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February 16, 2020

Where Does $100 to the Leukemia and Lymphoma Society Go (2018)?

by Anne Paddock

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 (2017) for the year beginning July 1, 2017 and ending June 30, 2018, the following key information was reported:

Total revenue was $439 million (up from $345 million the previous year), most ($420 million) came from contributions, gifts and grants.

Expenses totaled $356 million (including $5 million in depreciation) and can be viewed two ways:  by broad general category (i.e. grants, program services, management and general expenses, and fundraising) or by specific line item category (i.e. compensation, office-related expenses, travel and conferences, grants, fees for services, etc). Both ways are beneficial with the latter approach providing more detail.

Expenses by Broad General Category

The $356 million in expenses were categorized as follows:

  • $158 million (36% of revenue):  Grants
  • $123 million (28% of revenue):  Program Services
  • $ 46 million (10% of revenue):  Fundraising
  • $ 29 million (7% of revenue):  Management and General Expenses

As illustrated above, the largest expense ($158 million) was for grants. Most grants were for research with multiple grants often given to a research university or medical school. $41 million in grants to domestic organizations were made with the largest recipients listed below:

  • $3.8 million:  Dana Farber, Boston, MA (for research grants0
  • $3.0 million:  Sloan Kettering, New York, NY (for research grants)
  • $2.9 million:  Forty Seven, Inc, Menlo Park, CA (for therapy acceleration)
  • $2.5 million: University of Texas MD Anderson, Houston, TX (for research grants)
  • $2.4 million:  University of Miami (for research grants)
  • $2.3 million:  Weill Medical College, New York, NY (for research grants)
  • $1.9 million:  Beckman Research Institute, Duarte, CA (for research grants)
  • $1.6 million:  The Trustees of Columbia University, New York, NY (for research grants)
  • $1.2 million:  Board of Trustees of the Leland State University, San Francisco, CA (for research grants)

In addition, $110 million in grants to domestic individuals were given. Specifically, $108 million in co-pay assistance was provided to 29,898 individuals, which equates to an average co-pay assistance of $3,600. $2 million in travel assistance was granted to 4,772 individuals, which equates to an average of $419.

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

 $100:  Revenue

-$ 36:  Grants ($9 for domestic research grants; $25 for co-pay and travel assistance; $2 for foreign research grants)

-$ 28:  Program Services

-$ 10:  Fundraising

-$  7:  Management and General Expenses

$ 81:  Total Expenses

 $ 19:  Revenue not spent:  To General Fund

As illustrated above, $36 out of every $100 was spent on grants, of which most was for co-pay and travel assistance followed by research grants. $19 out of every $100 was not spent and therefore, added to the general fund (which is often referred to as the endowment).  Specifically, the organization started out with $152 million in net fund assets. After adding unspent revenue ($82 million) and a $2 million unrealized gain on investments, the LLS had $236 million in net fund assets at year-end, which is a very significant increase. In essence, a $100 donation was used for research grants ($11), co-pay and travel assistance ($25), program services ($28), fundraising ($10), management and general expenses ($7) and to increase the endowment ($19).

Expenses by Specific Line Item Category

The $356 million in expenses were allocated as follows:

  • $158 million (36% of revenue):  Grants
  • $104 million (24% of revenue):  Compensation
  • $ 36 million (8% of revenue): Office-related expenses
  • $ 28 million (6% of revenue):  Fees for Services
  • $ 10 million (2% of revenue):  Other Expenses
  • $  7 million 2% of revenue):  Advertising and Promotion
  • $  7 million 2% of revenue):  Travel and Conferences
  • $  6 million 1% of revenue):  Research and Development

In looking at specific line item expenses, grants were the largest expense followed by compensation.  1,291 employees received $104 million in compensation which equates to an average compensation of $81,000.  Fees for Services add up to $28 million, $20 million of which is not detailed. $8 million of the $28 million was spent on legal, accounting, investment, lobbying, and professional fundraising. Other Expenses include depreciation and $5 million in “miscellaneous expenses” which are not detailed.

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

 $100:  Revenue

-$ 24:  Compensation

-$  8:  Office-related expenses

-$  6:  Fees for Services

-$  2:  Advertising and Promotion

-$  2:  Travel and Conferences

-$  2:  Other Expenses

$ 44:  Subtotal Expenses for Compensation, Office, Fees, Advertising, Travel, and Other

 $ 56:  Remaining Revenue

-$ 36: Grants

-$  1:  Research and Development

-$ 37: Subtotal Grants, Research, and Development

$ 19:  Revenue Remaining:  To General Fund

As illustrated above, $44 out of every $100 was spent on organization expenses leaving $56. After deducting $37 for grants and research/development, $19 was left unspent and added to the fund balance.

Summary

The Leukemia and Lymphoma reports $439 million in revenue in 2018, nearly $100 million more than the prior year. If you donated $100 in revenue, approximately $11 was given for research grants ($9 of which was to domestic organizations) while $25 was given as co-pay and travel assistance to individuals. $24 was spent on compensating employees and $6 was spent on fees to outside entities.  $14 was spent on office-related expenses, advertising and promotion, travel and conferences, and other expenses. The organization did not spend $19 out of the $100 (these funds were added to the general fund), which leads to the question:  Why weren’t more funds allocated to research grants rather than increasing the endowment by nearly $100 million?

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

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