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October 4, 2019

7

Where Does $100 to St. Jude’s Go (2018)?

by Anne Paddock

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 where revenue is spent and that St. Jude’s is actually two organizations:

  • St. Jude Children’s Research Hospital, Inc. (St. Jude)
  • American Lebanese Syrian Associated Charities  (ALSAC)

ALSAC  “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 St. Jude engages in research and provides care and services to sick children and their families. St. Jude 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 St. Jude does the research and provides the treatment.

The most recent IRS Form 990’s (2017) for the year ending June 30, 2018 reveal ALSAC raised $1.652 billion and spent $483 million (29% of revenue) on functional expenses (salaries, office, mailings, campaigns, etc) and gave $757 million (46% of revenue) to St. Jude leaving $412 million (25% of revenue) to be added to ALSAC’s fund balance which had $4.7 billion at year-end.

During the same time period, St. Jude reported total revenue of $981 million, of which $757 million (77%) came from ALSAC. The remaining $224 million (23%) came from government grants ($83 million), patient care – primarily insurance reimbursements ($117 million), and other contributions/licensing, cafeteria, vending machines, etc ($24 million).

St. Jude spent $951 million or 97% of the revenue received on functional expenses:

  • $506 million (52% of revenue) for salaries and benefits
  • $129 million (13% of revenue) in other expenses
  • $120 million (12% of revenue) on fees for services (primarily other but also acct, legal, mgmnt, lobbying)
  • $102 million (10% of revenue) on pharmaceuticals and lab work
  • $ 75 million (8% of revenue) on office related expenses
  • $ 15 million (2% of revenue) on travel, meetings, and conferences
  • $  4 million  (less than 1% of revenue) on grants to other organizations

$92 million of the $120 million in fees for services is not detailed. Because the $92 million is less than 10% of total expenses ($951 million), detail is not required to be reported on the Form 990.

The unspent revenue ($30 million) was added to the fund balance which had $5.3 billion at year-end (of which $4.7 billion was the beneficial interest in the assets of ALSAC).

So, if a $100 contribution was given, the money was spent as follows:

$100:  Contribution

-$ 29:  ALSAC functional expenses

-$ 25:  Into the Fund Balance of ALSAC

$ 46:  Amount Remaining and Provided to the Hospital

-$ 24:  Salaries and Benefits of hospital staff (52% of $46)

-$   6:  Other hospital expenses (13% of $46)

-$   6:  Fees for Services (12% of $46)

-$   4: Pharmaceuticals and Lab Work (10% of $46)

-$   4: Office related expenses at hospital (8% of $46)

-$    1: Travel, Conferences, and Meetings and Grants (2% of $46)

-$ 45: Total St. Jude Expenses

$     1:  Amount Remaining (to Fund Balance at St. Jude)

The bottom line is that $29 of a $100 contribution went to pay the fundraising costs at ALSAC. $25 was retained and placed in the fund balance while $46 was given to St. Jude. St. Jude spent $45 while the remaining $1 went into their fund balance. In other words, $26 was retained, $29 spent on fundraising, and $45 on hospital expenses. That the hospital has $5.3 billion (up from $2.4 billion 6 years ago so the organization is clearly focused on growing the endowment by adding hundreds of millions of dollars annually) in net fund assets (of which $1.1 billion are restricted) raises the questions:

Why aren’t more funds spent on helping sick children and families?  

When will services be expanded to help more sick children?  

When will more money be allocated to the hospital than to fundraising and savings (note:  savings are important and can be used for capital expansion but ALSAC has consistently given about 50% of revenue to St Jude’s annually, consistently spent about 29% of revenue on fundraising annually, and consistently saved about 20% of revenue raised annually).

To read more about the historical financial trends (Top Ten Financial Tips to Know About St. Jude’s)  at St. Jude’s and ALSAC, click here.

To read the IRS Form 990 (2017) of ALSAC for the year ending June 30, 2018, click here.

To read the IRS Form 990 (2017) of St. Jude’s for the year ending June 30, 2018, click here.

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

7 Comments Post a comment
  1. Oct 4 2019

    Great post! Thank you doing the research, and the maths, and sharing this. So many charities do the same and people should be aware.

  2. Oct 4 2019

    Thanks Violet.

  3. Ben Lodderhose
    Dec 15 2019

    My donations are stropping immediately So much of the money is spent on salaries and other things not going to the children I will find another charity to donate to if their is a fair one I am Lebanese and my uncle was a friend of Danny Thomas. This ends today

  4. Kelly Brauch
    Apr 12 2020

    I appreciate the detail of your report but you are not are speaking a foreign language to the majority of those of us who give. Please, just speak in simple terms. Regardless of the expenses, what is the benefit provided by each dollar to the positive outcome for any given child?

  5. Apr 13 2020

    The title of the post is “Where Does $100 to St. Jude’s Go?”

    The post states:

    So, if a $100 contribution was given, the money was spent as follows:

    $100:  Contribution

    -$ 29:  ALSAC functional expenses

    -$ 25:  Into the Fund Balance of ALSAC

    $ 46:  Amount Remaining and Provided to the Hospital

    -$ 24:  Salaries and Benefits of hospital staff (52% of $46)

    -$   6:  Other hospital expenses (13% of $46)

    -$   6:  Fees for Services (12% of $46)

    -$   4: Pharmaceuticals and Lab Work (10% of $46)

    -$   4: Office related expenses at hospital (8% of $46)

    -$    1: Travel, Conferences, and Meetings and Grants (2% of $46)

    -$ 45: Total St. Jude Expenses

    $     1:  Amount Remaining (to Fund Balance at St. Jude)

    The above information is very simple to understand. Which part of the above equation is unclear?

    With regards to your question “Regardless of the expenses, what is the benefit provided by each dollar to the positive outcome for any given child?”, the answer is much more complicated because “positive outcome” would have to be defined and this is not provided on the Form 990 submitted to the IRS. You could make an argument that if positive outcomes are not high enough, more revenue should go to St Jude’s for research and treatment (instead of being added to the general fund which has billions) or you could make the argument that if positive outcomes are high, more revenue should go to St Jude’s so they could help more sick children and even expand their services (again, instead of keeping billions in the general fund). But, no matter how positive outcome is defined, it doesn’t change how every $100 in revenue was spent. $29 out of your $100 contribution was spent on fundraising by ALSAC. ALSAC also put $25 out of your $100 in the general fund. ALSAC then gave $46 to St. Jude who spent $45 (primarily on staff compensation, fees, services, and pharmaceuticals) and put $1 in the general fund.

Trackbacks & Pingbacks

  1. Where does your $1 to St. Jude Children’s Research Hospital Go? | Paddock Post
  2. Executive Compensation at St. Jude’s (2018) | Paddock Post

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