American Cancer Society – Non Profit or Big Business?
November 20, 2009
Cancer Prevention Coalition
By Samuel S. Epstein M. D.
The American Cancer Society is fixated on damage control— diagnosis and treatment— and basic molecular biology, with indifference or even hostility to cancer prevention. This myopic mindset is compounded by interlocking conflicts of interest with the cancer drug, mammography, and other industries. The “nonprofit” status of the Society is in sharp conflict with its high overhead and expenses, excessive reserves of assets and contributions to political parties. All attempts to reform the Society over the past two decades have failed; a national economic boycott of the Society is long overdue.
The American Cancer Society (ACS) is accumulating great wealth in its role as a “charity.” According to James Bennett, professor of economics at George Mason University and recognized authority on charitable organizations, in 1988 the ACS held a fund balance of over $400 million with about $69 million of holdings in land, buildings, and equipment (1). Of that money, the ACS spent only $90 million— 26 percent of its budget— on medical research and programs. The rest covered “operating expenses,” including about 60 percent for generous salaries, pensions, executive benefits, and overhead. By 1989, the cash reserves of the ACS were worth more than $700 million (2). In 1991, Americans, believing they were contributing to fighting cancer, gave nearly $350 million to the ACS, 6 percent more than the previous year. Most of this money comes from public donations averaging $3,500, and high-profile fund-raising campaigns such
as the springtime daffodil sale and the May relay races. However, over the last two decades, an increasing proportion of the ACS budget comes from large corporations, including the pharmaceutical, cancer drug, telecommunications, and entertainment industries.
In 1992, the American Cancer Society Foundation was created to allow the ACS to actively solicit contributions of more than $100,000. However, a close look at the heavy-hitters on the Foundation’s board will give an idea of which interests are at play and where the Foundation expects its big contributions to come from. The Foundation’s board of trustees included corporate executives from the pharmaceutical, investment, banking, and media industries. Among them:
David R. Bethune, president of Lederle Laboratories, a multinational pharmaceutical company and a division of American Cyanamid Company. Bethune is also vice president of American Cyanamid, which makes chemical fertilizers and herbicides while transforming itself into a full-fledged pharmaceutical company. In 1988, American Cyanamid introduced Novatrone, an anti-cancer drug. And in 1992, it announced that it would buy a majority of shares of Immunex, a cancer drug maker.
Multimillionaire Irwin Beck, whose father, William Henry Beck, founded the nation’s largest family-owned retail chain, Beck Stores, which analysts estimate brought in revenues of $1.7 billion in 1993.
Gordon Binder, CEO of Amgen, the world’s foremost biotechnology company, with over $1 billion in product sales in 1992. Amgen’s success rests almost exclusively on one product, Neupogen, which is administered to chemotherapy patients to stimulate their production of white blood cells. As the cancer epidemic grows, sales for Neupogen continue to skyrocket.
Diane Disney Miller, daughter of the conservative multi-millionaire Walt Disney, who died of lung cancer in 1966, and wife of Ron Miller, former president of the Walt Disney Company from 1980 to 1984.
George Dessert, famous in media circles for his former role as censor on the subject of “family values” during the 1970s and 1980s as CEO of CBS, and now chairman of the ACS board.
Alan Gevertzen, chairman of the board of Boeing, the world’s number one commercial aircraft maker with net sales of $30 billion in 1992.
Sumner M. Redstone, chairman of the board, Viacom Inc. and Viacom International Inc., a broadcasting, telecommunications, entertainment, and cable television corporation.
The results of this board’s efforts have been very successful. A million here, a million there— much of it coming from the very industries instrumental in shaping ACS policy, or profiting from it. In 1992, The Chronicle of Philanthropy reported that the ACS was “more interested in accumulating wealth than in saving lives.” Fund-raising appeals
routinely stated that the ACS needed more funds to support its cancer programs, all the while holding more than $750 million in cash and real estate assets (3). A 1992 article in the Wall Street Journal, by Thomas DiLorenzo, professor of economics at Loyola College and veteran investigator of nonprofit organizations, revealed that the Texas affiliate of the ACS owned more than $11 million worth of assets in land and real estate, as well as more than 56 vehicles, including
11 Ford Crown Victorias for senior executives and 45 other cars assigned to staff members. Arizona’s ACS chapter spent less than 10 percent of its funds on direct community cancer services. In California, the figure was 11 percent, and under 9 percent in Missouri (4):
Thus for every $1 spent on direct service, approximately $6.40 is spent on compensation and overhead. In all ten states, salaries and fringe benefits are by far the largest single budget items, a surprising fact in light of the characterization of the appeals, which stress an urgent and critical need for donations to provide cancer services.
Nationally, only 16 percent or less of all money raised is spent on direct services to cancer victims, like driving cancer patients from the hospital after chemotherapy and providing pain medication.
Most of the funds raised by the ACS go to pay overhead, salaries, fringe benefits, and travel expenses of its national executives in Atlanta. They also go to pay chief executive officers, who earn six-figure salaries in several states, and the hundreds of other employees who work out of some 3,000 regional offices nationwide. The typical ACS affiliate, which helps raise the money for the national office, spends more than 52 percent of its budget on salaries, pensions, fringe benefits, and overhead for its own employees. Salaries and overhead for most ACS affiliates also exceeded 50 percent, although most direct community services are handled by unpaid volunteers. DiLorenzo summed up his findings by emphasizing the hoarding of funds by the ACS (4):
If current needs are not being met because of insufficient funds, as fund-raising appeals suggest, why is so much cash being hoarded? Most contributors believe their donations are being used to fight cancer, not to accumulate financial reserves. More progress in the war against cancer would be made if they would divest some of their real estate holdings and use the proceeds— as well as a portion of their cash reserves— to provide more cancer services.
Aside from high salaries and overhead, most of what is left of the ACS budget goes to basic research and research into profitable patented cancer drugs. The current budget of the ACS is $380 million and its cash reserves approach $1 billion. Yet its aggressive fund-raising campaign continues to plead poverty and lament the lack of available money for cancer research, while ignoring efforts to prevent cancer by phasing out avoidable exposures to environmental and occupational carcinogens. Meanwhile, the ACS is silent about its intricate
relationships with the wealthy cancer drug, chemical, and other industries. A March 30, 1998, Associated Press Release shed unexpected light on questionable ACS expenditures on lobbying (5). National vice president for federal and state governmental relations Linda Hay Crawford admitted that the ACS was spending “less than $1 million a year on direct lobbying.” She also admitted that over the last year, the society used ten of its own employees to lobby. “For legal
and other help, it hired the lobbying firm of Hogan & Hartson, whose roster includes former House Minority Leader Robert H. Michel (R– IL).” The ACS lobbying also included $30,000 donations to Democratic and Republican governors’ associations. “We wanted to look like players and be players,” explained Crawford. This practice, however, has been sharply challenged. The Associated Press release quotes the national Charities Information Bureau as stating that it” does not know of any other charity that makes contributions to political parties.”
Tax experts have warned that these contributions may be illegal, as charities are not allowed to make political donations. Marcus Owens, director of the IRS Exempt Organization Division, also warned that “The bottom line is campaign contributions will jeopardize a charity’s exempt status.”
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