From The McKinsey
Quarterly,
“For Nonprofits, Time Is Money,”
“US foundations and endowed nonprofit
organizations have accumulated nearly $1 trillion in
investment assets—a sum that is expected to double over the
next 20 years. Such wealth reassures the social-service,
environmental, and arts organizations that depend on these
sources for funding. But by applying the financial concept of
the "time value of money" to current disbursement patterns,
the authors of this article conclude that it would be in
society's best interest for the managers of foundations and
endowments to put this money to work sooner rather than later.
Donors can help by giving gifts that are not restricted to
specified uses and by asking
when, as well as
how, their money will be used.”
From
MSNBC News,
November 20,
2006,
"For U.S.
Charities, a Crisis of Trust,”
by Sharon Hoffman:
“Americans’
charitable spirit peaks during the holiday season, but this
year the urge to give is battling a strong
contrarian tide – a crisis of
trust born from public disenchantment with a philanthropic
system that many consider disorganized, under-regulated and
tainted by scandal. A poll by Harris Interactive released this
summer found only one in 10 Americans strongly believes
charities are "honest and ethical" in their use of donated
funds. And nearly one in three believes nonprofits have
‘pretty seriously gotten off in the wrong direction,’ it
found.”
From the
Children’s Partnership,
“Proposition 86: An Initiative to Secure Health Insurance for
California Children:"
“On November
7 Proposition 86 was defeated in
California
by a 4.2% margin. Proposition 86 sought to achieve several
important public health goals, including expanding health
insurance to all children in
California,
by increasing the state's cigarette tax by $2.60 per
pack. Sponsoring organizations
(sic), with The Children's Partnership, included: American
Cancer Society, American Heart Association, American Lung
Association, Campaign for Tobacco
Free Kids, California Hospital Association, California Primary
Care Association, Children Now and PICO California.”
From the
Robert Wood Johnson
Foundation Web site,
www.rwjf.org, about
The Children’s Partnership:
(if
the link is expired, click here)
The Robert
Wood Johnson Foundation (RWJF) provided three grants to The
Children's Partnership, a project of The Tides Center, to
research and monitor trends in health care coverage for
children. The first grant (ID# 027800) produced a "strategic
audit" that described the problem of children who lack health
insurance due to the decline in employment-based insurance and
Medicaid cutbacks. It noted health insurance coverage trends
and strategies, and proposed short- and long-term solutions
involving business leaders, elected officials, child care
advocates, and health policy analysts to support state and
national initiatives to provide health care coverage to
children. A dissemination grant (ID# 028307) permitted
distribution of the report to 500 health leaders,
policymakers, funders, and others
concerned with children's well-being. A third
grant (ID# 029635) funded continued
monitoring and dissemination of information about trends in
children's health coverage. Four issues of a 4,000-circulation
newsletter
were devoted to the issue, and the grantee provided strategic
advice to other organizations working on various aspects of
the issue. Newsletters were also distributed by other
organizations and are available on the grantee's web site,
www.childrenspartnership.org.
Policymakers reported using the material from the second grant
in press releases, media interviews, and annual reports. . . .
Some enterprising states had created programs that went beyond
Medicaid, such as those that rely on taxes on health
providers, cigarettes and/or alcohol, and hospital surcharges
(e.g., Minnesota, California, Massachusetts, and New York) . .
. A legislative aide for the Assembly Speaker in the Maine
legislature used the information to convince key legislators
that a tobacco tax increase should be used for children's
health coverage.”
GRANT DETAILS & CONTACT
INFORMATION
Project:
Researching and Monitoring Trends in Health Care Coverage for
Children
Grantee:
The
Tides
Center
(San
Francisco,
CA)
·
Audit of
Activities and Opportunities to Extend Health Insurance
Coverage to Uninsured Children
Amount: $ 49,893
Dates: September 1995 to December 1995
ID#: 027800
·
Dissemination of Information on Extending Health Insurance
Coverage to Uninsured Children
Amount: $ 8,000
Dates: May 1996 to December 1996
ID#: 028307
·
Monitoring
Public and Private Efforts to Increase Children's Access to
Health Insurance
Amount: $ 175,000
Dates: August 1996 to July 1997
ID#: 029635
According to
Yahoo Finance
the Robert Wood Johnson Foundation is among the top 5
institutional shareholders of pharmaceutical giant Johnson &
Johnson (Stock symbol JNJ). When marked-to-market as of
November 20,
2006
the foundation’s holdings of 66,440,108 shares of JNJ common
stock are worth $4.4 billion. The company’s subsidiary ALZA
Corp. manufacturers NicoDerm CQ
nicotine patches for GlaxoSmithKline.
Johnson & Johnson also purchased Pfizer Consumer Healthcare
for $16.6 billion in June 2006, which included
Nicorette nicotine gum.
As tobacco
control advocates – such as RWJ foundation grant recipients
the American Cancer Society, the American Lung Association,
and the Campaign for Tobacco Free-Kids – artificially inflate
the cost of cigarettes through tobacco tax advocacy
GlaxoSmithKline often increases
the cost of Nicotine Replacement Therapy (NRT) products by
like amount. For example, from 2001 to 2005
Washington
tobacco taxes increased by $12.00 per carton and on a per unit
basis the cost of a box of Nicorette
increased by $12.06. Increasing the price of one product based
on the increased cost of a similar product is referred to as
“Parity Pricing.” Cigarette tax increases directly benefit the
Robert Wood Johnson Foundation because they create the basis
for artificially inflating the price of
Nicorette and NicoDerm CQ.
As prices for those consumer products are artificially
inflated the profits to manufacturers such as Johnson &
Johnson and distributor GlaxoSmithKline
increase accordingly. With Proposition 86 we observe the
direct and undeniable phenomenon of a private foundation with
a $4.4 billion vested interest in the successful distribution
of Nicorette and
NicoDerm CQ applying its
multi-billion-dollar clout to directly influence state taxes
that create artificial profits to its own benefit. When
distribution of Nicorette and
NicoDerm CQ expands through
passing smoking bans corporate sales increase. When
Parity Pricing of NRT products occurs
increased sales add artificially inflated profits to corporate
bottom lines of Johnson & Johnson and
GlaxoSmithKline. Added profits from NRT sales support
the stock price of the Robert Wood Johnson Foundation’s stock
holdings in JNJ. the more
profitable the stock holdings are the more grant money
available to finance tax and ban advocacy. The preceding
observations were included in my article about Proposition 86
that was published by the
Los Angeles Daily Journal
on November 2, 2006.
It strikes
me as a cultural aberration that charities with $1 trillion in
combined endowments stridently hustle folks who balance their
budget by mere dollars for more. It is an absurdity that
organizations such as the American Cancer Society and the
American Lung Association turn donor contributions around to
finance statewide initiatives that levy more taxes on all
taxpayers and increase costs for all consumers. It is a legal
travesty that one of the largest American nonprofits, the
Robert Wood Johnson Foundation, has committed hundreds of
millions – reportedly at least $446 million – to tobacco
control grants that support the price of its own JNJ stock
holdings, while crying poor to the public about the desperate
need for more funding to address children’s health care.
Such
self-serving, pecuniary interests by nonprofits make it
abundantly clear to me that Ms. Hoffman may be understating
public distrust in her November 20 article when she reported
“one in 10 Americans strongly believes charities are "’honest
and ethical’ in their use of donated funds.” If nonprofits
were not hoarding $1 trillion in endowments to preserve their
political clout perhaps funding would be available for
legitimate medical needs. The bottom line as to the Robert
Wood Johnson Foundation, the American Cancer Society, and the
American Lung Association is simple: start funding what you
claim to be about when you solicit donations – children’s
health – and chill out on using your economic largess to line
your own pockets.
In view of
the above, any
California
politician that sponsors a bill to increase cigarette taxes
during the 2007 must be held politically accountable.
Sponsoring such bills is an unmistakable statement that the
Assembly member chooses to enrich private special-interests at
the expense of consumers, taxpayers and children. Such
thinking is dangerous to legitimate public health and fiscally
irresponsible. Crying poor about “the children” while sending
millions per year in artificial subsidies to Johnson & Johnson
and
GlaxoSmithKline is beyond
disingenuous, is smacks of deliberate deceit.
In the
meantime, when the cancer society and the lung association
call to solicit more donations for “the children,” the wisest
course of action seems to be a simple response:
“Sorry, no
can do. Charity begins at home. I’m busy figuring out how to
feed the kids
after you charitable porkers are done piling on new taxes and
artificially inflating the cost of consumer goods.”
Far more
dangerous than the alleged nationwide obesity epidemic is the
growth of nonprofits’ self-serving pork. It’s time to put the
Robert Wood Johnson Foundation, the American Cancer Society,
the American Lung Association and other charitable health
organizations on a strict diet that features a strong dose of
political accountability.
Eliminating
political grease from the health charity diet is the first
step toward truly “Saving the Children.”
Norman E.
Kjono
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