Update, June 10, 2022: The growing size of St. Jude’s reserve fund prompted a charity watchdog to downgrade the nonprofit’s rating one letter grade, from B to C. CharityWatch, in a report posted on its website on Friday, explained that it issued the lower grade because St. Jude’s assets now exceed three years’ worth of operating expenses. The rating organization also said St. Jude does not meet its benchmarks for governance and transparency.
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In July 2021, St. Jude Children’s Research Hospital announced to fanfare that it had just finished raising $2 billion in donations, a single-fiscal-year record for the nation’s largest health care charity. “Solving pediatric cancer is a global problem — a multi-trillion, multi-year problem,” Rick Shadyac, chief executive of St. Jude’s fundraising arm, told the Associated Press at the time. “The way we look at it is: If not St. Jude, then who?”
Financial disclosures newly released by St. Jude, however, show $886 million of the hospital’s record $2 billion-plus in revenues last fiscal year went unspent. Those surplus dollars instead flowed to the hospital’s reserve fund, which helped it grow to $7.6 billion by the end of June 2021. That’s enough money to run St. Jude’s 77-bed hospital in Memphis at last year’s levels for the next five years without a single additional donation.
The impressive growth in fundraising raises new concerns about the amount of money that the charity has put aside for its rainy day fund.
Last year, ProPublica reported that St. Jude had accumulated billions of dollars while many families of young patients treated at the hospital struggled financially. Parents told ProPublica that they’d exhausted savings and retirement accounts and borrowed from family and friends, despite St. Jude’s much-publicized pledge to alleviate many of the costs associated with treatment “because all a family should worry about is helping their child live.” St. Jude said they provided generous benefits to families, but cannot cover all financial obligations that a family experiences during a child’s illness. In response to the story, St. Jude significantly increased its benefits for families, including more support for travel and housing.