Are Health Charities Out Of Control?

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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 aAmerican 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 wasbased 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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