Where Does $100 to Shriners Hospitals Go (2020)?

Shriners Hospitals for Children is a network of 22 hospitals that provide specialized pediatric care (orthopaedic, burn, spinal cord, and palate) for children under the age of 18. According to the Shriners website, 20 out of the 22 hospitals are located in the United States and file IRS Form 990’s under two corporations:

• The Shriners Hospitals for Children (for 18 of the hospitals in the US) – a Colorado corporation based in Tampa, Florida; and
• The Shriners Hospitals for Children (for 2 of the hospitals in Massachusetts) – a Massachusetts corporation based in Tampa, Florida.

The Shriners Hospitals for Children (the Colorado corporation for 18 hospitals)

The Shriners Hospitals for Children – Colorado (SHC – Colorado) is a non-profit 501 (c) (3) based in Tampa, Florida that includes 18 hospitals in the US. Key information about SHC – Colorado is summarized below (based on the IRS Form 990 (2020):

There are 20 voting members (17 of whom are independent) of the governing body although 22 members are listed (due to timing differences, all of whom are male.

SHC – Colorado has net assets of nearly $10 billion, which provides significant investment income to the organization. However, it is important to note SHC had net assets of $7.6 billion at the beginning of 2019  This big change is a result of unrealized gains on investments (about $900 million) and a transfer from SHC – MA (about $600 million) to reimburse expenses that SHC- Colorado paid for SHC – Massachusetts in 2019 and $700 million in unrealized gains on investments in 2020.

SHC – Colorado reported $896 million in revenue in 2020 (compared to $816 million n 2019 and $951 million in 2018), which primarily came from three (3) sources:

• $457 million in contributions, gifts, and grants (including $18 million from the government)
• $283 million in investment income, gain on the sale of assets, etc
• $143 million in patient services (i.e. insurance payments)

SHC – Colorado reported $841 million in expenses (not including $51 million in depreciation) and were categorized as follows:

• $444 million (50% of revenue):  Compensation-related Expenses
• $157 million (17% of revenue):  Fees for Services (primarily fundraising and program – no detail)
• $ 73 million (8% of revenue):  Medical Supplies and Patient Costs
• $ 69 million (8% of revenue):  Office-related Expenses
• $ 54 million (6% of revenue):  Advertising and Promotion, and Events
• $ 32 million (3% of revenue):  Grants
• $   5 million (1% of revenue):  Travel and Conferences
• $   7 million (1% of revenue):  Interest, Fees, Taxes, and Other Expenses

As illustrated above, the largest single category expense was compensation-related costs for the 5,617 employees who were compensated $444 million, which equates to an average compensation of $79,000. The most highly compensated employee was reported to be Craig Ono, an orthopedic surgeon who received $2.7 million in compensation.

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

$100:  Revenue

-$ 50:  Compensation-related expenses

-$ 17:  Fees for Services

-$  8:  Medical Supplies and Patient Costs

-$  8:  Office-related expenses

-$  6:  Advertising and Promotion, and Events

-$  1:  Travel and Conferences

-$  1:  Interest, Fees, Taxes and Other Expenses

-$ 91 : Subtotal Expenses

  $   9:  Revenue Remaining

-$   3:  Grants

-$   6:  Unspent Revenue:  To General Fund

As illustrated above, SHC – Colorado spent $94 for every $100 in revenue in 2020, with the unspent revenue ($4 million along with $705 million in unrealized gains and $12 million in other changes to net assets) allocated to the general fund. 

Revenue was primarily spent on compensation for the medical staff, fees for outside services, medical supplies and patient costs, office-related expenses and advertising and promotion. With regard to advertising and promotion, it is important to point out SCH – Colorado used Edge Direct of Baltimore Maryland for direct mail solicitation and tv ads which raised $64 million. Edge Direct was compensated $22 million (34% or $34 out of every $100 they raised), leaving $42 million for SCH – Colorado. So, if your donation was through Edge Direct, then $66 out of every $100 was given to SHC – Colorado, while $34 was retained by Edge Direct.

It is also important to point out SCH – Colorado paid for first class flights for board members and executive staff whose flights are more than 2.5 hours long. Companion travel is provided for board members whose companion is participating in Shriners business. And, temporary housing allowances were provided for recruited individuals when relocation was required.

The Shriners Hospitals for Children (the Massachusetts corporation for 2 hospitals)

The Shriners Hospitals for Children – Massachusetts (SHC – Massachusetts) is a non-profit 501 (c) (3) based in Tampa, Florida that includes 2 hospitals in Massachusetts. Key information about SHC – Mass is summarized below (based on the IRS Form 990 (2020):

SHC – Massachusetts has net assets of $557 million (compared to $529 million the previous year) – the improvement due to $33 million in unrealized gains on investments.  

SHC – Massachusetts reported $59 million in revenue in 2020 (compared to $80 million in total revenue in 2019 and $92 million in 2018), which primarily came from three (3) sources:

• $37 million:  Contributions, gifts, and grants (of which $17 million came from SHC – Colorado)
• $12 million:  Investment income, Gain on the sale of assets, and rents
• $10  million:  Patient Services (i.e. patient insurance)

SHC – Massachusetts reported $61 million in expenses (not including $4 million in depreciation) which were categorized as follows:

• $35 million (59% of revenue):  Compensation-related expenses
• $15 million (25% of revenue):  Fees for Services (primarily medical program services with no detail)
• $ 5  million (8% of revenue):  Office-related expenses
• $ 3  million (5% of revenue):  Medical Supplies and Patient Costs
• $ 3  million (5% of revenue):  Other Expenses

As illustrated above, the largest expense category was for compensation ($35 million) for 536 employees, which equates to an average compensation of $65,000.  The most highly compensated employee was James F Mooney III, the Chief of Staff who was compensated $776,097.

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

 $100:  Revenue

-$ 59:  Compensation-related expenses

-$ 25:  Fees for Services

-$  5:  Medical Supplies and Patient Costs

-$  8:  Office-related expenses

-$  5  Other Expenses

-$ 92: Total Expenses

 $  8:  Revenue Remaining

As illustrated above, revenue was primarily spent on compensation for the medical staff, fees for services, medical supplies and patient costs, and office-related expenses.

It is also important to point out SCH – Massachusetts provides first class flights for board members and executive staff whose flights are more than 2.5 hours long.  Companion travel is provided for board members whose companion is participating in Shriners business. And, temporary housing allowances were provided for recruited individuals when relocation was required.

SUMMARY

In summation, the 20 Shriners Hospitals for Children in the United States raised $955 million in 2020 (compared to $896 million in 2019 and $1 billion in 2018) and spent $902 million in 2020 (not including depreciation). Collectively, the two organizations have $10.3 billion (compared to $9.5 billion the previous year) in net assets which provide significant investment income. The largest expense for both organizations is compensation for employees.  First class and companion travel was paid for by both organizations.

To read the IRS Form 990 (2020) for SHC – Colorado, click here.

To read the IRS Form 990 (2020) for SHC – Massachusetts, click here.