Opinion: #IceBucketChallenge, Investing Well

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.