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Are health charities out of control?
The growth, expansion, and politicization of health charities has
emerged as an issue in recent years, partly in the context of the
anti-smoking campaign. Are trusted and well-established charities
conducting themselves in a way that stands up to scrutiny -- and
that meets the expectations of the public and the people they were
created to serve?
A number of developments have given charity-watchers reason to ask
that question, and a number of related questions:
Is it appropriate for charities to receive taxpayer money in the
form of grants? Is it appropriate for charities to use donors'
money for "advocacy" or activism, rather than for such traditional
activities as research and patient support? Can donors find out
where their money really goes? Are there proper mechanisms for
accountability to ensure that donors' money is spent wisely
and for the purposes for which it was intended?
In the case of some of the major health charities, critics
have begun to ask whether the charities have begun to stray from
their original community -oriented, donor-supported mandates, and
whether there is sufficient financial oversight and accountability.
In the case of the American Cancer Society, for example, a number
of published incidents have given rise to concern:
Questions about charities receiving tax dollars
- According to critic Dr. James T. Bennett, the American Cancer
Society has effectively dropped its long-standing ban on the
acceptance of tax money, and now receives taxpayer money in the
form of grants for such things as anti-smoking programs. He argues
that such practices undermine the organization's position as a
charity -- since charities are by definition supposed to "do what
neither government nor the profit-making private sector can or will
do."
("The American Cancer Society: Feeding at the Tax Trough," in
Alternatives in Philanthropy, July, 1996)
Questions about adequate financial control and oversight
- In 1986, a former fund-raiser for the American Cancer Society was
convicted in New York in a charity tax fraud scheme involving close
to $4 million. The Society was not accused in the case, but pledged
to tighten its financial controls following the incident.
(New York Times, April 19, 1986)
- In 1995, an ex-financial director of Louisiana's American Cancer
Society chapter was charged with embezzling more than $85,000 in
contributions. The same individual had in 1992 pleaded guilty to
embezzling $800,000 from a business where she had worked.
(New Orleans Times Picayune, Sept. 20, 1995)
- In Nebraska and Ohio, a controversy erupted over allegations that
a American Cancer Society executive director was not properly
accounting for expenditures. This contributed to a crisis of
confidence that resulted in a flurry of resignations by volunteers.
Critics charged that the director's lax oversight had been a factor
in the hiring of a financial manager who subsequently stole $30,000
from the American Cancer Society's Nebraska division.
(Columbus Monthly, Oct., 1995)
- An investigative press report on the Arizona division of the
American Cancer Society revealed that the organization had spent
$3.6 million on internal operation for the preceding year, and only
$47,000 for cancer patients and their families.
(Phoenix New Times, Jan.26-Feb. 1, 1995)
Questionable fundraising tactics
- The American Cancer Society and the American Heart Association
went to court to claim the will of baseball legend "Shoeless Joe"
Jackson because his signature on the document would be worth
$100,000. Their claim was based on the fact that they had been
beneficiaries of Jackson's wife's will. The court ruled against the
charities. An attorney acting for the state said the ruling would
protect state archive and historical records from being ruined by
collectors seeking valuable items. The charities have said they may
appeal.
(The State [Columbia, South Carolina], Feb. 6, 1997;
Associated Press report, Sept 6, 1997)
Questionable promotional "partnerships"
- In exchange for a donation of $1 million from the Florida
Department of Citrus, the American Cancer Society agreed to
exclusively promote Florida orange juice, raising concerns that
this would lead to a public impression that orange juice has
unusual cancer-fighting properties. The Society defended its
promotion of Florida orange juice as a cancer-fighting food in an
advertisement, and indicated it might welcome other partnerships
with food business interests.
(CNN, Atlanta, May 23, May 24, 1997)
Questions about public relations strategy
-The Nebraska division of the American Cancer Society lost its
biggest largest source of donations -- the Cattle Baron's Ball --
after the ACS alienated beef producers with a warning linking beef
consumption with cancer. The beef producers instead donated the
proceeds of their ball to a local cancer center and the local
community.
(Omaha World-Herald Nov. 19, 1996)
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