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Counting the cost: Does the Irish Cancer Society’s hardship cut add up?

How does the Irish Cancer Society spend its money, and do its explanations make sense?

shutterstock_218458957 (1) Source: Shutterstock/Brian A Jackson

THE IRISH CANCER Society has been fiercely criticised this week for its decision to end Financial Support payments to cancer patients before partially reversing the move 24 hours later.

The scheme – known as the hardship fund – was designed to help patients and their families to manage the financial burden of their illness.

Announcing the demise of the fund on Tuesday, the Irish Cancer Society said in a statement:

We greatly regret having to close this fund but unfortunately the demand has become too big for us to manage.
Since the economic crash of 2008, demand of the Financial Support programme has grown considerably and last year, 2015, the Society gave €1.8 million to patients who were facing financial hardship.

A spokesperson for the society later told TheJournal.ie that, in fact, €1,551,775 was paid in 2015, and not €1.8 million.

The statement went on to claim that there had been a “huge growth in demand” for financial support, and that the scheme was axed “against the background of a drop in fundraised income in 2015.”

…We were forced to choose between the free and unique services which we provide to patients, and the Financial Support fund, demand for which was growing at a rate which could have put our free services at risk.

These include the Night Nursing service, which provided end-of-life care to almost 2,000 cancer patients in their homes, in 2014, the Volunteer Driver Service, which has provided more than 2,000 cancer patients free transport to chemotherapy treatment, since 2008.

The society also offers cancer information, support and free counselling to patients throughout the country, as well as being Ireland’s largest voluntary funder of cancer research.

This morning, the society reversed the move, and announced a partial reinstallment of the fund, for 200 children, less than 10% the number of recipients in 2015.

We deeply regret and apologise for the upset which our decision has caused and we hope that this announcement…will ease that hurt.

The society said it would work to find €200,000 in savings in order to provide the service but also said they had already saved more than €750,000 from cuts to staffing, including a “small number” of redundancies.

So what’s going on at the Irish Cancer Society? How does it spend money? And is the growth in demand for the hardship fund really unmanageable?

We’ve looked through the society’s financial reports since 2009, acquired new information, crunched the numbers, and found some revealing facts.

How much does the hardship fund actually cost?

shutterstock_247672351 Source: Shutterstock/mangosoda

Figures provided to TheJournal.ie by the society show the extent of payments over the last three years:

  • In 2015 – 2,714 recipients got €1,551,775, an average of €571.77 each.
  • In 2014 – 2,369 recipients got €1,526,633, an average of €562.39 each.
  • In 2013 – 1,835 recipients got €1,182,144, an average of €644.22 each.

Since 2009, the Irish Cancer Society has spent €7.97 million on financial support payments, an average of €1.14 million per year.

During the same period, total annual spending has ranged from €15.3 million to €21.5 million, with the hardship fund constituting an average of 5.7% of that each year.

To put those figures in context, in 2014 the society spent €7.4 million on employee pay and benefits (not including Night Nurses), €3 million on research grants, and €3.9 million on the cost of fundraising (organising campaigns and events).

icsproportionate

Spending money to make money?

The cost of fundraising has emerged as a significant concern over the last 24 hours.

The Irish Cancer Society has, since 2009, spent €24.88 million on fundraising, which garnered a total of €89.56 million.

Its most profitable year was also its most expensive. In 2014, the organisation spent €5.15 million on fundraising, and brought in €16.48 million.

Interestingly, however, it was also the least efficient.

The more the Irish Cancer Society spends on fundraising, it would appear, the lower its return on investment, as the chart below demonstrates.

fundraising

In response to a query from TheJournal.ie, a spokesperson defended the society’s fundraising practices:

We regularly benchmark our fundraising costs and we compare well with charities which also have to fundraise the majority of their income.
We need to generate support for our fundraising campaigns which fund our free, vital cancer services.
We are always reviewing the ways in which we fundraise to ensure it is cost effective and efficient, however the fundraising climate is increasingly competitive. We are also examining certain campaigns which have seen a decrease in income.

A ‘drop in fundraised income’

shutterstock_120460033-2-390x285

The two main explanations offered by the Irish Cancer Society for its initial decision to axe the hardship fund were a “drop in fundraised income” last year, and a “huge growth in demand.”

In 2014, the organisation took in €18,978,000 from donations and fundraising activities, according to its annual report.

Figures provided to TheJournal.ie show that the society’s provisional fundraising and donation income for 2015 was €18.6 million – a drop of €378,000 or two percent.

This decrease is obviously unwelcome, but certainly not unprecedented for the Irish Cancer Society.

In 2013, for example, fundraising and donation income was €18,730,000 – a drop of €889,000, or 4.7% from the year before.

But despite this significant decrease in income, hardship fund payments were vastly increased the following year, 2014 – from €1.18 million to €1.53 million, a 29% jump.

In short, the last time the Irish Cancer Society experienced a “drop in fundraised income,” the drop was more than twice as large, but rather than being cancelled or even diminished, the hardship fund received its biggest boost in the last seven years.

TheJournal.ie asked for provisional figures on other areas of spending in 2015 (salaries, research, support costs, fundraising costs).

A spokesperson said these accounts were still being finalised, but in keeping with the Irish Cancer Society’s “policy of being fully transparent,” will be published as soon as they are available.

‘A huge growth in demand’?

The second explanation offered for yesterday’s announcement was a “huge growth in demand” that the society said it was simply unable to manage.

Figures provided to TheJournal.ie show that from 2009 to 2015, demand for financial support was indeed at its highest last year, when 2,747 people applied, and all but 33 were given funding.

However, the figures also show that the rate of growth in demand actually slowed last year, from 28% in 2013/2014 to 14% in 2014/2015, as this chart shows.

hardshipfundtrends

Although the increase in demand last year was significant, it was far from unprecedented, and could not necessarily be expected to continue.

In 2011, for example, there was a 22% jump in applications for the hardship fund, but that was followed by a 10% decline the following year.

In 2010, there were 300 more applications than the previous year, and yet the acceptance rate also rose. Likewise 2014, when the acceptance rate increased, despite a jump of 525 in applications.

What are the prospects for the hardship fund in 2016?

The society has said that €200,000 will be required to provide assistance to the families of 200 children with cancer.

They are appealing to the public for help in meeting this figure, but have also suggested they will be considering pay cuts and other staffing solutions.

In a statement to TheJournal.ie, a spokesperson confirmed “there will be no salary increases in 2016,” and that they had already found €750,000 in savings.

The Society has already put a number of staffing strategies in place including redeployment, not replacing staff on maternity leave and a number of redundancies.

TheJournal.ie attempted to clarify whether that €750,000 had been used to pay for services last year, or was available for 2016.

The spokesperson would only say:

The current financial decisions we have made are reflected in our current position.

To examine the Irish Cancer Society’s financial reports, click here.

Read: Irish Cancer Society reverses controversial decision to cut hardship fund for children>

Read: Angry parents take to Liveline after Irish Cancer Society cuts off hardship fund>

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