Thursday, September 9, 2010

Should Medical-Related Charities Increase Disclosure of Their Donors?

The Chronicle of Philanthropy raises this issue in a recent article revealing that the National Alliance on Mental Illness (NAMI) discloses quarterly on its website the names of all corporations and foundations that donated more than $5,000 to NAMI, the amount given, and how NAMI spent the contribution.  According to the Chronicle, NAMI began disclosing this information last year after Senator Charles Grassley, the ranking minority member of the Senate Finance Committee, initiated an investigation into NAMI's financial relationships with pharmaceutical companies.  NAMI's actions have given Grassley further impetus to force 33 other nonprofit medical associations to follow NAMI's lead.  In a related article, the Chronicle reports that Grassley's inquiry into these other groups represents a "broader effort by the senator and others to expose and curtail corporate influence on the medical field."  Grassley commented that "[t]hese organizations have a lot of influence over public policy, and people rely on their leadership.  There's a strong case for disclosure and the accountability that results." 

Grassley's efforts challenge the longstanding practice of charities to respect donors' rights to confidentiality.  But supporters of Grassley's viewpoint argue that he is rightfully concerned about the influence of corporate donors on the medical advice ultimately rendered by doctors, academic researchers, and organizations that receive such monies.  In December 2009, Grassley sent a letter to 33 such nonprofit associations requesting information on the amount of funds received from pharmaceutical, medical-device and insurance companies from 2006 to 2009, the identity of the donors and how their money was spent by the medical group, and additional information on the outside income earned by the groups' top executives and board members.  In his letter, Grassley referenced the decision of H. Richard Lamb, a professor emeritus of psychiatry at USC and contributing founder of NAMI, to resign from NAMI's board due to the organization's "financial dependency" on pharmaceutical support.  Dr. Lamb commented that organizations that receive money from pharmaceutical companies should "take no position on psychopharmaceutical matters."  Grassley is expected to disclose his findings from the groups' responses by early Fall.

The Chronicle acquired more than half of the solicited groups' responses to Grassley's letter, finding that such groups receive aggregately more than $100 million annually from medical-related companies via "donations, advertising revenues, exhibit fees, corporate memberships, and support for continuing medical education."  For some groups, this can represent as much as 78% of their revenue, while for others it only represents a small percentage of their total receipts.  This effort is further evidence of Grassley's commitment to increased transparency of tax-exempt nonprofits.

NAM

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