Opinion: #IceBucketChallenge, Investing Well

Hundreds of thousands participated in the ALS campaign that went viral, but how are they supposed to decide where to donate?

By | September 10, 2014

James Heywood (right) and his nephew Alex pour cold water over Heywood parents John and Peggy as part of the ALS Ice Bucket Challenge. Alex’s father, Stephen Heywood, passed away from ALS in 2006.PHOTO BY BEN HEYWOODI am amazed and grateful that the #IceBucketChallenge has brought so much attention and new funding to amyotrophic lateral sclerosis (ALS), the disease that took my brother Stephen in 2006. Ignited by patients, viral in nature, and independent of any organization, the campaign is like nothing the ALS community has ever seen.

The influx of cash and attention is a blessing, but the challenge also raises anew questions about donor intent and responsibility. It also puts ALS organizations—in particular the ALS Association (ALSA), which has received the vast majority of recent donations—in the spotlight, as they face the responsibility of deciding how to invest these new funds to serve the patient community.

Ideally, before giving money donors would evaluate the effectiveness of each organization in terms of how its funds are used to serve patients. Sadly few resources exist to inform donors. Charity Navigator, an organization that does attempt to address this evaluation gap, provides a four-star evaluation of financial efficiency based on a series of transparency and independence measures. Almost all of the major ALS organizations, including the ALS Therapy Development Institute (ALS TDI), which I founded in 1999, have four-star ratings, which doesn’t help potential donors distinguish among them. More importantly, this measure of financial efficiency does not get at the real question: Which organizations create the most value for patients with your donation? 

From my years investing in the ALS field myself and my ongoing experience advising donors across multiple diseases, I have learned that there are no simple ways to answer that question. Months of research into how organizations set goals and measure their performance is the only way to get a true insight into the effectiveness of a nonprofit. Is it any surprise that new contributors, despite their best intentions, often have no way of knowing how their donations will be spent—or if the money will make a difference in the lives of ALS patients?

These are complex issues. To break them down, one needs to evaluate the different mission components of a disease nonprofit by looking at three primary categories: service to patients, advocacy and education, and research.

If an organization’s goal is to serve patients directly, then the questions to ask are: How effectively does it provide services like wheelchairs, education, care, transport, and so on? Does the organization have internal efficiency metrics such as number of patients seen, services provided, and cost per unit? Is there a noticeable impact on the patients they aim to serve?

Regarding advocacy and education, valid goals could include policy changes with regard to discrimination, disability coverage, increased research funding, and improved health-care delivery. Few organizations have or provide the answers to these questions, but such information could be of great help to potential donors and would improve accountability.

Research is a very complex and high-risk endeavor that is even more difficult to assess than patient services and advocacy. Even on the for-profit side, very few investors have a track record of long-term success—not surprising, given the complexity of moving an idea from early-stage research through to approval.

Disease nonprofits are generally largely “reactive” in nature. Their goal is to give grants that support research into the disease, and they manage advisory boards of disease experts who invite and review proposals from researchers, much like the peer-review system works at the National Institutes of Health (NIH) and other funding institutions. “Proactive” approaches are much rarer. Such a strategy typically involves thinking about curing a disease as a process, exploring the data to inform that process, developing tools and resources to fill development gaps, and engaging pharma and biotech. High-level industry experts who think about discovery and development as a process are critical to the successful implementation of proactive strategies.

I would argue that, as research rapidly evolves from traditional investigator-driven hypotheses to scaled systems discovery, proactive approaches are dramatically more efficient than reactive ones. By seeking out and identifying disease-independent technologies and partnerships, designing, contracting, and managing large-scale experiments, and integrating data and analysis from multiple experiments and labs, such proactive organizations can create a fertile ecosystem that draws in industry and investors.

In ALS, I think this strategy is now working to bring industry resources to the orphan disease and accelerate the validation of new targets, biomarkers, disease measures, and treatments. Biogen, for example, and a number of other startups now have strong ALS-focused research programs. ALS TDI endeavors to provide companies with critical tools and data to help accelerate their work on ALS, while continuing to proactively address key research and information gaps. 

There are areas that need more work. Patients are still not sufficiently involved in the developing the research agenda, for example, and the ALS field needs improved data sharing. Biomarker development and a better understanding of disease progression are also areas that need significantly more leadership and research. The Ice Bucket Challenge raised knowledge, awareness, money, and hope, but there is still a long road for ALS patients, who are still living with a deadly disease for which there is still essentially no treatment.

In the end, it is the intense pressure from patients that keeps the system honest. Patients and experts, however, need better tools to share their experiences and evaluations of how well organizations serve them. My voice, as an expert and as a brother affected by ALS, should be one among the many. We can and should do better so that donors to the #IceBucketChallege now and in the future will have the guidance they need to invest well.

James Heywood, an MIT-trained engineer, is cofounder and chairman of PatientsLikeMe, a real-time research platform and social network where patients can share information and participate in research. In 1999, he founded the ALS Therapy Development Institute (ALS TDI), which he directed for nine years. He serves as an active investment and scientific advisor to many biotechnology companies and nonprofit donors.  In 2012, he cofounded and serves as chairman of AOBiome, a skin bacterial biotherapeutics company.

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Avatar of: moi moi

moi moi

Posts: 1

September 10, 2014

Unfortunately, ALS Association continues to play around with the words when it comes to "ALS Association" - who is this?  what size is the ALS Association?  When Charity Navigator provided a 4 star rating to the ALS Association - how many realize it is specific to ALS Association National Office and does not incorporate the additional 38 chapters in the 4 star raiting.  Yet, ALS Association tends to give an impression that it's all inclusive by failing to stipulate that the 4 star rating they are referencing is ALSA National officce.  Only 8 of 38 chapters are rated by Charity Navigator and definitely not all of the 8 are 4 star rated.  

Likewise, when ALS Association provides data it is done so with obscureness.  Exactly what is the overall revenue of the ALS Association organization wide and how much money organizaton wide is funding research?  Interesting that their FYE2013 and prior included a consolidated/combined revenue/expense view.  However, the annual report FYE2014 being strategically shared no longer contains the consolidated view.   Does it matter that their FYE 2013 $64million dollars was the consoldated revenue of ALS Association National and 38 Chapters and ONLY $6.6 million went to research?  YES, it really matters.  Do the numbers look better if it's reported as only ALSA National Revenue of $25.7 million and $6.6 million went to Research?  Of course, it looks better.  So what is the reality?  If the $6.6 million going to Research is funded by chapters and ALSA National - then they consolidated $64 million should be reported.  The general public, donors, potential donors, and most certainly the ALS community have a right to know what the revenue and expenses are across the entire organization.  Not a snapshot view.   ALSA has chosen to play word games and not be transparent to the core.  Yes, they've started to stick the words "National Office" into some of the information since the Ice Bucket Challenge and criticism has arisen, but they have a LONG way to go to be transparent.  

They create a facade about equipment.  Yes, they provide 'donated' equpment to patients.  Equipment donated by patients/families who no longer have need. Because of the typical rate of ALS progression, such equipment has some longevity to it before it lapses into the end of it's own Life Cycle.  Wouldn't it be nice to consistenly read that the ALS Association makes used equipment available through the generosity of the ALS community donors?

It has all the appearance of a shell game, smoke and mirrors.  A revolving door of "customers" who have a short window of being "repeat customers' before the door closes and the vicous cycle starts all over with yet new "customers'.  

To read that the ALS Association now wants to invest the Ice Bucket Challenge donors money is right up there with ALS Association making an effort to trademark the IBC.  Ambulance chaser, vulchers!  

The ALS Community needs RESEARCH NOW.  Not waiting on when the market determines what is a good time to pull some money out.  ALS Association continues to gamble with the lives of those afflicted with ALS.

 

Avatar of: Old stick

Old stick

Posts: 5

September 10, 2014

I recently posted a comment to a similar article on this site regarding investing the funding received from the hugely successful ice bucket challenge. That was here: http://www.the-scientist.com/?articles.view/articleNo/40925/title/-IceBucketChallenge-Highlights-Difficult-Funding-Decisions/#post106390

 

Avatar of: T S Raman

T S Raman

Posts: 50

September 10, 2014

Let's have a Kick the Bucket Challenge. (I won't participate.)

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