Follow the Donations: Accounting for the Monies Given to the Largest Research FoundationsFriday, April 13, 2012
The Juvenile Diabetes Cure Alliance (JDCA) provides reports detailing where outside donations to the biggest type 1 diabetes research foundations and associations are being allocated. The not-for-profit organization has just recently revealed one of the more intriguing trends showing while research donations has stayed close to static, monies being used specifically for cure research grants have gone down as the focus has shifted solely from a cure to include other elements such as disease management.
By: John Parkinson, Clinical Content Coordinator, DiabetesCare.net
If anything, the global economy of the last few years has prompted everyone to take the time to reexamine their finances. Whether it’s a Fortune 500 company looking at its quarterly earnings report or individuals looking at their personal budgets, going over finances and reconfiguring priorities has become a common, collective thread today.
A new not-for-profit organization, JDCA, is taking this same approach in looking at the largest type 1 diabetes research foundations and seeing where outside donations are being allocated. The JDCA has created an accounting model based upon how public companies that trade on Wall Street report their earnings and expenses. While the research foundations don’t have earnings, they do have annual donations. Therefore, JDCA is publishing reports showing how much is being donated overall to these research foundations, and whether it is being used specifically for research grants for a cure, or in other areas. JDCA has put together one category that incorporates these other areas and they include Education, Information, Advocacy, and Awareness.
The biggest research foundations the JDCA has focused on to date are the American Diabetes Association (ADA), Juvenile Diabetes Research Foundation (JDRF) International, Diabetes Research International Foundation (DRIF), and Joslin Diabetes Center. It is important to note this information is publically disclosed by the foundations in its own reports and that it can be researched by anyone. What makes JDCA’s reporting unique is that a former Wall Street business analyst (now working for JDCA) is looking over the research foundations’ reporting and offering a more concise understanding of the accounting for the public to read.
JDCA believes many donors and even those within the foundations themselves may not be aware of where the donations are being allocated. For example, one of the more interesting findings from a recent JDCA report is that research grants for a cure for two of the biggest research foundations (ADA and JDRF) have gone down over the last few years and that spending in the other categories have gone up.
JDCA sees itself as the “voice of the donor for a cure”, and as part of its overall strategy, the alliance is cultivating relationships with individual donors.
JDCA’s Cara Murphy is a spokesperson and senior associate editor, who writes a blog, aids in writing the reports, and interviews people in the diabetes industry.
DiabetesCare.net talked with Murphy (pictured, lower right) about how JDCA was formed, the organization’s mission, and specific findings in recent reports about research grants from the biggest type 1 diabetes research foundations.
DiabetesCare.net: Can you provide an overview of your organization in terms of your philosophy, size of the organization, and goals?
Murphy: The JDCA is a nonprofit made up of people dedicated to achieving a type 1 diabetes cure. We believe that a majority of donors to the diabetes non-profits give for the purpose of a cure and that their intentions should be heard and made a reality. Our research has shown that from 2008 to 2011, funding for cure research declined by nearly 50% for the four major type 1 diabetes charities that we follow (ADA, DRIF, JDRF, and Joslin). The JDCA believes that this trend must be reversed in order to focus research and accelerate the development of a type 1 practical cure. Currently, only 5 out of 332 projects in human clinical trials could meet our definition of a practical cure.
We are a small but growing organization with 10 full-time and part-time employees.
Our goal is to unite the voices of donors for a cure in order to focus research and accelerate the development of a cure for people now living with type 1 diabetes. We provide independent research and analysis of the type 1 diabetes charitable landscape. Our research is intended to inform donors about how their donations are being used. Knowledge is power; informed donors can make a difference to ensure that the purpose of giving is realized.
DiabetesCare.net: What was the genesis for developing this organization?
Murphy: The JDCA was founded in 2011 by Brian Kelly. Brian’s son was diagnosed with type 1 diabetes in 2006 at the age of 2. After his son’s diagnosis, Brian researched the disease and what was being done to find a cure. He found that the diabetes non-profits held well-planned and organized fundraisers with a community of passionate participants. He was encouraged by the meaningful financial support from donors, most of whom had a personal connection to type 1.
However, the same systemized strategy and focus used to raise funds was lacking in cure research allocation.
Brian hired a former business analyst to study the charitable organizations and see what needed to be done to maximize donor contributions and achieve the goal of a cure. The JDCA works to align the intentions of donors giving for a cure with how the diabetes foundations allocate research funding to make the diabetes charitable community even more effective. To achieve this mission, we have adopted a Wall Street paradigm to bring a fresh and focused perspective to help maximize donor and charitable efforts toward a type 1 cure.
DiabetesCare.net: Where is the accounting for the allocation of funding for the various research foundations located?
Murphy: The business analyst who did the initial work is now our director of research and analysis. Most of the accounting information is up online for the individual foundations. It is usually attached to their annual reports with their audited financial statements. Some of the organizations have information from past years, and others only have for the current year. We will likely publish a report in the near future about the availability of that information and where it can be found for donors.
DiabetesCare.net: As JDCA’s mission states, …”to direct donor contributions to the charitable organizations that are most effective at allocating funds to research opportunities that maximize chances of curing type 1 diabetes by 2025.” Does JDCA see itself in the role of financial watchdog in looking over the biggest type 1 diabetes research associations/foundations?
Murphy: The term “watchdog” often has a negative connotation; the JDCA seeks to represent the voice of the donor for a cure. We want the voices of individuals who are giving for the purpose of a cure to be heard. Our voices are more powerful in unison than individually.
DiabetesCare.net: In a recent JDCA blog, the alliance pointed out that the Education/Information/Advocacy/Awareness has increased for both the American Diabetes Association and the JDRF and that direct funding for grants has gone down. Does the JDCA see this as problematic or does it see it as a function of the varying goals these organizations are trying to include along with their goal of a cure? How does JDCA characterize this?
Murphy: That blog is based on our report “The Disconnect Between the Cure Message Used to Solicit Donations and the Allocation of Those Donations” (dated March 22, 2012). The report explores the messaging used in most fundraising events (which is overwhelmingly for a cure) and how those donations are used. Significant portions of donor contributions are used toward activities that are unrelated to a cure. We believe that money that is raised for a cure should be used towards projects that aim to achieve that goal.
It’s not that we believe that Education/Information/Advocacy/Awareness should not be funded. Our concern is that funding for cure allocations has declined over the past four years. The pledge to work for a cure is the dominant messaging used at fundraising events as well as an important priority for many donors. We want to see this trend reversed so that meaningful progress can be made to achieve a practical cure for people now living with the disease.
DiabetesCare.net: Has the JDCA communicated its findings to the research foundations about the research grants versus funding for other areas?
Murphy: Yes we are in contact with all the foundations and we speak to most of the organizations after we publish each of the reports. All of the organizations are on our mailing lists, and they get all of our reports. JDRF and ADA are huge organizations and fund numerous projects so some people on one research team might not be aware of other research that is going on. That is part of our goal, to not only inform donors, but to inform volunteers and members of the organizations that see these spending trends overall.
DiabetesCare.net: Have you gotten any feedback from them?
Murphy: For the latest report where we reported the decrease in spending for grants trend, we haven’t gotten any feedback yet, but the mailing is just being delivered this week.
DiabetesCare.net: What does JDCA believe is the percentage of funding that should go into research grants?
Murphy: Today, our focus is to reverse the trend of shrinking funding for type 1 cure research. Most people who donate want to contribute to a type 1 diabetes cure; however, the actual trend in spending does not reflect this intention. We believe that a greater focus on a type 1 cure, and more specifically a practical cure with a specific definition and cure by date, would accelerate its development.
DiabetesCare.net: In looking at this trend of less monies going directly for research grants for a cure, how would JDCA like to reverse the trend and increase funding for type 1 research?
Murphy: We feel that if we do inform donors and let them know what it is being raised for and how it is being spent, they can take the steps to specify their donations. If they choose, they can ask the foundations that as a stipulation of their donation, their money go directly towards a research grant or something else. On our website, we offer a Donor Action Letter, which can be attached to donations to specify that they only be used towards practical cure research.
DiabetesCare.net: Does JDCA have any plans to examine other research institutions other than Joslin, ADA, JDRF, and DRIF?
Murphy: Yes, stay tuned. We are in the midst of expanding the scope of our research, so please feel free to share with us additional organizations that you would like us to look at.
DiabetesCare.net: Are there any new projects JDCA is working on or plans for this year?
Murphy: Yes, we are always working on new projects and researching the type 1 diabetes cure landscape in order to identify the obstacles that stand in the way of a type 1 diabetes cure. We regularly publish research reports and are building an alliance of donors to unite our voices and encourage progress. We will keep you posted and encourage everyone to join us.
For people interested in learning more about JDCA or becoming part of the alliance, you can go here.