For future reference, here is some select financial information on the charities that have been accused of overvaluing donated medicine.
In March 2018, the Attorney General of California filed cease and desist orders against three charities and a complaint against one.
The complaint was resolved with a stipulated judgment the same day the complaint was filed. Resolution? The National Cancer Coalition agreed to dissolve.
Listed in this post is some data from the most recent set of financial statements available at the charities’ web sites along with the 2015 info, which is the latest year cited in the cease-and-desist orders.
Since the cease-and-desist orders allege material misrepresentation in the audited financial statements, the auditor is also listed. Therefore this is an audit issue as well as an accounting issue.
I will make an educated guess that the 2017 financial statements for MAP and FffP will not be available until after the impact of the AG’s cease and desist action is assessed. Looking in from the outside, it seems to me like this issue would constitute a material subsequent event.
MAP International
9/30/16 audited financials – latest available on web site –
- $606M revenue of which $596M is donated inventory (98.3%)
- $519M expenses, of which $508M is donated inventory
- Cash expenses are about $11M
- program services are 99.5% of total expenses
- auditor: Capin Crouse LLP, Lawrenceville, Georgia office; clean opinion dated 2/2/17
- $547M revenue of which $535M is donated inventory (97.8%); of the GIK is drugs and medical supplies.
- $486M expenses, of which $474M is donated inventory
- Cash expenses are about $12M
- program services are 99.4% of total expenses
- auditor: Capin Crouse LLP, Atlanta office; clean opinion dated 1/29/16
Full disclosure (Dates updated and corrected on 11/17/18): I worked for Capin Crouse from 1989 through 2012 2002. I did not work on the MAP audit. Don’t recall if it was a client of Capin Crouse back then.
Catholic Medical Mission Board
9/30/17 audited financials – latest available on web site –
- $604M revenue of which $569M is donated inventory (94.2%)
- $587M expenses, of which $556M is donated
- Cash expenses are about $31M
- program services are 98.3% of total expenses
- Auditor: Marks Paneth, New York office; clean opinion dated 12/20/17
- $290M revenue of which $261M is donated inventory (90.0%); all of the GIK is drugs and medical supplies
- $319M expenses, of which $270M is donated
- Cash expenses are about $49M
- program services are 96.9% of total expenses
- Auditor: Marks Paneth, New York office; clean opinion dated 12/16/15
Food For The Poor
12/31/16 audited financials – latest available on web site –
- $994M revenue of which $854M is donated inventory (85.9%)
- $980M expenses, of which $865M is donated inventory and $40M is grants in ‘goods and aid supplied’ program
- Other cash expenses are about $75M
- program services are 95.6% of total expenses
- joint costs of $10.8M are allocated $4.9M to program, $1.0M to G&A, and $4.9M to fundraising.
- Auditor: Mayer Hoffman McCann, Boca Raton office; clean opinion dated 3/31/17
The joint costs allocated to program are immaterial in relation to the inventory valuation issue, but might warrant a future look by anyone interested in such issues.
- $1,158M revenue of which $1,033M is donated inventory (89.2%); of the total GIK, $818.5M is drugs and medical supplies according to Schedule M of the 990 (70.6% of total revenue and support)
- $1,159M expenses, of which $1,050M is donated inventory and $36M is grants in ‘goods and aid supplied’ program
- Other cash expenses are about $73M
- program services are 96.4% of total expenses
- joint costs of $10.8M are allocated $4.8M to program, $1.1M to G&A, and $4.9M to fundraising.
- Auditor: Mayer Hoffman McCann, Boca Raton office; clean opinion dated 3/29/16
National Cancer Coalition
9/30/14 990 information – latest 990 available at Guidestar
- FY 13 total revenue – $123M
- FY 14 total revenue – $ 12M, which is a 90.2% drop
9/30/14 990 –
- $12.1M total revenue, of which $9.7M is donated drugs and medical supplies (80%)
- Cash income is $2.4M
- $17.8M total expenses, of which $15.1M is grants. In addition, 4 listed telemarketing firms were paid $2.0M per Part VII, Section B.