Where Does $100 to Shriners Hospitals for Children Go (2021)?

Shriners Hospitals for Children is a network of hospitals, medical and satellite centers, outpatient facilities, ambulatory surgery care centers, and outreach centersthat provide specialized pediatric care (orthopedics, burn, spinal cord, and palate) for children under the age of 18. According to the Shriners website, all but 2 of the hospitals (Canada and Mexico) are located in the United States under two non-profit corporations:

• The Shriners Hospitals for Children (for 11 hospitals, 1 outpatient facility (Salt Lake City), 2 ambulatory surgery centers, and 4 clinics) – a Colorado corporation based in Tampa, Florida; and
• The Shriners Hospitals for Children (for 1 hospital and 1 outpatient facility in Massachusetts) – a Massachusetts corporation based in Tampa, Florida.

The Shriners Hospitals for Children – Colorado 

The Shriners Hospitals for Children – Colorado (SHC – Colorado) is a non-profit 501 (c) (3) based in Tampa, Florida that reports the following information (based on the IRS Form 990 (2021):

There are 21 voting members (19 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 $11 billion, which provides significant investment income to the organization. In the beginning of 2021, the organization had nearly $10 billion in assets.  The increase of nearly $1 billion is primarily attributable to gains on the sale of assets (investments) which resulted in $800 million in gains, and net unrealized gains on assets ($200 million).

SHC – Colorado reported $1.6 billion in revenue in 2021 (compared to $900 million n 2020), which primarily came from three (3) sources:

• $499 million in contributions, gifts, and grants (including $19 million from the government)
• $957 million in investment income, gain on the sale of assets, etc
• $165 million in patient services (i.e. insurance payments)

SHC – Colorado reported $872 million in expenses (not including $72 million in depreciation) and were categorized as follows:

• $447 million (28% of revenue):  Compensation-related Expenses
• $171 million (10% of revenue):  Fees for Services (primarily fundraising and program – no detail)
• $ 75  million (5% of revenue):  Medical Supplies and Patient Costs
• $ 72  million (5% of revenue):  Office-related Expenses
• $ 61  million (4% of revenue):  Advertising and Promotion, and Events
• $ 33  million (2% of revenue):  Grants
• $  3    million (less than 1% of revenue):  Travel and Conferences
• $ 10    million (less than 1% of revenue):  Interest, Fees, Taxes, and Other Expenses

As illustrated above, the largest single category expense was compensation-related costs for the 5,649 employees who were compensated $447 million, which equates to an average compensation of $79,000. The most highly compensated employee was reported to be Scott Cozin, Chief of Staff who received $3.8 million in compensation in 2021.

Using the above information, every $100 in revenue was spent as follows: $100:  Revenue -$ 28:  Compensation-related expenses -$ 10:  Fees for Services -$  5:  Medical Supplies and Patient Costs -$  5:  Office-related expenses -$  4:  Advertising and Promotion, and Events -$  1:  Travel and Conferences, Interest, Fees, Taxes, and Other Expenses -$ 53 : Subtotal Expenses   $ 47:  Revenue Remaining -$   2:  Grants  $  45:  Unspent Revenue:  To General Fund

As illustrated above, SHC – Colorado spent $55 for every $100 in revenue in 2021, with the unspent revenue ($697 million along with $178 million in unrealized gains and $62 million in other changes to net assets) allocated to the general fund.

It appears the organization sold a large amount of securities and recognized the gain (allocating most of the gains to the general fund).  If this large source of income (nearly $800 million) for 2021 was not considered for a moment, then the organization raised about $840 million ($500 million in contributions, gifts, and grants, $165 million in patient revenue, and $180 million in investment income) which nearly covered the $872 million in expenses.

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 $80 million. Edge Direct was compensated $28 million (35% or $35 out of every $100 they raised), leaving $52 million for SCH – Colorado. So, if your donation was through Edge Direct, then $65 out of every $100 was given to SHC – Colorado, while $35 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 – Massachusetts 

The Shriners Hospitals for Children – Massachusetts (SHC – Massachusetts) is a non-profit 501 (c) (3) based in Tampa, Florida that includes 1 hospital and one outpatient facility in Massachusetts. Key information about SHC – Massachusetts is summarized below (based on the IRS Form 990 (2021):

SHC – Massachusetts has net assets of $582 million (compared to $557 million in 2020)  – the improvement due to $6 million in unrealized gains on investments and $19 million in unspent revenue.

SHC – Massachusetts reported $83 million in revenue in 2021 (compared to $59 million in 2020, $80 million in total revenue in 2019 and $92 million in 2018), which primarily came from three (3) sources:

• $21 million:  Contributions, gifts, and grants (of which $13 million came from SHC – Colorado)
• $48 million:  Investment income, Gain on the sale of assets, and rents
• $12  million:  Patient Services (i.e. patient insurance)

SHC – Massachusetts reported $59 million in expenses (not including $5 million in depreciation) which were categorized as follows:

• $34 million (41% of revenue):  Compensation-related expenses
• $14 million (17% of revenue):  Fees for Services (primarily medical program services with no detail)
• $ 5 million (6% of revenue):  Office-related expenses
• $ 4 million (5% of revenue):  Medical Supplies and Patient Costs
• $ 2 million (2% of revenue):  Other Expenses

As illustrated above, the largest expense category was for compensation ($34 million) for 527 employees, which equates to an average compensation of $65,000.  The most highly compensated employees were John McCabe,an EVP who receive $884,257 (from a related organization), and James F Mooney III, the Chief of Staff who was compensated $770,099.

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

 $100:  Revenue -$ 41:  Compensation-related expenses -$ 17:  Fees for Services -$  5:  Medical Supplies and Patient Costs -$  6:  Office-related expenses -$  2  Other Expenses -$ 71: Total Expenses  $ 29:  Revenue Remaining:  To General Fund

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 2 non-profits that make up Shriners Hospitals for Children in the United States reported nearly $1.7 billion in revenue in 2021 (compared to $955 million in 2020, $896 million in 2019 and $1 billion in 2018) and spent about $900 million in 2021 (not including depreciation). Collectively, the two organizations have more than $11 billion 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 (2021) for SHC – Colorado, click here. To read the IRS Form 990 (2021) for SHC – Massachusetts, click here.