Skip to content

October 8, 2021

Where Does $100 to the American Diabetes Association Go (2019)?

by Anne Paddock

The mission of the American Diabetes Association is to prevent and cure diabetes and to improve the lives of all people affected by diabetes.

Established 80 years ago in 1940 when less than a million Americans (or less than 1% of the population) had diabetes, the American Diabetes Association (ADA) is one of the few (if not only) non-profit organizations working against a disease that has increased thirtyfold (The CDC estimates that more than 30 million people (nearly 10% of the population) in the USA have diabetes – primarily Type 2 which is largely preventable and reversible – and that another 100 million people have pre-diabetes which if not treated often leads to Type 2 within 5 years) over the decades despite hundreds of millions of dollars raised by the organization.

For years, the ADA raised significant amounts of funds but times changed in 2014. After 4 straight years of declining revenues (see chart below; numbers in millions except the average compensation “Avg Comp” which is expressed in actual dollars), the American Diabetes Association reversed the financial trend in 2018, after bringing in a new Chief Executive Officer along with several other executives. However, in 2019, revenues declined again but so did expenses which resulted in the ADA adding $9 million of unspent revenue to the general fund.

Year        2013               2014              2015              2016              2017           2018       2019

Rev         $216              $195             $181              $167               $144          $158       $147

Exp        $220               $185             $186             $190              $169          $132         $138

Rev-Exp  $- 4               $ 10              $- 5              $-23              $-25              $ 26          $9

Net Assets  $ 79          $ 89             $ 82              $ 59              $ 36               $ 59         $71

# of Empl      1,562        1,475             1,539         1,502            1,277          1,007        956

Empl Comp   $73          $71                $66                $69              $60            $52         $50

Avg Comp   $46,700   $48,100      $42,900         $45,900         $47,000      $52,600    $52,300

The ADA cut staff (down to 956 employees from 1,562 six years ago) and expenses but the real test for the ADA is whether they will ever meet their stated goal of preventing and curing diabetes – one of the most prevalent and fastest growing diseases in the USA.

We can look at the numbers but if the ADA continues to do what they have been doing for years to prevent and reverse diabetes, they are unlikely to meet their goals because it’s not working (hint:  they may want to start by redoing the Diabetes Food Hub which include recipes for deviled eggs, bacon wrapped shrimp, 276 recipes for chicken, 739 recipes that contain oil, 90 recipes that contain butter, and 24 recipes for bacon (a Type 1 carcinogen by the World Health Organization). Note:  for a detailed explanation of why the above foods are bad for Type 2 Diabetes, click here.

REVENUE

In 2019, the ADA raised $147 million which came primarily from four sources:

  • $109 million (74% of total revenue):  Contributions, Gifts, and Grants
  • $ 28 million (19% of total revenue):  Sub, Regist, Booth Rental, Material Sales
  • $  6 million (4% of total revenue):  Advertising, Permissions, and Other Revenue
  • $  4 million (3% of total revenue):  Investment Income, Gains, and Royalties

EXPENSES

Expenses totaled $138 million in 2019 and can be viewed two ways:  by broad general category (i.e. grant, program services, fundraising, management and general expenses) or by specific line item categories (i.e. compensation, office-related expenses, travel and conferences, fees for services, grants, etc). Both are beneficial with the latter approach providing more detail on how revenue was spent.

Expenses by Broad General Category

The $138 million (94% of revenue) in expenses were categorized as follows:

  • $78 million (53% of revenue):  Program Services
  • $31 million (21% of revenue):  Fundraising
  • $18 million (12% of revenue):  Grants
  • $11  million (8% of revenue):  Management and General Expenses

It is important to note that grants are usually included as a part of program services but it is helpful to separate the two figures out when seeking to understand the role of awarding grants in a non-profit.

For many diseases, non-profits raise funds to award grants for research in hopes of learning more about the disease in search of a cure. What makes Type 2 diabetes so unique is that the disease is largely preventable and reversible with lifestyle changes in diet. Consequently, the awarding of grants is not currently a significant part of program services at ADA. In 2019, ADA made $18 million in grants and almost all of it was to The American Diabetes Association Research Foundation, a non-profit that operates out of the same office as the ADA.

As illustrated above, the ADA spent $138 million of the $147 million raised, or 94% of revenue.  The unspent revenue – $9 million – was allocated to the general fund which had $71 million at year-end.

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

 $100:  Revenue

-$ 21:  Fundraising

-$  8:  Management and General Expenses

-$ 29: Subtotal Fundraising and Management/General Expenses

 $ 71:  Revenue Remaining

-$ 53: Program Services

-$ 12:  Grants

$   6:  Revenue Remaining:  To General Fund

As illustrated above, the ADA spent $29 out of every $100 on fundraising and management/general expenses. $65 out of every $100 was spent on programs and grants leaving $6 out of every $100 in revenue unspent and allocated to the general fund.

Expenses by Specific Line Item Category

The $138 million in expenses were categorized as follows:

  • $50 million (34% of revenue):  Compensation
  • $23 million (16% of revenue):  Office-Related Expenses
  • $18 million (12% of revenue):  Grants
  • $11 million (8% of revenue):  Fees for Services (i.e. legal, acct, fundraising, other)
  • $10 million (7% of revenue):  Printing and Publications
  • $ 9 million (6% of revenue):  Travel and Conferences
  • $ 6  million (4% of revenue):  Other Expenses
  • $ 6  million (4% of revenue):  Postage and Handling
  • $ 5  million (3% of revenue):  Advertising and Promotion

Compensation is the largest expense for ADA.  In 2019, 956 employees were compensated $50 million which equates to an average compensation of $52,300.   85  employees received more than $100,000 in compensation with the most highly compensated employee, Tracey D Brown, the Chief Executive Officer receiving $1,038,007.

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

$100:  Revenue

-$ 34:  Compensation

-$ 16:  Office-Related Expenses

-$  7:  Printing and Publications

-$  6:  Travel and Conferences

-$  8:  Fees for Services

-$  4:  Other expenses

-$  4:  Postage and Handling

-$  3:  Advertising and Promotion

-$ 82: Subtotal (Comp, Office, Print,Pub, Travel, Confer, Fees, PP, Adv)

$ 18:  Revenue Remaining

-$ 12:  Grants

$  6:  Revenue Remaining:  To General Fund

As illustrated above, $50 out of every $100 was spent on compensation and office-related expenses. An additional $32 out of every $100 was spent on printing, publications, postage, handling, advertising and promotion, fees for services, and other expenses.  In total, $82 out of every $100 was spent on staff and organization expenses while $12 out of every $100 in revenue received was spent on grants. $6 out of every $100 was not spent and allocated to the general fund.

In summary, the ADA is a non-profit whose mission is to prevent and cure a disease (diabetes) that is one of the fastest growing diseases in the country. Although the ADA has been around for 80 years and has raised hundreds of millions of dollars, the organization has been unable to prevent and cure or even stop the growth of Type 2 diabetes, which is largely preventable and reversible with dietary changes.

From 2014-2017, revenues declined from $216 million to $144 million while the general fund fell from $79 million to $36 million. Changes in management were made in 2018 which resulted in staff cuts, slashing expenses, and not spending as much as the organization raised (presumably to strengthen the balance sheet). Revenue increased to $158 million in 2018 (from $144 million in 2017) but declined in 2109 to $147 million. The real test is if the ADA will be effective in preventing and curing diabetes in the future.

To read the IRS Form 990 (2019), click here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Note: HTML is allowed. Your email address will never be published.

Subscribe to comments

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: