LA's Financial Interests

[Race Radio]

All charities that I know of calculate their overhead as being their own cost of running the operation. And the rest is donated to the intented cause. And LAF? The 81% includes items such as:

- salaries and wages
- travel
- advertising
- payroll taxes
- bank service fees
- retirement plan contributions
- professional fundraising fees

 

[MacRoadie]

So, in simple terms, the LAF licenses for-profit entities like Nike and Demand Media to use the "livestrong" brand for their own for-profit use and those entities pay the LAF a fee for said use. Once the fee is paid, livestrong goes on whatever the licensee chooses and all profits go to the licensee. The LAF isn't producing or selling any of these items. How noble.

Wristbands, chalkbots, placards, yellow chalk, t-shirts, helmets, bibs and jerseys, and whatever else can have a yellow band silkscreened on to are all produced by these for-profit entities with the express intention of generating profits for themselves.

Someone brought up the MDA. Somehow, I like the idea of corporations writing big checks directly to the MDA for the use of the MDA, rather than the idea of someone slipping Jerry a licensing fee and selling running shoes on the image of a child suffering from muscular dystrophy.

Unfortunately, as was also pointed out, children in hospital beds and wheelcahirs doesn't sell sexy...

 

[kurtinsc]

All charities that I know of calculate their overhead as being their own cost of running the operation. And the rest is donated to the intented cause. And LAF? The 81% includes items such as:

- salaries and wages
- travel
- advertising
- payroll taxes
- bank service fees
- retirement plan contributions
- professional fundraising fees

Check yourself. Page 27/33 of http://www.livestrong.org/pdfs/4-0/2008-2009combinedauditreport. You get the 81% via diving "Program expenses" by "Total" - $28,833,066 / $35,284,215.

Their own web site info about "Where the money goes" tries to pitch this way of accounting as the charity-standard - 81% is actually good and looks great on a chart like this (the numbers aren't an exact match with the audit report, but close):

http://www.livestrong.org/What-We-Do/Our-Approach/Where-the-Money-Goes

I think you misunderstand "program expenses".

Program expenses are the expenses related to the charity programs... that is what the money is supposed to go to. That's what you donate for... programs.

The LAF categorizes what you call overhead as "Administrative costs" and "fundraising costs" That's the 19% number, not the 81% number. You are misunderstanding their reports. They have 2.5 million for administration, and 4.5 for fundraising expenses... the rest gets spent on their programs. You may not thing their phonebanks to help people with insurance issues are useful, or the packets of information they send to people with cancer, or their survivor centers. That's fine... but that's what the 81% number is... not travel, or anything else you listed. That's all in the administrative section.

 

[kurtinsc]

Pretty easy to have a 100% success ratio "fighting" cancer when you cherry pick the candidates ex post facto.

Cancer survivors need very little assistance compared to cancer patients.

They don't fight cancer. They provide support to those who are living with cancer or who are past it.

For example, to someone with testicular cancer, they provide information on where to go to donate sperm (in case they want children after treatment), they provide therapy sessions, they let them know more detailed information about treatment options, connect people to clinical trials to get them treatment options that are not available through regular healthcare channels, insurance help, employment descrimination help, connecting people with financial assistance for payment of medical bills, and in the worst case scenarios they provide bereavement services for family members.

 

[kurtinsc]

They don't pay for the chalk? The livestrong van that drove the ToC course urging people over the loudspeaker to "Get ready to cheer for Lance"?

Hard to tell where the money goes. Very little detail, just awareness.......awareness of the Lance brand.

No, they don't pay for the chalkbot.

In case you missed it... it's called the NIKE LIVESTRONG CHALKBOT. It was payed for by Nike (which is mentioned in virtually every article about the stupid thing).


As for the van... I can't find a mention of it anywhere, but I'd doubt that LAF paid for it. To be honest, that's simply not their mode of operation. They have the ability to license out their brand and get paid by other companies... so that THOSE companies can pay to market their brand. There simply isn't a reason for them to spend money on something like that when others will pay them to do it for them.

 

[kurtinsc]

That's the whole problem. How many other charities have a trademark that they license for money? LAF is a business pretending to be a charity. It sells products and services for money. It does a bit of "volunteer" work like most other businessess to stay in good standing in the society.

It has a brand and a registered trademark that it aggressively defends - and uses donors' money for legal fees to fend off serious challenges to its intellectual property by trademarks such as "PURRSTRONG" and "PAWSTRONG". The fact that it licenses its trademarks to other businesses, in the name of "cancer survivorship" would be harmless if it wasn't done to benefit another for-profit business enterprise called Lance Armstrong.

More do this then you realize. For a fun exercise, look up the various trademarks related charity lawsuits on google. Michael Jackson's charity, Princess Di's charity, Christopher Reeve's charity, the Red Cross, the McFest charity concert and many others have been involved in trademark lawsuits. Here's one of my favorites... a charity suing another charity:

"A charity that provides free vacations to injured veterans and their families has been sued by another philanthropic group with a similar name.

The lawsuit filed last month in U.S. District Court in Nebraska by Jacksonville, Fla.-based Wounded Warrior Project Inc. said Wounded Warriors Inc. has “capitalized on the confusion” created by their similar names.

Wounded Warrior Project, which also goes by WWP Inc., registered trademarks on its name and logo in September 2005, which prevents their use by other groups."

Pretty much every charity aggressively defends their trademarked brands, regardless of how much money they make off it. Nobody wants to have their charities reputation hurt by the actions of others.

 

[Tim_sleepless]

I think you misunderstand "program expenses".

Program expenses are the expenses related to the charity programs... that is what the money is supposed to go to. That's what you donate for... programs.

The LAF categorizes what you call overhead as "Administrative costs" and "fundraising costs" That's the 19% number, not the 81% number. You are misunderstanding their reports. They have 2.5 million for administration, and 4.5 for fundraising expenses... the rest gets spent on their programs. You may not thing their phonebanks to help people with insurance issues are useful, or the packets of information they send to people with cancer, or their survivor centers. That's fine... but that's what the 81% number is... not travel, or anything else you listed. That's all in the administrative section.

It seems pretty clear that they are allocating/charging a lot of overhead-like costs to programs... which has some logic, otherwise a charity could make itself look very efficient by just giving all of it's money to other charities/bodies with their own set of overheads, and not carrying out any work itself. Of course a lot of costs are going to be pretty fungible anyway... where buildings are shared between funding and programs for example

Functional expenses for the year ended December 31, 2009 consisted of the following:
Total Program
Management
and General Fundraising
Legal and professional $ 9,418,842 8,535,457 203,068 680,317
Salaries, wages, and benefits 5,958,391 4,387,556 222,831 1,348,004
Grants and awards 4,992,484 4,992,484 - -
Advertising 4,195,187 3,359,191 434,287 401,709
Travel 1,922,995 1,652,246 83,069 187,680
Contract services 1,218,719 947,068 88,428 183,223
Technology 1,213,003 851,690 188,885 172,428
Other rent 1,016,554 698,059 142,639 175,856
Bad debt/taxes/miscellaneous 519,493 211,779 30,037 277,677
Bank service fees 486,200 294,423 61,002 130,775
Notebook and merchandise
giveaway 481,775 467,857 2,481 11,437
Depreciation and amortization 450,118 124,153 130,023 195,942
Professional fundraising fees 415,874 284,607 13,416 117,851
Payroll taxes 362,016 268,238 12,912 80,866
Occupancy 349,529 95,303 101,537 152,689
Printing and publications 323,250 259,085 23,876 40,289
Postage and parcel post 267,661 207,130 15,955 44,576
Retirement plan contributions 134,141 100,261 4,612 29,268
Telephone 116,339 64,768 28,141 23,430
Insurance 95,631 55,430 14,843 25,358
Permits 44,337 23,939 5,808 14,590
Entertainment 12,904 12,253 330 321
Other 1,288,772 940,089 138,392 210,291
$35,284,215 28,833,066 1,946,572 4,504,577

 

[Tubeless]

I think you misunderstand "program expenses".

Program expenses are the expenses related to the charity programs... that is what the money is supposed to go to. That's what you donate for... programs.

The LAF categorizes what you call overhead as "Administrative costs" and "fundraising costs" That's the 19% number, not the 81% number. You are misunderstanding their reports. They have 2.5 million for administration, and 4.5 for fundraising expenses... the rest gets spent on their programs. You may not thing their phonebanks to help people with insurance issues are useful, or the packets of information they send to people with cancer, or their survivor centers. That's fine... but that's what the 81% number is... not travel, or anything else you listed. That's all in the administrative section.

That's how they'd like people to believe it. 19% overhead, 81% to charity. But look at the some of the details on page 27/33, items that are included in the "Program" expenses (the 81% portion) which total $28,833,066. It's a very simple table that's difficult to misinterpret:

http://www.livestrong.org/pdfs/4-0/2008-2009combinedauditreport

- Salaries and wages: $4,387,556
- Advertising: $3,359,191
- Travel: $1,652,246
- Bank service fees: $294,423
- Professional fund raising fees: $284,607
- Retirement plan contributions: $100,261

To pick one baffling example - the professional fund raising fees. Why is this part of of the "Program" expenses, and not entirely in the "Fundraising" column? The "Fundraising" total also includes $117,851 from this line item, but how they choose to divide it amongst the different expense categories is weird. The only line item that's entirely contributed to the "Program" column is Grants and awards - totaling $4,992,484.

And how's "Entertainment" expenses consistent with the charity's program mission? I guess to survive executing cancer survivorship programs you need some fun on the side...

 

[Race Radio]

No, they don't pay for the chalkbot.

In case you missed it... it's called the NIKE LIVESTRONG CHALKBOT. It was payed for by Nike (which is mentioned in virtually every article about the stupid thing).


As for the van... I can't find a mention of it anywhere, but I'd doubt that LAF paid for it. To be honest, that's simply not their mode of operation. They have the ability to license out their brand and get paid by other companies... so that THOSE companies can pay to market their brand. There simply isn't a reason for them to spend money on something like that when others will pay them to do it for them.

I am not talking about the Chalkbot I am talking about Chalk. They handed out thousands of boxes of it at the Tour this year.

I saw the van at the ToC. There were no Nike Swooshes on it.

$37 million for this? Really?

http://www.livestrong.org/What-We-Do/Our-Actions/Programs-Partnerships

 

[kurtinsc]

That's how they'd like people to believe it. 19% overhead, 81% to charity. But look at the some of the details on page 27/33, items that are included in the "Program" expenses (the 81% portion) which total $28,833,066. It's a very simple table that's difficult to misinterpret:

http://www.livestrong.org/pdfs/4-0/2008-2009combinedauditreport

- Salaries and wages: $4,387,556
- Advertising: $3,359,191
- Travel: $1,652,246
- Bank service fees: $294,423
- Professional fund raising fees: $284,607
- Retirement plan contributions: $100,261

To pick one baffling example - the professional fund raising fees. Why is this part of of the "Program" expenses, and not entirely in the "Fundraising" column? The "Fundraising" total also includes $117,851 from this line item, but how they choose to divide it amongst the different expense categories is weird. The only line item that's entirely contributed to the "Program" column is Grants and awards - totaling $4,992,484.

And how's "Entertainment" expenses consistent with the charity's program mission? I guess to survive executing cancer survivorship programs you need some fun on the side...

Most of those are quite reasonable. If you have someone who's hired to meet with newly diagnosed cancer patients to provide information or someone lobbying a cancer drug provider, then their salary, retirement and expenses would be program, not administrative.

The fundraising fees though... that I have trouble understanding. They've only had that item on their financials the last two years. My guess is that it's related to costs with the "team livestrong" events, where they do athletic events that instead of having an entry fee have a requirement for certain donation solicitation levels to get in... kind of like the old cancer "swim-a-thons". They use a third party fundraising system for that... and I'm betting they have some justification to call those "programs" rather then pure fundraising.

Kind of sketchy in my mind... I do agree with you there.

As for entertainment... the LAF lobbys various entites as part of their operations. Yes... entertainment does play a roll in that.

 

[kurtinsc]

I am not talking about the Chalkbot I am talking about Chalk. They handed out thousands of boxes of it at the Tour this year.

I saw the van at the ToC. There were no Nike Swooshes on it.

$37 million for this? Really?

http://www.livestrong.org/What-We-Do/Our-Actions/Programs-Partnerships

To be perfectly honest, the help with the US insurance system alone is probably worth 37 million dollars.

I don't have cancer... but I do have diabetes. Dealing with insurance for payment of any serious disease in the US is horrendous. The companies are trying their hardest to rip you off as much as possible and make you take the financial burden that they should be covering.

Having help with that is invaluable. Twice I've fought with insurers about 30,000 dollar or more bills and in the end I've felt like I still had to pay more then I probably should have.

I imagine cancer is often worse. About 1.5 million people are diagnosed with cancer each year. If the LAF were able to save 10% of those people 250 dollars on their medical bills due to helping them with their insurance companies... that's 37.5 million dollars worth of value.

As for the chalk... again, I wasn't at the Tour and I can't find any articles about it. I can't find any pictures of the van. I can't find any pictures of boxes of chalk. All I can say is it doesn't fit their normal modus operendi.

 

[AnythingButKestrel]

They don't fight cancer. They provide support to those who are living with cancer or who are past it.

Do I really need to explain the logic of my statement?

Direct quotes from Livestrong.org:

"Together, we can beat this disease."

"Find out how you can get involved in the fight against cancer with LIVESTRONG — online or on the streets."

The uninitiated casual browser (i.e. not indoctrinated in Livestrong Newspeak(TM)) could come to the conclusion that LS.org and the LAF are in the business of actually fighting cancer. Maybe they should be a wee bit less obtuse that they're really there just to help you "deal with it."

The more I learn, the more LAF/LS.org/LS.com looks like dirtbag Scientology warmed over with a pretty yellow bow on top to make it all sugary sweet.

 

[kurtinsc]

Do I really need to explain the logic of my statement?

Direct quotes from Livestrong.org:

"Together, we can beat this disease."

"Find out how you can get involved in the fight against cancer with LIVESTRONG — online or on the streets."

The uninitiated casual browser (i.e. not indoctrinated in Livestrong Newspeak(TM)) could come to the conclusion that LS.org and the LAF are in the business of actually fighting cancer. Maybe they should be a wee bit less obtuse that they're really there just to help you "deal with it."

The more I learn, the more LAF/LS.org/LS.com looks like dirtbag Scientology warmed over with a pretty yellow bow on top to make it all sugary sweet.

Good for you.

Of course the primary sentence on their main page says:

"We fight to improve the lives of those affected by cancer."

It's at the top of every page on their site.

But yeah... obviously they're trying to mislead you.

 

[Benotti69]

Do I really need to explain the logic of my statement?

Direct quotes from Livestrong.org:

"Together, we can beat this disease."

"Find out how you can get involved in the fight against cancer with LIVESTRONG — online or on the streets."

The uninitiated casual browser (i.e. not indoctrinated in Livestrong Newspeak(TM)) could come to the conclusion that LS.org and the LAF are in the business of actually fighting cancer. Maybe they should be a wee bit less obtuse that they're really there just to help you "deal with it."

The more I learn, the more LAF/LS.org/LS.com looks like dirtbag Scientology warmed over with a pretty yellow bow on top to make it all sugary sweet.

Excellent analogy and if he gets off the Novitsky/Fed case he'll be trying to push it to a religion as hard as he can......

 

[AnythingButKestrel]

The top quote taken straight off the LS.org splash screen when I went there 15 minutes ago. That's their first message to the newcomer. What a curious way to present oneself.

 

[I Watch Cycling In July]

More do this then you realize. For a fun exercise, look up the various trademarks related charity lawsuits on google. Michael Jackson's charity, Princess Di's charity, Christopher Reeve's charity, the Red Cross, the McFest charity concert and many others have been involved in trademark lawsuits. Here's one of my favorites... a charity suing another charity:

So did Michael Jackson, Princess Di, or Christopher Reeves do private endorsement deals with trademark licencees, for their personal profit?

Cause if their charities are still generating income through trademark licencing, it's safe to assume they aren't doing private endorsement deals now.* Begs the question whether individuals, whose name is associated with a charitable brand, usually skim off a a fat slice before any $$ reach the charity.

*or are their estates are trading on their dead images?

 

[Tubeless]

To be perfectly honest, the help with the US insurance system alone is probably worth 37 million dollars.

I don't have cancer... but I do have diabetes. Dealing with insurance for payment of any serious disease in the US is horrendous. The companies are trying their hardest to rip you off as much as possible and make you take the financial burden that they should be covering.

Having help with that is invaluable. Twice I've fought with insurers about 30,000 dollar or more bills and in the end I've felt like I still had to pay more then I probably should have.

I imagine cancer is often worse. About 1.5 million people are diagnosed with cancer each year. If the LAF were able to save 10% of those people 250 dollars on their medical bills due to helping them with their insurance companies... that's 37.5 million dollars worth of value.

As for the chalk... again, I wasn't at the Tour and I can't find any articles about it. I can't find any pictures of the van. I can't find any pictures of boxes of chalk. All I can say is it doesn't fit their normal modus operendi.

The activities you list are worthwhile and valuable - you'd think something good comes out of spending $35M / year. But can you explain how contributing $500,000 to Hurricane Katrina victims helps cancer patients? What does Haiti earthquake and cancer survivorship have in common? Another $250,000 of the donors' money spent there - a pledge made this Janruary by Lance Armstrong on behalf of LAF.

LAF is a clever way to maintain the image of its founder as a cancer survivor and a doer of good. This makes him more marketable to his personal sponsors, which are reported to bring him $15M a year - not to be shared back with LAF. If Lance can accomplish this image boost with donors' money, should we call him a smart businessman, or a shameless manipulator?

 

[kurtinsc]

*or are their estates are trading on their dead images?

THis... or suing the charity when they aren't getting their cut.

 

[kurtinsc]

The activities you list are worthwhile and valuable - you'd think something good comes out of spending $35M / year. But can you explain how contributing $500,000 to Hurricane Katrina victims helps cancer patients? What does Haiti earthquake and cancer survivorship have in common? Another $250,000 of the donors' money spent there - a pledge made this Janruary by Lance Armstrong on behalf of LAF.

LAF is a clever way to maintain the image of its founder as a cancer survivor and a doer of good. This makes him more marketable to his personal sponsors, which are reported to bring him $15M a year - not to be shared back with LAF. If Lance can accomplish this image boost with donors' money, should we call him a smart businessman, or a shameless manipulator?

No, I think the Haiti and Katrina donations were stupid.

Again... the LAF is not the best charity in the world. But neither is it some hot bed of evil like some of you seem to think it is. And many of you bash it having very little idea of what they actually do.

I think it's fine to dislike how they license the "livestrong" brand to raise funds. You can dislike how lance often "tags along" with that to make his own endorsement earnings. You can dislike how the Lance Armstrong Foundation has a tendency to mention Lance Armstrong. You can argue that charitable donations should go to another charity instead.

But the claims of Lance directly skimming off the top, or that somehow Demand Media is tricking people into paying them rather then donating to the LAF or that there's some sort of conspiracy running through the charity are just stupid.

I tend to get drawn in when people start throwing that kind of garbage out there... similar to when people attack Barrack Obama for not being a US citizen rather then attacking his policies.

Attack Lance all you want. Attack the LAF all you want. But please don't make stuff up to support your argument. The LAF is a charity that is very average in their efficiency that fills a niche that few if any other charities are active in (cancer survivor support). They aren't trying to trick people. They aren't solely in existence to enrich Lance. They're just trying to get as much money as they can toward programs that support their mission.

I'm sure they could do a better job. But this whole "sinister uniballer plot" vibe going around is getting old.

 

[AnythingButKestrel]

I can almost guarantee that if you took a poll of the general public and asked if Livestrong.com was for-profit, or was a charity organization, that most would guess it's a charity. The fact that it's not is unlikely to be reported - the era of investigative reporting has long ended, leaving the only watchdog as the internet at large. In the absence of full disclosure, this kind of hypothesizing is about as good as its going to get.

What do I mean about full disclosure? Well, a breakdown of the "Programs" line item would be a great start. And frankly the suspicions regarding the finances are fully justified in light of the fact that LAF/LS spend more on office equipment than grants to "fight" cancer. That's not merely inefficient or inept; that's utterly cynical.

Then there's the investments: there's a thread for a forensic accountant and a securities expert to give a healthy yank on. So they take their principal and invest it so that it returns funds in perpetuity... Great! But who's being invested in? Who's receiving the commissions and transaction fees?

I think LS is already a radical evangelical movement. There is no questioning. Only a charismatic leader and the suspension of disbelief.

 

[kurtinsc]

I can almost guarantee that if you took a poll of the general public and asked if Livestrong.com was for-profit, or was a charity organization, that most would guess it's a charity. The fact that it's not is unlikely to be reported - the era of investigative reporting has long ended, leaving the only watchdog as the internet at large. In the absence of full disclosure, this kind of hypothesizing is about as good as its going to get.

What do I mean about full disclosure? Well, a breakdown of the "Programs" line item would be a great start. And frankly the suspicions regarding the finances are fully justified in light of the fact that LAF/LS spend more on office equipment than grants to "fight" cancer. That's not merely inefficient or inept; that's utterly cynical.

Then there's the investments: there's a thread for a forensic accountant and a securities expert to give a healthy yank on. So they take their principal and invest it so that it returns funds in perpetuity... Great! But who's being invested in? Who's receiving the commissions and transaction fees?

I think LS is already a radical evangelical movement. There is no questioning. Only a charismatic leader and the suspension of disbelief.

I wonder what they think of it as a charity then as the livestrong.com website is filled with stress relief tips, exercise programs and calorie counting apps.

But hey... continue with your conspiracy theories.

By the way... Obama is actually a Kenyan atheist/muslim who worships under a reverse racist pastor, Elvis is alive and operating a potato farm in southern Idaho and AIDS was created by the CIA to commit genocide on gay people.

 

[AnythingButKestrel]

Hey mods! How about an edit and a lock? I'd say the purpose of the thread has been long served. Thx!

 

[bianchigirl]

Agreed Anything but Kestrel, witness the cancer patients lining up outside the team bus at the TdF to touch St Lance - can a fully certified miracle cure be far behind?

 

[I Watch Cycling In July]

THis... or suing the charity when they aren't getting their cut.

Meh, the whole celebrity thing is repellent.

 

[Tubeless]

No, I think the Haiti and Katrina donations were stupid.

Again... the LAF is not the best charity in the world. But neither is it some hot bed of evil like some of you seem to think it is. And many of you bash it having very little idea of what they actually do.

I think it's fine to dislike how they license the "livestrong" brand to raise funds. You can dislike how lance often "tags along" with that to make his own endorsement earnings. You can dislike how the Lance Armstrong Foundation has a tendency to mention Lance Armstrong. You can argue that charitable donations should go to another charity instead.

But the claims of Lance directly skimming off the top, or that somehow Demand Media is tricking people into paying them rather then donating to the LAF or that there's some sort of conspiracy running through the charity are just stupid.

I tend to get drawn in when people start throwing that kind of garbage out there... similar to when people attack Barrack Obama for not being a US citizen rather then attacking his policies.

Attack Lance all you want. Attack the LAF all you want. But please don't make stuff up to support your argument. The LAF is a charity that is very average in their efficiency that fills a niche that few if any other charities are active in (cancer survivor support). They aren't trying to trick people. They aren't solely in existence to enrich Lance. They're just trying to get as much money as they can toward programs that support their mission.

I'm sure they could do a better job. But this whole "sinister uniballer plot" vibe going around is getting old.

What stuff have I made up to support my argument? I've tried to be careful and only quote stuff you can verify - and provided links to prove that. In contrast, I suspect you made up your claim above that LAF helps cancer patients when they run into disputes with their insurance companies. There's no mention of this type of service on the LAF web site - and it would be rather strange if they did try to get into the middle of a private health insurance claim. That's business for the state attorney's office.

It just so happens that Lance Armstrong is under a microscope right now for having potentially skirted with the law in some of his dealings. LAF is his non-profit charity that's openly mixed with his commercial sponsorships. It would be warranted for the FEDs to have a look whether LAF is operating under the letter and spirit of the IRS guideline that governs these 501(c)(3) type organizations.

http://www.irs.gov/charities/charitable/article/0,,id=96099,00.html

The [charitable] organization must not be organized or operated for the benefit of private interests.

The angle of a claim here is that LAF stands to promote the LIVESTRONG brand which its founder then uses to sign up commercial sponsorships for his own benefit - while allowing the advertiser to use the foundation's trademark. A separate payment is made to the foundation for licensing the trademark and another to Lance Armstrong for appearing as the spokesperson. Tell me how these two are not connected and how the spirit of the IRS rule is not breached?