  • Stanford University:  6 grants totalling $1.3 million

ASSETS and LIABILITIES

BCRF reported having $91 million in assets, of which $76.5 million was in cash, publicly traded securities and other investments. The remaining assets were primarily in pledges receivable ($13.6 million).

Liabilities totaled $68.3 million, almost all of which was in grants payable, leaving $22.7 million in net fund assets ($13.2 million of which was unrestricted, $6.5 million permanently restricted, and $3 millions of which was temporarily unrestricted.

FUNDRAISING

The 990 tells us that after grants, BCRF spent the most ($6.5 million) on fundraising.  17 fundraising events that raised  $17.1 million were held. Deducting $14 million in contributions left $3.1 million which was used for entertainment, food and beverages, rent and facility costs, and other direct expenses, netting BCRF no funds from the events (beyond the contributions).

OTHER INFORMATION

William Lauder sits on the board of BCRF and the Estée Lauder Companies, and was indirectly involved in transactions where BCRF reimbursed the Estée Lauder Companies $6.8 million for payroll and shared employees expense.

In summary, the BCRF raises money to further scientific medical research to prevent and cure breast cancer. About 80% of revenue raised last year was awarded in grants, primarily to 9 non-profits who are leaders in the field of breast cancer research.  About 18% of revenue is spent on fundraising, management, and program services.

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

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