Charity Runners or "The Purple Horde"

This is an issue that has become a sensitive one in a lot of running circles. Team in Training (TnT) has made a significant impact, not only on the budget of the Leukemia & Lymphoma Society of America, but on countless marathons around the world. A number of large destination races have more than 25% of all their participants running for charities.

Boon or Bane?

This large influx of predominantly new and inexperienced runners has caused some major disruptions at large events. Many long time runners complain that marathons are filling up too quickly because so many slots are reserved for charities that don't have to place specific runners with specific numbers until long after the normal entry deadlines. Others complain that the charity runners are contributing to the rising costs of entry fees, partly as a result of keeping courses open for 5, 6, 7, and even 8 hours to accommodate these slower "runners". Then there are the runners that simply complain that many of these runners may never have entered a road race before and that 5000 inexperienced racers just plain get in the way and gum up the works.

Obviously there are defenders of these programs that point out that the charities are bringing people and money into the sport to keep it alive and help support it. Today's charity runner may be tomorrow's local running club secretary or race director. Not to mention all of the good that is being done with the money that is raised. Some of the charity programs have taken the criticism to heart and are trying to do a better job at educating their running on basic "race etiquette".

Honesty in Fundraising

I don't mean to deal with the argument of whether the charities are doing running, or the runners, a favor by encouraging a 0 to 26.2 in 4 months kind of mentality. I do want to deal with the issue of the money and fundraising since this has become a pet peeve of mine over the last few years.

What prompted me to write this originally as a post to the Dead Runner's Society was that I received another "Team in Training" (TnT) solicitation the other day from yet another patient. In her very nice letter (using the fundraising letter writing tips suggested by TnT) she stated that "76% of your donation goes directly to research". Since I had looked at this issue in the past, I knew this to be an incorrect statement and felt I should once again review the public information and see how much each dollar donated to a TnT participant goes to the programs and services of Leukemia & Lymphoma Society of America. (LLS)

I don't have any problem with LLS as an organization. They are a solid charity that provides good services and research. They have a reasonable overhead in the process. What I do have a problem with are two things related to the way the raise and solicit funds.

The first is the issue raised by my patient's request for money. She stated that "76% of your donation goes directly to research". This isn't even close to being true. The second issue is that not one of the TnT runners that has approached me for a contribution has ever bothered to mention the fact that if they raise enough money, they get their way paid to this destination marathon, air fare, hotel, training, and race registration. I think the first is a mistake based on ignorance, the second is an intentional deception.

I'll look at the issue of the amount of money that actually goes to research first.

Show me the money

This time around, the information was easier to come by. All of the information referenced here can be found on the LLS website in their annual reports and federal 990 filings.

The figures for how LLS spent the money it received in FY 2001 is as follows:

Program Services (The reason LLS exists)
Research 25.2%
Patient and community services 27.0%
Public Health Education 18.4%
Professional Education 4.7%
Total 75.3%

Supporting Services (What it costs to get the above done, or "overhead")
Management 6.8%
Fundraising 17.9%
Total 24.7%

These numbers have been relatively consistent since FY 1999. It is the program services figure that my patient was mistakenly using when she made the statement "76% of your donation goes directly to research". That is an understandable error. Only a third of the money spent for program services goes to research, but the rest does go for valuable things that furthers LLS's mission.

Direct Donor Cost or "runner's perquisites"

How much of a TnT donation actually goes to Program Services is a lot more important and something that even long time TnT runners don't seem to have a clue about. It is also a lot harder to find the answers but they are there in the consolidated 990 forms that every charity is required to file with the IRS. Part 1, Line 9 of the 990 form lists the income from special events (such as a TnT event) and the associated direct cost of putting on the event.

An example: Let's say that you attend a $100 a plate dinner as a fund raiser for LLS. The charity has to hire a caterer to prepare the dinner, serve it, provide the center piece for the table, pay the keynote speaker etc... These are all costs that are directly benefiting you, the donor. These costs are reported as direct donor costs. They are different than the costs of sending out bulk mailings appealing for donations, or television advertising, because these costs are directly related to the event you are attending. When the function is over, what is reported as donation income to the organization is the $100 you gave less the costs of providing you with the dinner. You may have paid $100, but only $75 makes it to the charity.

The same holds true for a TnT runner. TnT pays for the purple t-shirt, the coaches, the airfare, hotel, race entry fee, etc... These are costs that are directly incurred for the benefit of the runner to get them to actually raise the money and run 26.2 miles. As you may know, TnT requires a minimum amount of money be raised for a runner to be able to go to the race of their choice. This amount varies with the marathon. It is much higher for destination races. Back in 2000, the California TnT Chapter website stated that the minimums required were calculated so that the the runner expenses were no more than 25% of the minimum amount raised. If the expenses for a marathon were to be $800 then the minimum fundraising required of the runner would be $3200.

Back to the 990

Let's look at the 2001 LLS financial numbers. LLS breaks down the events for Part 1, Line 9 on an attached note. They list the three largest events for the year. As you might suspect, these were all TnT marathons; Rock 'n' Roll (San Diego I believe), Disney Marathon, and Honolulu Marathon. Here are the totals for the three combined.

Gross Receipts: $23,724,300
Direct Expenses: $6,041,800
Contributions: $17,682,500

As you can see, from these three TnT marathons, folks gave over 23 million dollars in donations. The expenses for training, travel, hotel, registration, t-shirts etc... for these three events was just over 6 million. 25.4% of the amount raised by the TnT runners went to essentially their own support! Less than 75% of the money raised by TnT actually made it to the LLS.

LLS had another 678 events in FY 2001, 81 of then were TnT events. The actual numbers for these other events aren't listed however the totals for all of them are. Only 4.7% of the revenue from all the other 678 events were used for direct donor benefits. Compare that to the over 25% for TnT marathons and you can see that while a TnT event does raise a lot of money, it is hardly an efficient way to do it.

Look at it another way. For every dollar a person donates for a TnT runner, it breaks down like this.

Runner Benefits 25.4%
Research 18.8%
Patient and community services 20.1%
Public Health Education 13.7%
Professional Education 3.5%
LLS Management 5.1%
Fundraising 13.3%

Or to put it yet another way, for every dollar donated to TnT only 56 cents goes to program services.

The situation was similar last year. In 2001, the direct donor costs were 25.0%.

Fine, but does it matter?

It obviously does matter to me or I wouldn't have wasted so much time digging through numbers. I don't like getting solicitations that are not honest. I was told that if I contributed money for this TnT runner that "76% of your donation goes directly to research". I can forgive the mistake on the part of an eager, but misinformed TnT runner since they got the incorrect information from TnT.

Secondly, nowhere in the solicitation did she explain that if she raises enough she gets her expenses for the marathon paid for out of the donations that she receives. In essence, the TnT runner is asking others to pay her way to the marathon. I don't know about you, but I would like to go run the Honolulu marathon myself. I'm just not willing to ask others to pay my way in the name of charity.

Am I wrong?

I'm not an accountant. I'm an optometric physician and a runner. I take "ethics" seriously both in my professional and personal life. Whenever this comes up, and I both express my views and back them up with the numbers, plenty of folks get upset. I always ask for anyone that can dispute the numbers to please give me the correct information. Instead, I've gotten earnest assurances from TnT runners and volunteers that they were told that 75% of the money that they raise goes to program services. Fine, show me the numbers.

Ethical Fundraising

TnT does raise a lot of money for a good cause. At the very least, TnT runners should do their fundraising in an ethical manner and fully disclose to their prospective donors that 25% of the amount given goes to directly benefit the runner, and not LLS. Even better, in my opinion TnT runners should go one step further and personally donate 25% of the minimum required donation. This would ensure that they are covering their own expenses and not skimming benefits for themselves.

Occasionally I'll hear from upset TnT folks that claim to disclose this information in their fundraising letters. I have yet to see a TnT fundraising letter than does. Here are some examples of fundraising letters. See for yourself if you think these are honest/accurate.


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David S. Hays, O.D.,dhays@davidhays.net