Where Does $100 to the American Lung Association Go (2022)?

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 19 independent voting members (directors) of the governing body;  13 of the 19 (68%) are male while 6 of the 19 (32%) 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 (647 people) so the organization is a non-profit (a 501 (c) (3)) that provides services rather than a non-profit that collects revenue to make grants for funding research (ALA only made $13 million in grants in 2022) or program assistance.

Based in Chicago, Illinois, the ALA has local offices nationwide. In 2022, total revenue was $129 million (compared to $100 million in 2021 and $104 million in 2020, $113 million in 2019) most of which came from contributions, gifts, and non-government grants ($71 million) and government grants ($41 million).

It is important to note the ALA relied heavily on NNE Marketing, a firm in Lexington, Massachusetts, for direct mail marketing that raised $18 million (note:  the firm was compensated $370,000).

Expenses totaled $102 million in 2022 and can be categorized as follows:

• $42 million (33% of revenue):  Compensation
• $26  million (20% of revenue):  Fees for Services (primarily consultants for “program service”)
• $14  million (11% of revenue):  Direct Mail/Advertising/Printing/Postage
• $13  million (10% of revenue):  Grants
• $ 5   million (4% of revenue):  Office-related Costs
• $ 2 million (1% of revenue):  Other Expenses

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

 $100:  Revenue

-$ 33:  Compensation

-$ 20:  Fees for Services (primarily consultants for “program service” with no detail provided)

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

-$  4:  Office-related Costs

-$  1:  Other Expenses

-$ 69: Subtotal: Compensation, Fees, Direct Mail, Office, and Other Expenses

  $ 31:  Revenue Remaining

-$ 10: Grants

 $ 21:  Unspent Revenue:  To General Fund

As illustrated above, $79 out of every $100 in revenue was spent with the three (3) largest expenses being compensation for the 647 staff who received $42 million which equates to an average compensation of $65,000, fees for services (primarily described as consultants for “program service” with no detail provided), and direct mail/advertising/printing/postage.. Note:  the ALA has fewer employees (150 less than in 2021) but compensation costs have remained the same ($42 million in 2021 and in 2022) which means they are paying their employees more.

Net fund assets were $168 million at the beginning of the year. After adjustments for unrealized losses on investments ($26 million)  and other changes in net assets – primarily changes in beneficial interests in trusts ($4 million), net assets remained virtually unchanged at $166 million at year-end, even though ALA spent $27 million less than the organization raised (the unrealized losses on investments basically offset the excess revenue).

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 “90% of your money goes to program services” but without knowing what the $25 million (out of $26 million) in “other fees” described as “consultants for program services specifically are, it is difficult to make conclusions. In addition, ALA reports $9 million in direct mail and advertising are “program service” expenses but it is unclear what programs these expenses supported.

To read the IRS Form 990 (2021) for the year ending June 30, 2022, click here.