Form 990 for the AARS

[Guide]

Note:
We review the AARS Form 990 for 2014 thru 2020 (keep scrolling for all the years). 

"American Acne and Rosacea Society was founded by dermatologists dedicated to professional education, patient care, and research." [Home page of the AARS website]

History of the AARS - 501 (c) 6 Organization
The American Acne and Rosacea Society was initially set up as a 501 (c) 6 organization in 2005 which is exempt from some federal income taxes [1]. However, in 2013 this non profit changed to a 501 (c) 3 non profit organization. The difference between a 501 (c) 3 and a 501 (c) 6 is that the (c) 3 organization must show that it receives at least one third per cent of its donations from the public (there is a 10% rule that can be used in some cases) while the (c) 6 organization doesn’t have to prove public support and relies on private donations from individuals or businesses. The (c) 3 donation is tax deductible for the donor, while a donation to a 501 (c) 6 is NOT TAX DEDUCTIBLE for the donor which is a big difference. If you want to learn more about the difference between these two types of non profit organizations click here. *

American Acne and Rosacea Society 501 (c) 3
Since I have been reviewing the National Rosacea Society for many years now, I thought it would be proper to review how the American Acne and Rosacea Society spends its donations after switching from a 501 (c) 6 non profit to a 501 (c) 3 non profit in 2013. 

We have on this date three Form 990 files available for viewing (2012, 2013, 2014) which gives the following facts [3]:

For these three years the AARS received $1,387,552 in donations and spent $107,120 on grants to medical professionals (medical doctors mostly). That means for every dollar donated to the AARS over the past three years less than 8 cents was spent on medical research grants on acne and rosacea. During the same three years 66% ($911,132) was spent on meetings, conferences and conventions for members of the AARS who are made up of medical professionals. The Forms 990s for these three years do not reveal the percentage of donations received from the public. The Form 990 for 2012 shows the AARS checked the 501 (c) 6 box. In 2013 and 2014 the AARS checked the 501 (c) 3 box. 

The AARS spends very little, if any, on services to the general public but is chiefly concerned about spending its donated funds on its own members who are medical professionals. The AARS does not publish the awarded research grants for the general public to view for the years 2005 thru 2009.  However, it is noted that in 2017 the AARS starting publishing awarded research grant recipients' papers on its website starting in 2010 to the present. 

The general public does not receive assistance to attend their meetings, conferences or conventions which are held for the AARS members only. 

Also on Form 990 for 2013 and 2014 there is no list of contributors on Schedule B Schedule of Contributors 
Part 1 which is missing from the reports.

In 2014 the AARS spent $41,840 on medical grants to three medical doctors and Yang Yu from the UCLA Department of Medicine, Division of Dermatology [4]:

Maryam Afshar, MD
Young H. Lee, MD
Carrie C. Coughlin, MD
Yang Yu

Corporate Benefactors

The AARS has a long list of corporate benefactors who have a vested interest in selling acne and rosacea products.[5]

What do you think about the AARS?

You can make a comment about your thoughts on the AARS by posting your personal view in this thread. You should Join the RRDi to do that. 

*The more famous 501 (c) 6 organizations are the American Medical Association, the PGA Tour (over $1 Billion in Revenue), the Professional Golfers Association, and some sports organizations like the US Polo Association, , and the National Football League (the NFL was a 501 (c) 6 from 1942 through 2015 and announced that it would henceforth be a for profit organization) as well as Major League Baseball, which dropped it's long history as a non profit in 2007 [2]. Other 501 (c) 6 non profit organizations include the American Dental Association, American Petroleum Institute, Edison Electric Institute, American Beverage Association, National Association of Home Builders of the United States, Aerospace Industries Association of America, Inc., the Association of Pool and Spa Professionals, American Nurses Association, Inc., and Association of American Railroads. There are hundreds of others you can browse through. This doesn't include the numerous other non profit designations (i.e., 501 (c) 4 such as the NRA, 501 (c) 5 such as the Teamsters) and the list goes on [1]. 

End Notes

[1] There are over 29 different 501 (c) non profit classifications and several other types of non profits.
Wikipedia Source

[2] Washington Post

[3] AARS Form 990 Google Sheet

[4] AARS Research Grant Awardees

[5] Corporate Benefactors

[Guide]

Just received Form 990 from the AARS for 2015 and 2016 which you can download and view for yourself.  

Nutshell report of the revenue and expenses

2015
2015-AARS-Form-990-for-Public-Use.pdf

Total Contributions from public support (100%) in the amount of $384,338.
Total Expenses were $293,788.
At the end of the 2015 the AARS has 'unrestricted net assets' totaling $500,738.

The AARS spent most of its expenses on 'Conferences, conventions and meetings' in the amount of $204,520. The second highest expense was for 'management' in the amount of $52,250. These two expenses make up 66% of all the AARS expenses. The board of directors received zero money. 

The third highest expense the AARS reports is that $28,450 was spent on 'research grants' that are unspecified in the form which are 'awarded by contract.' So for every dollar donated to the AARS a little more than seven cents is spent on 'research grants.' 

2016

2016-AARS-Form-990-For-Public-Use.pdf

Total Contributions from public support (100%) in the amount of $225,312.
Total Expenses were $259,043.
At the end of the 2016 the AARS has 'unrestricted net assets' totaling $476,475.

The AARS spent most of its expenses on 'Conferences, conventions and meetings' in the amount of $151,502. The third highest expense was for 'management' in the amount of $48,000. These two expenses make up 88% of all the AARS expenses. The board of directors received zero money. 

The second highest expense the AARS reports is that $50,500 was spent on 'research grants' that are unspecified in the form which are 'awarded by contract.' So for every dollar donated to the AARS a little more than twenty two cents is spent on 'research grants.' 

In 2017 the AARS has now published the papers of the grant recipients on its web site. 

 

[Guide]

AARS 2017 Form 990 Review 2017-Form-990.pdf

Total Contributions from public support (99.33%) in the amount of $309,032.
Total Expenses were $440,381.
At the end of the 2017 the AARS has 'unrestricted net assets' totaling $374,176.

The AARS spent most of its expenses on 'ANNUAL AND MID-YEAR MEETINGS' for its members in the amount of $261,451. The second highest expense was for 'MENTORSHIP AND CLINICAL RESEARCH GRANTS' in the amount of $109,840. Of these grants three were for ACNE and one was for "bioinformatics analysis of acne and rosacea transcriptomes" by Rivka C. Stone, MD, PhD. One quarter of the research grant money ($26,460) was spent on 'acne and rosacea' so half of that would be $13,730*. So technically of the total donations received that was spent on rosacea research was 4.4%. That means for every dollar donated to the AARS 4 cents was spent on rosacea research, 31 cents spent on acne, 84 cents spent on 'annual and mid-year meetings', and the AARS spent more money than was received drawing on their net assets to accomplish this. The AARS still has a lot of money left in their net assets at the end of the year to draw on for 2018 expenses. 

You can view the published papers of the grant recipients on its web site to confirm that three grants were for acne and only one grant mentions rosacea. 

The board of directors received no money and there are no private contractor expenses. So while the AARS did spend more money on acne research (and little for rosacea) than last year which more than doubled 2016's research grants, the same pattern of spending the vast majority on meetings for the AARS professional members seems to be what the priority is when spending the donations of this non profit. 

*Of the four research grants, three were for acne research and only one was for 'acne and rosacea.' So half of $26,460 is $13,730 which is technically what was spent on 'rosacea' research. It only figures that acne would get primary attention since the name of the organization is 'Acne and Rosacea' and what comes first? Obviously by the way the AARS spends its money on research grants, rosacea is considered second. Of course, we have no way of knowing how the total amount ($109,840) was distributed to the recipients of the grant money since the AARS isn't saying how much each one received, so all we can do is divide by four ($26,460).

[Guide]

AARS 2018 Form 990 Review

Total Contributions from public support (99.25%) in the amount of $304,583.
Total Expenses were $207,657.
At the end of the 2016 the AARS reports 'net assets or fund balances' totaling $462,175.

The AARS spent most of the expenses on 'conferences, meetings and conventions' in the amount of $148,728 for its prestigious members who are comprised mostly of dermatologists. The next largest expense was on 'management' in the amount of $48,000. The third largest expense was on its website which amounted to $4,473.  In 2018 the AARS didn't spend any of its donations on research grants.

Schedule B, page 2 reveals the top contributors: 

Galderma $50,000
L'oreal $35,000
Cutanea Life Sciences $15,000
Ortho Dermatologics $35,000
Bayer Healthcare $20,000
Allergan USA $35,000

Total $190,000

The six skin care industry corporations above contributed 62% of the total donations. 

You can read the Form 990 yourself: 

2018_AARS Form 990 signed by JHarper 8.6.19.pdf

You can read for yourself the mission of the AARS and what they did in 2018 in the screenshot below of Form 990 Part III: 

[Guide]

Received the 2019 Form 990 from the AARS. Total revenue received $195,638 and here is the breakdown of the top contributors who donate at least $5K: 

ACLARIS THERAPEUTICS $10K
CUTANEA LIFE SCIENCES (NOW OWNED BY BIOFRONTERA) $35K
CASSIOPEA S.P.A. $10K
FOAMIX PHARMACEUTICALS $10K
GALDERMA LABORATORIES L.P. $50K
RODAN AND FIELDS, LLC $35K
THE PROACTIV COMPANY $35K

Total from 'skin industry' $185K

It would be safe to say that the vast majority of donations are from the 'skin industry.'  In addition to this, $10,450.00 revenue came from membership dues (dermatologists). 

It would be prudent to note that there is little, if any, public support donations to the AARS. This organization operates more like a 501 6 c which is a business league. 

What did the AARS spend most of the 'donations' on? $234,961 on "Conferences, conventions, and meetings."  You ask, how can the AARS spend more than it received in revenue? Answer: carry over assets. One expense worth noting is how the AARS spent $3,830.00 on its website. Here is a screen shot of all the expenses: 

The AARS did spend $40K on research grants in 2019 and you can review below who received the money: 

Your can read the form 990 yourself below: 

AARS-2019-Form990.pdf

[Guide]

Received the 2020 Form 990 from the AARS. Total revenue received $258,366. Who contributed most of the revenue? The 'skin industry.'

GALDERMA LABORATORIES L.P. $87.5K
LA ROCHE POSAY $15K
ORTHO DERMATOLOGICS $35K
SOL-GEL TECHNOLOGIES INC. $15K
SUN PHARMACEUTICALS $36K
ALMIRALL, LLC (FORMERLY AQUA PHARMA) $35K
BOTANIX PHARMACEUTICALS $5K
EPI HEALTH, LLC $5K

Total donations from the skin industry is $233.5K. The AARS was refunded one of the grants given out last year in the amount of $10K and also received $10,150 in membership dues from dermatologists.  See below: 

What did the AARS spend most of its donations on? Again, the largest amount was on 'Conferences, conventions, and meetings' in the amount of $167,836. Two other large expenses was $48K on 'management' and $12,280 on 'website expenses.' See below: 

Is this the way you think a non profit organization for rosacea should be run?  If you are a dermatologist it seems appropriate to run this non profit the way it is run. However, if you are a rosacea sufferer, is this the rosacea non profit organization you want to support?  Why should there be a rosacea non profit run by rosaceans?

You can read the Form 990 below: 

AARS-2020Form990.pdf