Thursday, October 18, 2012

Are Komen and Livestrong Leading Cancer Charities Into Oblivion?

 
by Gary Snyder

It’s National Breast Cancer Awareness Month. Let us stretch it a bit to include a look at both Susan G. Komen and Livestrong. Both are making a lot of noise. I was struck by the remarkable similarities surrounding these two very popular charities

Both Lance Armstrong and Nancy Brinker, Susan G. Komen’s sister, are founders of their respective charities. Both agencies focus on cancer. Both Brinker and Armstrong have suffered from cancer. Both have spent years building a brand that is recognized around the globe. Accordingly, donors and corporate sponsors coveted both of them.

Both leaders have embroiled their agencies in controversy and, as a result, are under unwanted and intense scrutiny.

Susan G. Komen for the Cure is currently the nation’s leading anti-breast cancer charity. It has generated about $360 million in revenue annually. Under the direction of Nancy Brinker, a controversy began when it pulled the plug on funding Planned Parenthood grants for screening and mammogram referrals. That single misstep led to the unveiling of many questionable practices over several decades.

Livestrong is the largest athlete-named charity in the world. It has revenues approximating $42 million. Its founder’s, Lance Armstrong, credibility plummeted when the U.S. Anti-Doping Agency revealed evidence that the cyclist had used performance-enhancing drugs and stripped him of his seven Tour de France titles. He refused to fight the charges, but has denied using such drugs. The inquiry put his charity under the focus of many. Faced with mounting inquiries, Armstrong stepped down as chairman of Livestrong.

As if on queue, both agencies suggested, at the outset of their controversies, fundraising was not hurt. They said that it was enhanced. Brinker proclaimed that on national television. Armstrong’s Livestrong told ESPN that its revenues were up 5.4 percent. After looking into the details, both declarations may be a stretch.


If insider observations are any indication, turnout at Susan G. Komen pink-ribbon fundraising events are substantially down, some by as much as 40%. Some weighty donors have taken flight. From anecdotal observations, corporate sponsorship is significantly depressed.

Komen had a precipitate fall from a number two ranking in a 2011 survey to a number 56 ranking in 2012 between Jan. 31 and Feb. 20, 2012. “Since it was first surveyed in EquiTrend, Susan G. Komen for the Cure has in many ways represented the 'gold standard' among non-profits measured in our study, consistently reporting high scores for quality, the willingness to recommend and, most importantly, trust. Komen finds itself near the bottom of the pack on all of these items.” Some have suggested that the reason for Komen’s poor performance is, in part, because its lack of commitment to finding a cure. Many fellow breast-cancer organizations feel that the Komen self-adoration has overtaken any interest in cure research with its research funding being cut in half in the past couple of years.

According to tax records the Livestrong foundation saw contributions and grants drop by 23% ($41 million in 2009 to $30 million in 2010) as the doping controversy started to unfold. Its revenues have bounced back a bit. Observers, however, are saying that Livestrong, the charity inextricably linked with the Armstrong and built on the doping fraud, will see an adverse effect on raising funds. In addition, another proxy measure of commitment to the Livestrong cause---riders at events--- has diminished substantially.

While neither Nancy Brinker nor Lance Armstrong has suffered financially personally yet, both have become lightning rods that may inhibit the growth and even the survival of their respective charities. Nancy Brinker receives over $430,000 annually from Komen (for various positions) which seems to be a good reason to ignore incessant cries for her to step down. She has a booking agent for celebrity appearances, speaking engagements, endorsements and autograph signings in which she receives upwards of $45,000 or more in fees to show up.

Armstrong is worth over $100 million and commands $50,000 for speaking engagements. But his sound financial station may be changing. Nike, Giro Helmets, Trek Bicycles, FRS energy drink company, Anheuser-Busch and Radio Shack ended their contracts with Lance Armstrong. Their endorsement deals once earned the embattled cycling star millions of dollars. In addition, another hurtle for Armstrong to overcome may be the London's Sunday Times. The newspaper is considering legal action against the cyclist to recover the money spent on a libel suit brought by Armstrong, which he won. One senior source at the newspaper said that the case cost it about $1 million.

Both founders have been embroiled in questionable dealings. A tempest started when the Armstrong received shares of stock in an initial public offering that Livestrong was a part. When the media criticized it, Armstrong donated the proceeds---roughly $1.2 million---to the foundation.

Nancy Brinker has had a list of conflicts-of-interest. Over vehement objections by other breast cancer groups, Komen (Brinker) endorsed a cancer treatment with troubling links to uterine cancer. Its maker had been a long supporter of Komen. She caused controversy by sitting on the board of a for-profit chain (with her $500,000 investment) of cancer treatment centers. She had Susan G. Komen invest over $150,000 in her husband’s company.  She used Komen stock portfolio coupled with her cozy political relationships to her own advantage while omitting such in the Susan G. Komen for the Cure literature, Web site and public statements.  

Another storm has spilled over both agencies is the large amount of donor dollars spent by both organizations to protect their trademarks.  In 2009, Livestrong spent over a million dollars. Meanwhile, Susan G. Komen for the Cure has identified and filed legal trademark oppositions against more than a hundred charities that used any variation of “for the cure”. In the past, this effort had cost SGK almost a million dollars a year in donor funds. In some instances Komen demanded that agencies never use the color pink in conjunction with their fundraising. Some of the smaller targeted agencies have raised funds for Komen competitors such as the National Breast Cancer Foundation. 

There are significant contrasts in the governance of the respective agencies. To date, records show that Lance Armstrong has been seemingly scrupulous in his dealings with Livestrong. Nancy Brinker has not.

The board at Komen has been a repository for Brinker’s friends, family and business associates. Faced with outrage, board members have left en masse. Nevertheless, Brinker continues to fortify her position by adding many beholden to her such as vendors or employees. At times, she has been both a board member and a staff member. As a staff member she recommends to a board that she totally controls. This is an arrangement that no well-informed board member should accept.

In addition to the conflicts-of-interest that we have seen, internal conflicts proliferate at Susan G. Komen for the Cure. Brinker has had her fingerprints on every decision at the agency. There has been virtually a total turnover in the administration of the organization with over $1 million paid as a result of personnel transitioning out of the agency. In the past, there were charges that Brinker used agency funds to defray personal expenses that she has incurred while employed elsewhere.  This is a thorn that she has declined to address but continues to surface as outsiders monitor the operations of the organization.

Controversies abound elsewhere in the cancer charity world with a denigration of the cancer charity brand. Beside the two aforementioned cancer charities numerous other cancer charity efforts have put a blemish on their hard-won trust.

First, contributions are not going to where the donor has intended.  A probe into the NFL Breast Cancer Awareness fundraising showed that only 5% of each sale goes to the American Cancer Society. Donor contributions have morphed into public relations awareness huge campaigns to promote an agency and the cause, but not a cure.

Second, dubious practices, if continued, will destroy good charity efforts. Numerous cancer charities have abused their trusted names for the good of a few. For example, the Coalition Against Breast Cancer offers virtually nothing to patients after taking in millions. The Coalition is under investigation by New York Attorney General Eric Schneiderman. He called the charity a sham.

The United Cancer Council hired a fundraiser netting only $2 million out of the $28 million collected. The Making Memories Breast Cancer Foundation raised $1,159,654. Just under 12 percent, less than $137,000, went toward granting wishes for terminally ill breast cancer patients.

Both the Better Business Bureau and the nonprofit rating agency Charity Navigator has vilify Cancer Fund of America for giving less than a penny of every dollar raised to cancer patients.

Breast Cancer Society (BCS) claims it raised $50 million in contributions in tax filings but when pressed by Marie Claire magazine the founder said that it raised just $15 million in cash donations in 2009. The other $35 million represented mere estimates of medications that the BCS accepted as gifts or bought at a major discount. The Ontario-based Universal Aide Society revoked its Canadian charitable status for malfeasance.

Charity Navigator ranks The Breast Cancer Relief Foundation and the John Wayne Cancer Institute with just one star, poorly performing organizations. United Breast Cancer Foundation, Walker Cancer Research Institute and the American Breast Cancer Foundation have zero (0) stars.

It has been estimated that tens of millions of dollars are taken from those to which it was intended. Fewer than 50% of the Charity Navigator breast cancer charities have rated high for their commitment to Accountability and Transparency.

Evidence clearly indicates that both large and small cancer charity organizations are performing poorly. Unless there is an outside intervention, a fall from grace is imminent.


Gary Snyder is founder of Nonprofit Imperative. He can be reached at gary.r.snyder@gmail.com.
   













Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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