Charity gap

AIDS committee rakes in loads of dough, but spends little serving clientele

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It’s glamorous, it’s star-studded and it’s one of the premier social events of the year in Toronto. No wonder so many people are willing to spend big bucks at Fashion Cares. But it’s a safe bet that most of the revellers at this Saturday’s (May 31) casino-themed gala haven’t got a clue just how little of their money will end up being spent on HIV/AIDS-related programs and services once the last blackjack hand has folded and the designer outfits have been put away. At least 50 per cent of the money raised at Fashion Cares goes to cover the cost of staging the event, and the rest ends up in the coffers of an AIDS organization with one of the worst spending records in the country.

Between April 1, 1999, and March 31, 2002, the AIDS Committee of Toronto (ACT), which puts on Fashion Cares, raked in $13.6 million but spent just 38 per cent of total revenues, $5.3 million, on programs and services – a little less than the organization spent on fundraising. (ACT also gave $717,030 to various AIDS charities in Toronto in the same period.) To put it another way – as a total percentage of expenditures – the organization spent only 36 per cent of all its money on charitable works in 2001-2002 according to audited financial statements and its Annual Information Returns filed with Canada Customs and Revenue Agency (CCRA).

These numbers fall short of the 60 per cent for programs and services that philanthropy experts recommend charities spend. In the U.S., however, the American Institute of Philanthropy gives top ratings to charities in the U.S. that put at least 75 per cent of revenues toward providing programs and spend no more than $25 to raise $100.

The organization could certainly improve its figures, ACT executive director Lori Lucier admits. “We agreed to make a targeted effort to do better,” she says, adding that dollars spent on administration and salaries ultimately help the cause. “I don’t think ACT has been irresponsible. We all strive to make sure that we’re returning as much (as possible) of the revenues we’re generating to our programs and services.” The publicity surrounding Fashion Cares, she says, provides ACT with invaluable exposure and prestige. “There’s no way to tangibly account for the added benefits,” she says.

But despite its high profile in Toronto, ACT ranks at the bottom of the list of 20 or so local AIDS organizations when it comes to spending cash on charitable works. In 2000-2001, Casey House Hospice managed to spend 80 per cent of its $5.2 million in revenues on programs and services, while Fife House, which earned $3.3 million, spent 89 cents of every dollar on good works. Asian Community AIDS Services spent 96 per cent on programs, and the Black Coalition for AIDS Prevention and Africans in Partnership Against AIDS spent 86 and 83 per cent respectively.

The Toronto People With AIDS Foundation, housed in the same building as ACT, spent just $552,002 – or 48 per cent – of its nearly $1.2 million in revenues on charitable works. Among major AIDS charities across the country, ACT’s record is equally dismal. According to 2000-2001 financial documents filed with the CCRA, the AIDS Committee of Ottawa, AIDS Coalition of Nova Scotia, AIDS Committee of Windsor and Centre for AIDS Services of Montreal each spent more than 80 per cent of their earnings on programs and services. The Vancouver AIDS Society put 78 per cent of its $2.2 million earnings toward charitable work.

ACT spends so little on the cause, in fact, that it violates a federal regulation requiring that at least 80 per cent of tax-receipted revenues to be spent on charitable works. During the 2000 and 2001 fiscal years, ACT used only 68 per cent of its tax-receipted income on charitable works. Lucier chalks this up to some confusion over what types of donations qualified. She says ACT no longer provides tax receipts for gifts of goods and services, so the agency will likely meet the federal requirement from now on.

No one can deny the importance of Fashion Cares as ACT’s single biggest fundraiser. The 1999, 2000 and 2001 parties raked in nearly $5 million, but a little less than half – $2.4 million – was left after the event’s production costs were deducted. To be fair, it takes money to make money, and experts concede that a special event should cost about half what it brings in.

“My goal is always 60/40,” insists Lisa J. Lander, ACT’s director of development, “but it’s usually 50/50. I’d be dancing in the streets if we did 60/40.”

Lander can probably keep her tap shoes in the closet. Sponsorship revenues this year are at about $800,000, down $100,000, she says, thanks to the loss of supporters like Smirnoff. “The economy is not good for some companies, and SARS has had an effect on us,” explains Lander.

A week before Saturday night’s event, only 85 per cent of gala tickets were sold (nearly one-third of gala tickets are given away to sponsors) and only 70 per cent of general admission tickets had been sold. Lander says historically these get snatched up at the last minute.

Not counted in the cost of producing Fashion Cares are the salaries of Lander and three other full-time ACT employees who are responsible for the agency’s annual special events (the others are the AIDS Walk and the Snap photography exhibit) and the two temporary workers brought in for Fashion Cares.

Just don’t try to ask those who are putting up the most cash to talk about what they know about ACT’s spending habits. A spokesperson for The Bay declined an interview request, and no one from title sponsor M.A.C. Cosmetics returned calls.

“People seem to confuse criticism of AIDS organizations with being uncharitable toward individuals who are affected by HIV/AIDS,” says Carl Strygg of Health Education AIDS Liaison Toronto (HEAL), a small group of AIDS dissidents who question whether HIV causes AIDS.

Strygg says ACT has long been immune to public scrutiny. “HIV and AIDS quickly became sacred-cow issues, and any organization perceived as involved is viewed with blinders on,” he explains. Indeed, ACT seems to have a cozy relationship with the city’s gay press. I recall that as a writer for fab, my colleagues and I were discouraged from criticizing the organization. A few years back, Xtra!, the political voice of the community for decades, backed off from critical coverage of ACT after the latter yanked thousands of advertising dollars from the tabloid. Both publications are sponsors of Fashion Cares and donate thousands of dollars’ worth of advertising space.

At the Canadian Centre for Philanthropy, Peter Broder is careful not to comment on specific cases, warning that it’s difficult to set a standard on what groups should spend on charity concerns versus fundraising. “Some organizations focus on short-term achievements while others are more concerned with long-term impact,” he says.

Whether focused on immediate needs or the far-flung future, HIV/AIDS organizations are big business in Canada’s biggest city. The 20 or so HIV/AIDS charities registered in Toronto (there are others in Durham, Peel and York regions) raked in more than $22.7 million in 2001, including $12.2 million from taxpayers. Not bad for a disease that affects fewer people in Canada than asthma. In Ontario, 27,241 people have been infected with HIV since the disease was first discovered, and 6,600 have died. Compare those figures to the 2,000 who die in Ontario each year from breast cancer.

So where does the money go? A lot of it goes into the pockets of the people in AIDS groups who call the shots. There are currently 42 people on the ACT payroll, including at least five managers who earn between $50,000 and $90,000 a year. “AIDS and HIV are already wildly over-funded causes,” says HEAL’s Strygg. “That is not a popular view. There are an absurd number of groups on the AIDS gravy train when one looks at the number of people directly affected by it.”

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