by James T. Bennett and Thomas J. DiLorenzo
Published by Basic Books, Harper Collins, USA, 1994
Reviewed by Phil Clayton

Written by two economists this book is about "health" charities from an American perspective but applies also to New Zealand charities such as the Cancer Society.

It focuses on the big three, the American Cancer Society, American Heart Association and American Lung Association.

It covers topics such as interpreting charities' accounts. One example is that the cost of providing a service is counted as part of the service itself. "So a highly inefficient charity that spends most of its donations on salaries rather than on services can report that most of its expenditures benefit the public, when in fact the primary beneficiaries are its executives and staff". Also, fundraising costs are often hidden as "public education" expenses.

The book contains many examples of questionable spending by the health charities. "On May 15 twenty members of ACS-California's marketing communications group met in the Hilton's Roosevelt A room and enjoyed coffee, muffins, and juice in the morning; dined on the $17.95-per-person California Bistro luncheon selection; and, at three in the afternoon, enjoyed soft drinks, mineral water, and two dozen cookies - at $15 per dozen. When Mr. Ron Hagen signed the chit, it totalled $1,173.72"

Public education: after discussing the appeals of the charities and the content of their education the authors conclude, "Although health charities spend substantial sums on public education, the content of these programs leaves much to be desired. How can charities pass the hat for research programs that are desperately needed because so little is known about disease while claiming to educate the public about what the medical pros don't understand?"

Professional education: "The major health charities claim to spend millions of dollars each year offering myriad programs to keep health professionals up to date about developments in the battle against disease. If this is true, funds donated for charitable purposes are used to subsidize high-income professionals - it's Robin Hood in reverse. Clearly given the needs of the poor, the money spent for professional education should be redirected to the most vulnerable in society - the poor the charities claim to serve."

"With regard to research, health-charity involvement may hinder rather than help efforts to find the causes of and cures for disease. Health charities foster an 'in-group' mentality that discourages novel approaches to disease research… Time after time, decade after decade, promised cures, vaccines, and research breakthroughs have faded into oblivion. The health charities have raised false hopes too often. Given nearly a half-century of disappointment, the time has come for health charities to abandon their involvement with and support of research." Most of the funds for research are for "seeding" grants - to get projects started. Once they are started, the Government's National Institute's of Health pick them up and grant a huge majority of the research funding.

It also features a section on how the Big Three have actively campaigned against "look-alike" charities in order to maintain their monopoly.

The authors acknowledge the patient services that the charities provide and conclude that health charities should stay out of education and research and focus on patient services. The only concrete recommendation for those outside the charities is the imposition of "sunshine" laws where the charities would have to open their books to any member of the public requesting it. The authors come out strongly against imposing more regulatory powers as "giving regulators the ability to tell charities how they should spend their money would convert charities into little more than appendages of government.

This book is gives examples of the close-knit world of health politics and fundraising. It has a free-market, pro-competition focus, yet a very similar book could have been written from, say, a pro-Universal Basic Income perspective. After all, part of the problem with the health charities is that the free-market capitalistic ideas are being used by organisations whose aims are not to produce profits for their shareholders but to go out of business as soon as possible.