High Cost of Giving

The voluntary health and welfare agencies that rattle the cup and jangle the telephone to the accompaniment of such slogans as "Fight Cancer!" or "Stop the Killers!" were rattled themselves last week by some searching criticism. According to a study sponsored and paid for by the Rockefeller Foundation, there is a disturbingly solid basis for the doubts that come to every giver as he shells out--where does the money really go? Aren't there too many hand's out? Is this the best way to collect and spend the public's money?

The underlying facts of voluntary agencies, as the study found them, are:

P: There are more than 100,000 voluntary health and welfare outfits soliciting contributions from the general public.* They range from local committees and small national groups attacking specific diseases, such as hemophilia and cystic fibrosis. to giants like the American Red Cross. American Cancer Society and the National Foundation (polio).

P: The total take zoomed from $118 million in 1940 to $1.5 billion in 1958. One-third, it is estimated, goes for health activities, two-thirds for welfare, but the two cannot be sorted out.

P: Most agencies have sloppy or misleading accounting systems, and their accounting methods, even when good, are so diverse as to prevent comparison. It is usually difficult to tell how much money an agency spends just to raise money; some claim it is as little as 5% of the take, most say about 15%, others admit to as high as 57%.

No Neat Answers. Though responsibility for the study and its findings fell on an "Ad Hoc Citizens' Committee" of 22./- the rake work was done by Dr. Robert H. Hamlin, 38, an associate professor of public health administration at Harvard. An aggressively organized man with degrees in public health and law as well as an M.D.. Dr. Hamlin likes neat and consistent answers to straightforward questions. In this study, as he sifted the results of 500 interviews and stacks of reports collected over two years, he could find none. Even the biggest and best-known health agencies, such as the Red Cross and the heart, cancer. TB and polio groups, differ widely in their practices.

Some, he found, do not adequately report either income or expenditures of local chapters. Some allow their locals to join community-chest or united-fund drives, while others forbid it. About 100 national and regional agencies overlap with 2,200 united-fund drives that divvy up the take among 28,500 agencies.

Though Dr. Hamlin believes that "voluntary agencies provide a principal means through which private citizens may act for the betterment of their nation, their communities and their fellow men,'' he concluded that "the public as the investor in an agency has the right to know the facts. The agency as the recipient of public funds has the duty to disclose fully to those who invest in its activities . . The predominant desire of the agencies too frequently is for self-aggrandizement and self-perpetuation to the detriment of overriding public interests. It does not take over 100,000 voluntary agencies ... to provide private health and welfare services in the U.S."

Dr. Hamlin and his 22 citizen backers offer two modest but concrete proposals: 1) appointment of a national (but nongovernmental) commission to keep on studying the agencies for perhaps five years, and 2) development of uniform accounting and financial reporting. The American Institute of Certified Public Accountants stands ready to help with this, when asked.

Anguish to Anger. The reaction from some of the big agencies ranged from anguish to anger. Basil O'Connor, head of the National Foundation, roared: "The right of voluntary association has been a fundamental concept of the American way of life ever since this nation was founded . . . This basic right would now be destroyed." In more measured terms, the National Tuberculosis Association's Director Dr. James E. Perkins charged the Hamlin report with failing to distinguish between different types of agencies. Moreover, he said, the National Health Council (an association of 76 of the bigger and better agencies) has been working for years on uniform accounting principles.

Support for the report's basic ideas came from the West Coast. Said a spokesman for the United Bay Area Crusade: "Far from destroying a basic right of the people, complete financial reporting preserves that basic right." The Crusade already publishes detailed figures on income and outgo. Los Angeles had still greater reason to feel superior to the rest of the nation. By city ordinance, no agency can appeal publicly for funds without a permit; 4,200 were granted last year, and 1,500 were rejected. Every doorbell ringer who asks for a donation must present a printed card bearing a financial statement, showing just how much the agency spent for its avowed aim of helping the ill or needy and how much stayed in the office for staffing and fund raising.

Three main types of agencies conduct health and welfare activities in the U.S.: 1) governmental, from the federal to the township level, with the U.S. Department of Health, Education and Welfare the biggest spender; 2) private foundations and institutions such as universities, which carry on much basic health research in connection with their medical schools; 3 ) the voluntary agencies covered by the Hamlin report, which finance some basic research (best example: that of the National Foundation, which produced the Salk polio vaccine) among myriad other activities.

With so much splitting and overlapping of functions, the Hamlin report warned that "an increasing conflict of vested interests . . . could destroy much of the [public's] good will . . . thus unhappily leading toward government monopoly in the health and welfare fields."

*Not to mention hundreds of individual hospital-support groups, as well as 100,000 fraternal, civic and veterans' organizations, and 300,000 churches which sponsor a variety of welfare activities.

/- Headed by Lindsley F. Kimball, a longtime worker for Rockefeller philanthropies, and including nine industrialists, two educators, two financiers, two ex-Secretaries of Health, Education and Welfare, two medical administrators, one editor, one publisher, one trade unionist, one accountant.

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