St. Louis BBB July 2, 2009 – The Better Business Bureau (BBB) is advising area residents to be wary of a Tennessee-based cancer charity, which is giving less than a penny of every dollar raised in direct aid to help people with cancer.
Cancer Fund of America solicits donations across the U. S., including locally, through telemarketers, direct mail and online. The BBB found that more than 99 percent of all cash donations to the organization pay professional fundraising costs, salaries for charity officials, consultant fees and other expenses related to the charity’s operations.
“The large gap between Cancer Fund of America’s cash donations and the portion ultimately benefiting cancer patients should be a concern for every potential donor,” said Michelle Corey, president and CEO of the St. Louis BBB. “Even when compared to other nonprofits that rely heavily on professional fundraisers, the charity’s record is unsatisfactory and donors should know that only a fraction of their donation will provide any direct benefit to cancer patients or their families.”
Nancy T. Kinney, academic director for the Nonprofit Management and Leadership Program at the University of Missouri St. Louis, said that while she is “not in favor of absolute limits on fundraising overhead,” the costs associated with Cancer Fund of America’s fundraising are “outrageous, no matter how you look at it.
Cancer Fund of America and a related support group, Cancer Fund of America Support Services, Inc., reported they raised slightly more than $17 million in 2007, the most recent year in which public information is available. Of that total, Cancer Fund of America reported it donated $54,000 in cash to unrelated groups or individuals – or about 3/10 of 1 percent. Of that $54,000, however, $50,000 went to a court directed cancer charity as part of a settlement with the Georgia Governor’s Office of Consumer Affairs. The state alleged the charity gave out deceptive and misleading solicitations to consumers.
The salaries and benefit packages for charity president James T. Reynolds, Sr., two sons and a son-in-law totaled more than $537,000 for the same period.
Cancer Fund of America and Cancer Fund of America Support Services, Inc., both of Knoxville, Tenn., reported to the Internal Revenue Service that in addition to the $17 million in cash donations, Cancer Fund of America also received $5.8 million in non-cash donations in 2007.
In an emailed response to the BBB, Reynolds said that anyone looking at the charity’s work should not ignore $3.3 million in non-cash donations the charity gave to individuals and other organizations in 2007. Some of those donated items, such as liquid dietary supplements, examination gloves and bed pads, were purchased by the charity, Reynolds said. But he failed to respond when asked what portion of those donated items was purchased and how much was given to the charity.
Cancer Fund of America reports it distributed the non-cash items – including over-the-counter medications and personal hygiene products - to a variety of social service organizations and individuals. However, several of the organizations listed in the charity’s federal report appear to have little direct connection with cancer causes.
A spokesperson for Angelic Ministries, an organization that works with the poor in the Knoxville region, said it receives “oodles” of items from Cancer Fund of America. Cancer Fund of America reported it gave about $317,000 in donated items to the ministry in 2007, and the spokesperson said much of that was over-the-counter pain and cold medications. She said about half the drug items were expired, but usually only by a few months, and the drugs remained effective.
Cancer Fund of America also reported giving nearly $230,000 in donated items to Trinity Rescue Mission of Jacksonville, Fla. A spokesperson there said that organization deals largely with the homeless and not specifically with cancer patients. She said she had no record of ever receiving any donations from Cancer Fund of America, although she said the items could have come through another organization. Reynolds failed to respond when asked specifically about the rescue mission donation.
Federal records report that Cancer Fund of America received about $8.8 million in cash contributions in 2007. Slightly more than $8 million of that went to fundraising expenses, including more than $3 million in professional service compensation to Associated Community Services of Southfield, Mich. In August 2008, the Missouri attorney general’s office announced it had settled a lawsuit with Associated Community Services.
Also, Federal records show Cancer Fund of America Support Services, Inc. received slightly less than $8.2 million in cash donations in 2007. That organization’s only outgoing grant was for $750,000 – to Cancer Fund of America. The report says its fundraising expenses totaled about $6.1 million. James T. Reynolds Jr., a son of James T. Reynolds Sr., is listed as president of the support group.
Rose Perkins, who formerly worked with her husband, Reynolds Sr., at Cancer Fund of America, left that organization several years ago and currently heads Children’s Cancer Fund of America of Powell, Tenn. Records show that Children’s Cancer Fund of America received about $5.4 million in cash donations and $2.2 million in non-cash donations in 2007. She reported direct cash to patients at about $382,000, or about 7 cents of every $1.00 raised. Fundraising expenses were reported at nearly $6.3 million, with $3.4 million going to Associated Community Services.
Children’s Cancer Fund of America, Cancer Fund of America and Cancer Fund of America Support Services are all considered national charities by the BBB. All three failed to provide information to determine if they meet the BBB’s charitable “Standards of Accountability.”
Recent news accounts say that James T. Reynolds Jr. recently became head of yet another cancer organization, this one in Mesa, Ariz., and called The Breast Cancer Society. That charity has not operated long enough to file a federal report with the IRS.
The BBB offers the following tips to persons receiving charitable solicitations: