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October 20, 2022

Where Does $100 to the American Lung Association Go (2021)

by Anne Paddock

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 18 independent voting members (directors) of the governing body;  12 of the 18 (67%) are male while 6 of the 18 (33%) 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 (817 people) so the organization is a non-profit (a 501 (c) (3)) that provides services more than a grant maker (ALA made $13 million in grants in 2021) who provides funding for research or program assistance.

Based in Chicago, Illinois, the ALA has local offices nationwide. In 2021, total revenue was $100 million (compared to $104 million in 2020, $113 million in 2019, and $108 million in 2018) most of which came from contributions, gifts, and non-government grants ($59 million) and government grants ($24 million).

Expenses totaled $99 million in 2021 and can be categorized as follows:

  • $ 42 million (42% of revenue):  Compensation
  • $ 26 million (26% of revenue):  Fees for Services (primarily “program service” fees)
  • $ 11 million (11% of revenue):  Direct Mail/Advertising/Printing/Postage
  • $ 13 million (13% of revenue):  Grants
  • $  6 million (6% of revenue):  Office-related Costs
  • $  1 million (1% of revenue):  Other Expenses

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

 $100:  Revenue

-$ 42:  Compensation

-$ 26:  Fees for Services (primarily “program service” with no detail provided)

-$ 11:  Direct Mail/Advertising/Printing/Postage

-$  6:  Office-related Costs

-$  1:  Other Expenses

-$ 86: Subtotal: Compensation, Fees, Direct Mail, Office, and Other Expenses

  $ 14:  Revenue Remaining

-$ 13: Grants

 $  1:  Unspent Revenue:  To General Fund

As illustrated above, $99 out of every $100 in revenue was spent with the four largest expenses being compensation for the 817 staff who received $42 million which equates to an average compensation of $51,400, fees for services (primarily described as “program service” with no detail provided), direct mail/advertising,printing/postage and office-related costs.

Net fund assets were $143 million at the beginning of the year. After adjustments for unrealized gains on investments ($22 million)  and other changes in net assets – primarily changes in beneficial interests in trusts ($3 million), net assets totaled $168 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.  The website of the ALA reports that
90% of your money goes to program services” but without knowing what the $25 million (out of $26 million) in “other fees” were specifically spent on, it is difficult to make conclusions.

To read the IRS Form 990 (2020) for the year ending June 30, 2021, click here.

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