Troubling JDRF financials


#1

This is very important information for anyone who frequents this forum.

Juvenile Diabetes Cure Alliance

2017 JDRF Research Grant Spending Remains at Decade Lows
January 19, 2018

Summary

JDRF released their 2017 audited financial statements this week.
JDRF income grew by 5%, from $197.4m to $206.8m, generated primarily from fundraising activities.
Research grant spending (the amount of money used to fund research) also grew by 5%, from $75m in 2016 to $79m in 2017.
Despite the modest increase, grant spending remains at decade-low levels, down from $156m ten years ago in 2008.
The percent of income used for research grant funding, 38% in 2017, was sustained at record low levels for the third year in a row, as shown in the chart below.
This decrease in spending has not been acknowledged or explained to donors.

RESEARCH GRANTS AS PERCENT OF REVENUE
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This report provides an overview of JDRF’s 2017 financial statements, released this week. This report, based on publicly available tax and financial documents, show how JDRF generates its revenue and how it utilizes those funds. Financials are audited and approved for release by the accounting firm KPMG LLC.

There are two key highlights related to research grant spending:

  1. RESEARCH GRANT SPENDING
    The main news is that research grant allocation has remained at significantly lower levels for three consecutive years, as compared to the previous ten years (2006-2014) when the JDCA began tracking JDRF financials (See appendix A). In 2017, both JDRF income and JDRF research grant spending increased by 5%, as shown in the bullets above. Although any increase in research spending is a positive step forward, the amount of increase is largely immaterial, as it still represents a $19 million decline from 2014, and $77 million less than the 2008 peak year.

  2. RESEARCH GRANTS AS PERCENT OF REVENUE
    Research grants as a percentage of revenue, which is an indicator of the priority level of research grants versus other areas of spending, did not increase and remains at 38%. This number is down from 44% in 2014 and 64% from the 2008 peak year.

Our principal concern with the historic and sustained decrease in research grant funding is that the continued lack of alignment with donor priorities, if not corrected quickly, will accelerate a decline in donations.

  1. Research Grant Spending vs. Salary and Administration

Over the past decade, salary and administration costs have increased by 71%. This number, as illustrated in Appendix B below, is directly correlated to the 67% decline in research spending.

The high compensation level for diabetes non-profit executives places them in the top 1% of all earners in the United States. Consequently, JDCA believes it is important to hold these highly-compensated executives to a level of accountability and performance commensurate with their salary. To date, very little executive compensation is tied directly to performance and executives are paid the majority of their compensation whether or not they meet their main objectives or make progress toward a cure for T1D. As long as compensation remains untied to performance, executives will remain unaligned with donors who want resources allocated to T1D cure research above all else.

Conclusion

The decrease in JDRF research spending is indicative of either an intentional shift to a new strategy or an unintentional drift away from the long-standing focus on funding research grants. Either way, the JDCA believes this change should be clearly explained to donors.

This year, over 120,000 people signed the JDCA More for a Cure Petition, asking the JDRF, ADA, and other major T1D non-profits to significantly increase the percent of cure research spending.

We encourage all JDCA readers to forward this email to their local JDRF chapter heads, as well as the JDRF corporate offices, to ask for a public statement explaining this historic decline in research funding.

JDRF local chapters can be found at this link: http://www.jdrf.org/chapter-select/

The JDRF corporate email is: info@jdrf.org


#2

This is how a nonprofit SHOULD be run:

The Rotary Foundation funds a number of worthy projects, the largest of which is the effort to eradicate polio.

All money donated to the Rotary Foundation is placed in a trust, where it remains for three years, earning interest. At the end of three years, donated funds are released to be used to fund projects. The interest earned in the meantime is used to cover all (repeat, ALL) administrative expenses. The net result is that 100% (one hundred percent) of each donated dollar is used to fund PROJECTS.

This model has been in effect for many years. Why don’t other nonprofits use it, or something like it?

Good question!


#3

This is just another example of the devolution of once great service organizations. Bureaucracy creep doesn’t just happen in government.


#4

Not only is the utterly and absolutely inadequate percentage of funds available devoted to actual research by many charitable organizations unacceptable, but what they in fact do with their research funding is idiotically wasteful. I can’t count the number of times I have read medical journal articles with titles like ‘Relationship between uric acid levels and fingernail growth in type 1 diabetics,’ only to find at the end of the article a statement like ‘The authors wish to thank the ‘Run for a Cure’ Society for funding this research,’ even though the research couldn’t lead to a cure in eighty trillion years.

The bottom line is that there is no way to do anything to support a cure for diabetes, since your efforts will be intercepted, diverted, and wasted by all the intermediaries between you and the actual cure research.


#5

Well, despite my aggravation at the data presented, it heartens me that so many people seem to have read this post. It also makes me wonder if there isn’t a way to somehow demand more from advocacy organizations.

JDRF has moved away from the “finding a cure” mission statement from the early days. Now it functions in a promotional capacity for companies who absolutely will not celebrate the finding of any cure. And there’s another troubling paradigm shift I didn’t get the memo about.


#6

A long-time member here once attributed this mission statement to a prominent diabetes advocacy organization that I will not name:

“[name of organization here]—keeping blood sugars high to support our corporate sponsors.”


#7

And there the slope gets slippery. Imagine those upper level, closed-door meetings? Keep 'em alive. I don’t care how we do it. We’ve got a captive audience. We just gotta keep 'em alive as long as we can.


#8

Often those articles may be side investigations from a main study with a different purpose. Scientists try to maximize the science for their grant dollar, as well as per participant effort/time. So unless you look at it from the grant side of things (see the lists of specific grants funded and what papers are tied to those grants), it’s hard to get a clear picture of how useful the money that is going to grants is.

I agree with the broader point that those numbers though would make me think twice about donating to JDRF.