Where Does $100 to the American Lung Association Go? (2020)
The American Lung Association (ALA) was established more than 100 years ago (1918) initially to fight tuberculosis but expanded its mission to improve lung health and preventing lung disease through research, education, and advocacy.
There are 17 independent voting members (directors) of the governing body although there are 19 listed on the Form 990 which appears to be due to timing differences. 12 of the 19 (63%) are male while 7 of the 19 (37%) are female.
Specifically, ALA works to “defeat” lung cancer, “improve” the air we breathe, “reduce” the burden of lung disease on individuals and families, and “eliminate” tobacco use and tobacco-related diseases. To do this, the organization relies on staff (774 people) so the organization is a non-profit (a 501 (c) (3)) that provides services more than a grant maker (ALA made $12 million in grants in 2020) who provides funding for research or program assistance.
Based in Chicago, Illinois, the ALA has local offices nationwide. In 2020, total revenue was $104 million (compared to $113 million in 2019 and $108 million in 2018) most of which came from contributions, gifts, and non-government grants ($63 million) and government grants ($27 million).
Expenses totaled $106 million in 2020 and can be categorized as follows:
- $ 45 million (43% of revenue): Compensation
- $ 29 million (28% of revenue): Fees for Services (primarily “program service” fees)
- $ 12 million (11% of revenue): Direct Mail/Advertising/Printing/Postage
- $ 12 million (11% of revenue): Grants
- $ 6 million (6% of revenue): Office-related Costs
- $ 1 million (1% of revenue): Travel and Conferences
- $ 1 million (1% of revenue): Other Expenses
Using the above information, every $100 in revenue was spent as follows:
$100: Revenue
-$ 43: Compensation
-$ 28: Fees for Services (primarily “program service”)
-$ 11: Direct Mail/Advertising/Printing/Postage
-$ 6: Office-related Costs
-$ 1: Travel and Conferences
-$ 1: Other Expenses
-$ 90: Subtotal: Compensation, Fees, Direct Mail, Office, Travel and Other Expenses
$ 10: Revenue Remaining
-$ 11: Grants
-$ 1: Excess Spending over Revenue
As illustrated above, $101 out of every $100 in revenue was spent with the four largest expenses being compensation for the 774 staff who received $45 million which equates to an average compensation of $58,100, fees for services (primarily described as “program service”), direct mail/advertising,priting/postsge and office-related costs.
Net fund assets were $153 million at the beginning of the year. After adjustments for the excess spending over revenue ($2 million), unrealized losses on investments ($5 million) and adjustments (primarily for benefits) of $4 million, net assets totaled $142 million at year-end.
In conclusion, if you donated $100 to ALA, most of your donation was spent on compensating employees, paying for outside services, and direct mail/adverting/printing/postage.
To read the IRS Form 990 (2019) for the year ending June 30, 2020, click here.
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