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Charities ignore the needy in reversal of Robin Hood - American Cancer Society, American Heart Association, American Lung Association



Americans are the most charitable people on Earth. Each year they contribute more than $100 billion to philanthropic causes; health charities alone collect more than $10 billion from the public. But donors are likely to be surprised by how their contributions are spent by the "Big Three" health charities -- the American Cancer Society, or ACS; the American Heart Association, or AHA; and the American Lung Association, or ALA.

While the Big Three raise funds relentlessly to provide "urgently needed" support for medical programs, they are accumulating immense wealth in the form of cash, certificates of deposit, stocks, bonds, land, buildings and automobiles. The ACS is so fat that if it paid all of its bills it would have $500 million left--enough to operate for 16 months without asking the public for a dime. Critics wonder whether its Texas Division, which has 56 autos, is a car dealership. Or maybe, with its 14 parcels of land and 17 office buildings, it is really a real-estate holding company.

Since 1978, the net worth of the AHA has risen from $18 million to $245.4 million -- an increase of 1,263 percent. This wealth benefits the executives and staffs, but does little or nothing to help disease victims.

The Big Three also benefit members of the medical profession by practicing what has been called "Robin Hood in reverse." Each year the ACS and AHA spend more than $30 million to subsidize "continuing education" for doctors, dentists, nurses and clinicians -- people who can afford to pay their own way like other professionals who must stay abreast of developments in their fields. Critics say it is inappropriate to provide service subsidies to those with high incomes.

Health-charity executives and staffs do very well financially claiming to be "doing good." At state divisions of the ACS, where most programs are conducted, about half of every dollar spent goes for salaries, fringe benefits and payroll taxes. In larger states, six-figure salaries are not uncommon -- more than twice the annual pay of the head of the Salvation Army, a much larger and more complex organization which does a great deal to assist the needy. Add to this the generous perks, including travel, club memberships and expense accounts, and little is left to aid victims of heart disease, cancer and lung disease.

Helping the sick is not a high priority for the Big Three -- despite fundraising rhetoric to the contrary. The AHA spends nothing on poor people afflicted with heart disease; the ALA spends less than half of 1 percent of its revenues on direct assistance to lung-disease sufferers; and comparable figures for the ACS show that only 2 percent of its spending is targeted to individual cancer victims.

Vast sums supposedly are spent on "public education" programs, but how can the public be educated about diseases that the medical profession itself admits it does not understand? Most of this education is little more than fear mongering to increase donations and the demand for physician services (indigestion may signal the onset of cancer, says the ACS' "warning signs") and self-promotion to enhance the charities' public images.

The Big Three also claim to play an important role in research, but again the facts show otherwise. For every dollar spent by these charities on research, the federal taxpayer, via the National Institutes of Health alone, spends at least $15 -- with a whole alphabet soup of federal agencies involved in disease research. The Big Three make "seed grants" to researchers -- not to find the causes and cures for the diseases, but to help favored scientists write proposals to get the big research dollars from government and industry. As a result of this, critics say, research may have been hindered rather than helped because those outside the health-charities clique who have rent ideas and approaches to disease are at a disadvantage in obtaining money to pursue their research. The nation's "war on cancer," proclaimed in 1971, has consumed at least $30 billion with no victory in sight.

Health charities must return to their charitable roots and do what no other group in society can do: organize volunteers to help needy disease victims. These groups certainly do some good, but so much more could be accomplished if they reoriented their programs to help the needy rather than their own executives and members of the medial establishment.

RELATED ARTICLE: Better to Receive

Salaries, fringe benefits and payroll taxes as a percent of total American Cancer Society expenditures: Missouri 60.0% California 58.9 Minnesota 54.2 Arizona 53.9 Wisconsin 52.5 Colorado 52.3 Connecticut 52.0 Florida 48.7 Ohio 46.4 Texas 45.0 Source: Unhealthy Charities

James T. Bennett is a professor of economics at George Mason University and coauthor of Unhealthy Charities: Hazardous to Your Health and Wealth.

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