Two Washington area cancer charities spend too much of their income on fund-raising and too little on research, according to a Minnesota study group and reports by a national charities watchdog group.
The Minnesota Charities Review Council, a nonprofit watchdog group, said in a report issued Wednesday that the National Foundation for Cancer Research in Bethesda and the the American Institute for Cancer Research in Falls Church do not meet the council's standards on the percentage of gross income allotted by charitable organizations for research.
Spokesmen for the charities said their expenses were high because they were relatively new and needed to fund expensive start-up operations.
Harold Adams, the Minnesota council's executive director, said yesterday that these two charities along with three others, the AMC Cancer Research Center in Lakewood, Colo., the United Cancer Council in Carmel, Ind., and the American Cancer Research Funds in Armonk, N.Y. (which has used a Washington mailing address) "stood out in terms of their spending practices."
Adams said that the council, which set a standard of 70 percent of gross income to be spent on research, examined 13 or 14 cancer charities that solicit contributions in Minnesota. He said the financial statements submitted by the charities to the council show that the American Institute for Cancer Research spent just under 16 percent, or approximately $1.5 million of its $9.6 million income, on research, and the National Foundation for Cancer Research spent 40 percent, or approximately $5.6 million of its $14.2 million. The figures represent income from 1984.
Adams said, "Of course 70 percent is an ideal figure, but these five organizations stood out as being particularly out of line for a charity."
The council's findings cannot prevent charities from operating in Minnesota but are meant to be a consumer service.
A national organization, the National Charities Information Bureau based in New York City, said the two Washington-based groups have also failed to meet many of its standards on research expenditures. Ken Albrecht, the group's president, said his organization reviews financial statements of more than 400 charities and sets a standard that not more than 30 percent of gross income should be used for fund-raising.
A report issued last October by the national group found the National Foundation for Cancer Research did not pass standards for "reasonable program management and fund-raising expenses," Albrecht said.
Albrecht said that another report from June 1984 found the American Institute for Cancer Research had "problems similar to those of the National Foundation." Those reports were based on 1983 figures.
John Beaty, general counsel for the National Foundation for Cancer Research, said that he has not seen the Minnesota report, but is familiar with the national study. He said the 10-year-old group must spend "a great deal of money on direct-mail to get contributions. We are fairly new, and our publicity simply costs quite a lot." Beaty said the foundation had about 80 research contracts at hospitals and universities across the United States. He added that he believed a recommendation of 70 percent of gross income spent on research was "nearly impossible," and that 40 or 50 percent "would seem more reasonable."
John Lough, a spokesman for the institute said that the organization spends "a lot on direct mail, particularly since we're only in our third year. We need name recognition. We also publish a newsletter, which takes up 44 percent of our gross." Lough said the institute, which emphasizes the effect of diet and nutrition on cancer, faces "problems no different from any new research group."