The Better Business Bureau (BBB) is warning donors to be wary of making contributions to The Breast Cancer Society, a charity that uses most of its cash to pay professional fundraisers’ fees, employee salaries and other administrative costs.
More than 85 cents of every dollar in donated cash went to pay the charity’s fundraising costs in 2010, with less than a nickel going directly to benefit cancer patients and their families.
Since its creation four years ago, the Arizona-based charity has grown into one of the largest breast cancer charities in the nation. It received more than $48 million in cash and product donations in 2010. The charity solicits money from donors across the country, including those in Missouri and Illinois.
October has been designated Breast Cancer Awareness Month, the focus of numerous special events and other efforts designed to draw attention to the disease.
High fundraising costs can be a warning sign that a charity may not be effective in providing direct help to its constituents, said Jim Judge, BBB Charity Review Director.
“Most donors want to see their money used to help people, rather than disappear into the coffers of for-profit fundraising companies,” he said. The BBB’s national Wise Giving Alliance was unable to determine whether the charity meets the BBB’s Standards of Accountability because it has not responded to requests for information.
The charity is based in Mesa, Ariz., and solicits donations through telemarketers and direct mail companies. The telemarketer that gets most of its business, Michigan-based Associated Community Services, has been targeted by several attorneys general in recent years, usually due to concerns about misleading fundraising.
The Breast Cancer Society’s president is James Reynolds II, former vice president of the Cancer Fund of America charity of Knoxville, Tenn., which was founded by his father. The BBB issued a warning about Cancer Fund of America two years ago because of the small percentage of that charity’s cash donations used for charitable work.
The salary and compensation package for James Reynolds II at The Breast Cancer Society has tripled in the past three years, to $364,000 in 2010 from $121,000 in 2008.
The charity reported that about $32 million of its revenue came in the form of donated products (such as medical supplies) in 2010, leaving about $16.5 million in cash revenue – most of that generated through telemarketing and direct mail campaigns. The charity reported that it spent about $14.1 million for fundraising in 2010. It also reported more than $700,000 in employee compensation and benefits, $66,000 in accounting and legal expenses, $83,000 in insurance and $59,000 in office-related expenses.
The Breast Cancer Society reported its program service expenses – expenses used to meet its charitable mission – were about $33.5 million last year, with $31 million of that total in the form of medical supplies which the charity obtained from other businesses and paid to be shipped to Central America, the Caribbean and Western Africa. It is unclear whether the charity ever had physical custody of the items, or if it simply paid procurement fees to a supplier to aid in shipping and distribution. Another $477,000 in non-cash assistance went to women inside the U.S.
In addition to the procurement fees, the charity reported it gave $20,000 to two cancer organizations and $374,000 in cash grants to patients.
The BBB has asked Reynolds for a breakdown on specifically what in-kind, donated items the charity distributed. Reynolds has not responded to that request.
On its website, The Breast Cancer Society describes itself as “one of the only national breast cancer charities in the U.S., with a primary focus on providing direct help and financial aid to those suffering from breast cancer.”
The website says it takes a “two-pronged approach that focuses on direct patient care and cancer research” and “is able to help cancer patients today and also funds research that prepares for tomorrow.”
Associated Community Services of Southfield, Mich., raised nearly $12.7 million for The Breast Cancer Society in 2010, making it by far the charity’s top fundraiser. About $7.1 million of that money was paid to Associated, while the charity reported its share at about $5.6 million. But the charity had to use a large portion of what it received for other fundraising-related costs, including mailing expenses.
Associated also has been the biggest fundraiser for Cancer Fund of America, Reynolds’ former charity. Attorneys general in Iowa, Oregon, Ohio, Connecticut and Missouri have taken action against Associated.
Three years ago, Associated agreed to pay Missouri $100,000 for continuing to engage in “manipulative, high-pressure fundraising tactics when calling Missourians who had asked not to be called.”
The charity did not respond to BBB questions about its operations, but Reynolds said in an email that the charity was “working through an application process” with the BBB’s Wise Giving Alliance.
The BBB offers the following advice to consumers considering donating to breast cancer charities:
- If you are solicited by a telemarketer, ask the names of both the fundraiser making the call and the charity he or she is representing. Ask how much of your contribution goes to the charity and how much is retained by the fundraiser.
- If you are solicited by mail, understand that a portion of your contribution may go to the for-profit company assigned to run the campaign. Call the fundraiser or charity and ask how much of your money will be going to the charity.
- Contact the charity directly to find out how it uses donations from the public. Will it go to direct aid to families, to buy medical supplies, for education or for research?
- Check out the charity through the BBB’s Wise Giving Alliance through give.org or bbb.org.
About the BBB
The Better Business Bureau, founded in 1912, is a champion for ethics and trust in the marketplace. Only businesses that meet the high BBB standards are invited to become BBB Accredited Businesses. Today, 123 BBBs across the United States and Canada rate more than 4 million local and national businesses and charities with scores ranging from A to F. Only a BBB Accredited Business may elect to participate in BBBOnLine, one of the most trusted and recognized Internet seal programs in the world.
The BBB serving Northern Colorado and Wyoming topped 1.1 million instances of service to consumers in the past 12 months. These services include reliability reports on local companies and charities, access to companies that can be trusted by industry, help with dispute resolution, and trustworthy information on consumer and business topics.
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Luanne Kadlub, BBB media relations manager, 970-488-2044 lkadlub@wynco.bbb.org
