Since 2021 there have been many disturbing revelations about how St. Jude’s Hospital generates, hoards, and spends billions of dollars in donations (see 1, 2).
Thanks for ProPublica for its most recent exposé on the ongoing issue.
St. Jude Stashed Away $886 Million in Unspent Revenue Last Year
New documents show that St. Jude Children’s Research Hospital’s reserves grew to $7.6 billion, as other children’s cancer nonprofits struggled to raise cash.
Alex Bandoni/ProPublica (Source Images: St. Jude’s 2020 Form 990 screenshots captured by ProPublica)
by David Armstrong and Ryan Gabrielson
Series: St. Jude’s Unspent Billions
Behind the Hospital’s Claims to Donors
Update, June 10, 2022: The growing size of St. Jude’s reserve fund prompted a charity watchdog to downgrade the nonprofit’s rating one letter grade, from B to C. CharityWatch, in a report posted on its website on Friday, explained that it issued the lower grade because St. Jude’s assets now exceed three years’ worth of operating expenses. The rating organization also said St. Jude does not meet its benchmarks for governance and transparency.
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In July 2021, St. Jude Children’s Research Hospital announced to fanfare that it had just finished raising $2 billion in donations, a single-fiscal-year record for the nation’s largest health care charity. “Solving pediatric cancer is a global problem — a multi-trillion, multi-year problem,” Rick Shadyac, chief executive of St. Jude’s fundraising arm, told the Associated Press at the time. “The way we look at it is: If not St. Jude, then who?”
Financial disclosures newly released by St. Jude, however, show $886 million of the hospital’s record $2 billion-plus in revenues last fiscal year went unspent. Those surplus dollars instead flowed to the hospital’s reserve fund, which helped it grow to $7.6 billion by the end of June 2021. That’s enough money to run St. Jude’s 77-bed hospital in Memphis at last year’s levels for the next five years without a single additional donation.
The impressive growth in fundraising raises new concerns about the amount of money that the charity has put aside for its rainy day fund.
Last year, ProPublica reported that St. Jude had accumulated billions of dollars while many families of young patients treated at the hospital struggled financially. Parents told ProPublica that they’d exhausted savings and retirement accounts and borrowed from family and friends, despite St. Jude’s much-publicized pledge to alleviate many of the costs associated with treatment “because all a family should worry about is helping their child live.” St. Jude said they provided generous benefits to families, but cannot cover all financial obligations that a family experiences during a child’s illness. In response to the story, St. Jude significantly increased its benefits for families, including more support for travel and housing.
Some researchers, oncologists, health care advocates and families of patients complain that St. Jude’s fundraising makes it more difficult for other pediatric hospitals to raise money for their operations. St. Jude competes for fundraising dollars directly against other children’s hospitals, some of which have significant numbers of patients in clinical trials and their own research divisions focused on pediatric cancer care. To visualize just how much St. Jude outstrips its competitors: In 2020, U.S. News and World Report’s ranked the nation’s best children’s cancer centers. St. Jude’s, ranked tenth, pulled in more than the combined total of the nine hospitals ranked above it , according to financial records filed with the Internal Revenue Service.
“Donors all want to get the biggest bang for their buck,” said Ge Bai, a professor of accounting and health policy at Johns Hopkins University. “It’s time for St. Jude to respect donors’ preferences and stop hoarding. Effectively and sufficiently spending money on the core mission is the only way to deserve donors’ trust and sustain their generosity.”
In a statement, St. Jude said the large reserve was a prudent cushion against swings in the stock market as well as the economic uncertainties created by global crises like…
Continue reading the full story [icon name=”arrow-right” prefix=”fas”] As Its Patients’ Families Struggled to Pay Medical Bills, $886 Million Went to St. Jude’s Hospital Reserve Fund in 2021 – Activist Post