A key congressional spending panel has fired a shot across the bow of two federally chartered medical foundations, warning that the way they disclose information about donors may not pass muster. It’s the latest controversy involving the traditionally low-profile foundations, which over the past quarter-century have funneled nearly $2 billion to the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC) for research, clinical trials, training, and educational programs.
Congress created the Foundation for the National Institutes of Health (FNIH) and the CDC Foundation in the early 1990s to raise private funds to support federal biomedical and health research. It hoped to encourage transparency and prevent potential conflicts of interest by specifying in the law that the foundations had to report “the source and amount of all gifts” they receive, as well as any restrictions on how the donations could be used. But last week, legislators on the House of Representatives appropriations subcommittee that oversees NIH and CDC expressed concern that the foundations may not be following those disclosure rules, which are spelled out in the Public Health Service Act (PHSA). (The FNIH provision is here, the CDC Foundation provision is here.)
A report accompanying a 2019 spending bill moving through Congress reminds the foundations to abide by the PHSA when writing their annual reports (here and here). The lawmakers also say it’s not OK to hide the identity of donors who have attached strings to their gift by labeling them as “anonymous.”
The language “is a marker that we want more transparency,” says one House appropriations staffer, speaking on background because of committee rules on who can speak to the press. “We’d like to see [the foundations] go further, and this language is meant to start a conversation.”
The foundations, located near the agencies they serve in Rockville, Maryland, and Atlanta, respectively, appeared on the committee’s radar this spring as a result of media coverage of projects partly funded by industry gifts that went awry. Last month, NIH Director Francis Collins canceled a $100-million study on the effects of moderate alcohol drinking that was largely funded by the spirits industry after an investigation found NIH staff had improperly solicited industry directly and shaped the study to satisfy industry interests. In April, Collins also killed a plan to partner with pharmaceutical companies on a $400 million study of opioid dependency, after an outside panel warned of potential conflicts. The CDC Foundation has come under fire in recent years for how it has handled corporate donations, and as a result has severed connections with some donors.
Officials at both foundations insist they are following the spirit and letter of their founding legislation. “We have the responsibility … to do these partnerships that support the NIH mission to advance public health, and we do that,” says David Wholley, FNIH’s senior vice president of research partnerships. “And we have always complied with the law.”
CDC Foundation officials declined to be interviewed, but in response to emailed questions from Science, they asserted that their public reports contain the information required under the law.
It’s not hard to see why legislators might think the foundations aren’t being sufficiently transparent. For example, both list anonymous donors without specifying the size of their gifts. Their annual reports also group donors by the approximate size of their donation—without listing the exact amounts.
As a result, those “buckets” can be misleading. In 2016, for example, FNIH listed eight donors who each gave more than $2.5 million, its top category. But a separate report FNIH filed with the Internal Revenue Service reveals that one of those donors gave $19.1 million. (The filing does not name the donor, but FNIH told Science it was the Bill & Melinda Gates Foundation in Seattle, Washington.)
Julie Wolf-Rodda, the head of FNIH’s development office, says there’s nothing untoward or unusual about listing some donors as anonymous and grouping their gifts by approximate size. “The lion’s share of anonymous gifts are from a relative of someone who was treated at the NIH Clinical Center and wants to make a memorial gift and doesn’t want their name listed in the annual report,” Wolf-Rodda said. “We’ve assumed that Congress was comfortable with us doing that, just as every other nonprofit does.”
FNIH does not accept contributions from the tobacco industry, Wholley says, and it has adequate procedures in place to screen potential donations that raise red flags. “We know who [donors] are, and we’re not taking their money if it’s from a source that’s a problem,” he says.
The House report also highlights legislators’ concern about how the foundations report on any gift that comes with strings attached. FNIH negotiates with each donor what Wolf-Rodda calls “an exhaustive letter of agreement” governing the use of each gift. “We seek [donations] for a specific purpose, and the money is restricted to that purpose,” she says.
FNIH’s annual report, however, makes no mention of donor directives, although it might mention a donor’s “essential role” in a specific research initiative. The CDC Foundation’s annual report is a bit more descriptive, listing “funding partners” for specific programs. Foundation officials say it is standard practice among charitable foundations not to link gifts to specific projects in their annual report, and the move is not intended to reduce transparency.
Wholley says the information is there if you know where to look. But he acknowledges that it would require some digging. “For many of the larger programs you can actually figure this out by going to the FNIH website,” he explains. “For example, for the AMP [Accelerating Medicines Partnership] Type 2 diabetes project, you can see that there were these five companies that donated to AMP. And one of the rules of AMP is equity, so all the companies donate the same amount. So, if it’s $40 million over 5 years, you can divide that by the number of years, and the number of companies, and see how much each one is giving every year.”
He also has a ready answer to those who might wonder why the foundation doesn’t make such specific information readily available. “We have responded to every reasonable request for information,” he says. “But nobody has ever asked us to do that.”
U.S. foundations are obliged to respect donor wishes for anonymity, and don’t typically publicize gift restrictions, says Art Taylor, the CEO of the Wise Giving Alliance for the Better Business Bureau in Arlington, Virginia. But Taylor says when donations eventually lead to a study or report that is publicly available, failing to disclose the donor’s name and amount could raise questions about the nature of the relationship between the donor and the foundation. In particular, he says, listing a donation in a category without a ceiling (such as $5 million or more) “means they are not doing a good job of communicating with the public.”
The House report language is partly the result of lobbying by the exercise company CrossFit, Inc. Its founder and chairman, Greg Glassman, became concerned several years ago about allegations that The Coca-Cola Company and other soft drink makers had used donations to the CDC Foundation to influence the charity’s work. This past spring, after company staff “looked at [the CDC Foundation’s] disclosures and found they weren’t even close to following the law,” they brought their concerns to appropriations committee staff, says Russ Greene, CrossFit’s director of government relations in Washington, D.C.
Wholley notes that legislators have, so far, expressed their concerns in report language, which is not legally binding. But he says FNIH would obey a directive from Congress to revise its accounting practices.
“This is not language in the appropriations bill, so we have no comment on it,” he says. “And if and when Congress puts language into the appropriations bill that directs FNIIH to do something, FNIH will do it, as we have for 25 years, without exception.”