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NRS Form 990 Review

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NRS Review of Form 990 for 2016 (scroll down for 2017 in the next post and 2018 in the post after that)

Every year for some time now I have been reviewing the NRS Form 990 which was recently posted on its web site (the NRS filed an extension). It is similar to the other reviews I have given in the past (more info). Very few, if any, rosacea sufferers are interested in how the NRS spends it money nor care at all. As far as I know I am the lone watchdog on the NRS. However, since the NRS was the chief reason the RRDi was formed because we thought donated funds could be better spent than how the NRS spends its donated funds giving rosacea sufferers an alternative, you may see why I continue to monitor and review the NRS spending and post my review. 

The nutshell version for 2016 is that the NRS received $748,671 in revenue and spent $712,214 in expenses. The NRS spent $65,092 on research grants. So that amounts to 8.69% of its donations. To put this in perspective, every dollar donated in to the NRS in 2016, about 8.6 cents was spent on research grants. 68% ($510,757) of the donations were spent on two private contractors, Glendale Communications Group, Inc. and Park Mailing and Fulfillment, Inc. that are owned by Sam Huff, President of the NRS. It was also reported that Sam received $106,774 (from Glendale and Park) in salary while his secretary, Mary Erhard, received $32,253 (from Glendale). These two private corporations are owned by Samuel B Huff, the Director/President of the NRS. For proof, read this post

Here is a breakdown of the Form 990: 

Form 990 Part 1 Revenue
Line 8 Contributions and grants  $697,448
Line 9 Program service revenue $  51,000
Line 10 Investment Income         $       223
Total Revenue                                $748,671
 
Expenses 
Line 13 Grants and similar amounts paid $65,092
Line 17 Other expenses                             $647,122
Total expenses                                           $712,214
 
Part VII Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
Section A
(1) Samuel B Huff, President 
Reported compensation from related organizations $106,774
(2) Mary F. Erhard, Secretary
Reported compensation from related organizations $ 32,253
 
Schedule R Part V Transactions with Related Organizations
Note 1
m Performance of services or membership or fundraising solicitations for related organization(s)
n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s)
o Sharing of paid employees with related organization(s)
Note 2
(1) Glendale Communications Group, Inc (c) $467,936
(2) Park Mailing and Fulfillment, Inc.         (c)  $ 42,821
Total Transactions                                               $510,757
 

nrs_990_2016.pdf
For a spreadsheet of all the years reviewedclick here

Form 990 for 1998

Form 990 for 2013

Form 990 for 2014

Form 990 for 2015

More Links
Funded exclusively by donations from individuals
1998 - The Banner Year for the NRS

 

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NRS Review of Form 990 for 2017

In December 2018, the NRS published its Form 990 for 2017. This year marks the fourth highest banner year in donations, the first highest banner year was in 1998 which the donations totaled over $1 million dollars ($1,148,375). In 2017, the NRS received in donations $929,730.00, just $216,645 short of its 1998 banner year. So let's review what the NRS spent its donations on. First off, let's be clear that Samuel B Huff, Director, signed off on page one of the 2017 Form 990, and on page 7, under the heading, Part VII, Compensation, it shows that Samuel B Huff, President, was paid $119,100 under the column, Reported compensation from related organizations. Also Mary F Erhard, Secretary, was paid $27,963 making a grand total here of $147,063.

Grants spent this year on rosacea totaled $74,443. So if you do the math, the total spent on rosacea research grants in 2017 amounts to 8% of the total revenue donated to the NRS. Putting this into something you can understand a little clearer, for every dollar donated to the NRS 8 cents was spent on rosacea research grants. 

What did the NRS spend the rest of the money on?  On page 10, Part IX, Expenses, it shows a list totalying $763,980.  Of that total, $105,494 was spent on Information Technology. You can read the rest yourself.  Scrolling down to Schedule R (Form 990) Part V, you will note there are two corporations listed under TRANSACTIONS WITH RELATED ORGANIZATIONS, which are the following: 

Glendale Communications Group, Inc. $498,910.

Park Mailing and Fulfillment, Inc. $70,194.00

The above two corporations is where a total of $569,104 was spent which are the related organizations the NRS used and this amounts to 61% of its total donations received. These two private corporations are owned by Samuel B Huff, the Director/President of the NRS. For proof, read this post

Read the NRS Form 990 for 2017:
nrs_990_2017.pdf

 

 

 

 

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Time to review the 2018 Form 990 the NRS publishes on their website or you can read for yourself below: 

nrs_990_2018.pdf

Review

Let's first try to concentrate on the positive aspects of this report. The NRS is the leading non profit organization for rosacea that supports research grants for rosacea. In 2018 a total of $12,500 was spent on research grants if you read Form 990, Part IX, Line 1. How can you figure out who received the $12,500?  You definitely have to do some digging since the Form 990 doesn't disclose this. The NRS website in its Awarded Grants page shows Dr. Anna Di Nardo and colleagues were awarded $25,000 in 2018. In reviewing the Form 990 it does indeed show that $25,000 was awarded to the Regents of UCSD shown below: 

regentsUCSD.png

So let's give the NRS a benefit of doubt and instead of $12,500 which is shown on Form 990, Part IX, Line 1, and commend the NRS for spending $25K for rosacea research grants. This means that the NRS spent 5.37% of its donations in 2018 on rosacea research. 

Putting into Perspective How the NRS Spends Donations

2018 donations were down from previous years with a total revenue of $465,042 (in the 21 years I have been following the NRS Form 990s, 2001 was the only year lower in donations). While acknowledging above that the NRS spent $25K for rosacea research, putting this into perspective is the fact for every dollar donated to the NRS in 2018 only a little more than a nickel (5 cents) was actually spent on rosacea research. What was the rest of the donations spent on? Answer: 

93% of the donations were spent on two private contractors that are owned by the president/director of the NRS Sam Huff. Here is a screen shot of the names of the two private contractors shown on Form 990: 

glendalepark2018.png

How do we know that Glendale Communications Group, Inc and Park Mailing and Fulfillment, Inc belong to Sam Huff?  The Illinois Secretary of State gives the proof. As you can see from the screen shot above, Form 990, Schedule R, Line 2 shows the amount sent to these two corporations which is $432,408. Is this legal? Yes, of course. You didn't know that NON profit corporations can do this? If you want an education, read this post

Here is a screen shot of Form 990, Part VII, Section A, Compensation which is interesting: 

boardincome2018.png

I didn't know that Zoe Draelos, MD who also serves on the RRDi MAC is now serving on the board of directors for the NRS. She received $2500 from the NRS in compensation. Good for her! Also Dr. Gallo who I have tried to contact to serve on the RRDi MAC to no avail also received $2500. Good for him!  Did you note how much Sam Huff receives? The RRDi would love to give Dr. Draelos $2500 but we didn't even receive half that amount in donations so all we can do is keep our website going and keep the RRDi afloat since our donations are quite meager compared to the donations given to the NRS.  

One other very interesting item on the 2018 Form 990 the NRS has released is the amount of Excessive Contributions which has never been revealed in the twenty years I have been following NRS Form 990s. See below: 

excesscontributions2018.png

 

If you note the screen shot above it says **Do Not File** ***Not Open to Public Inspection*** which if I had paid accounting fees of $26,691 to my accountant as shown on the NRS Form 990 for 2018, Part IX, Statement of Functional Expenses, Line 11, c, it would pose a question why is this made public? We have never before had any indication the amount of donations the pharmaceutical companies give to the NRS. And if you note in Form 990, Part VI, Governance, Section B, Policies, Line 11a, please note the question, "Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form?" and also note that 'yes' was checked. This is also restated in Form 990, Schedule O, where is shows the following: 

reviewedBoD2018.png

If the pharmaceutical companies discover that the NRS has disclosed its Schedule A,  IDENTIFICATION OF EXCESS CONTRIBUTIONS, what might the consequences of this be?  I find it odd in the first place that 501 c 3 non profits are not required to disclose the identification of who is donating when it is obvious they are private contributions and not pubic donations. However, you know who makes the IRS rules for non profits? Probably nothing will become of this disclosure but I find it really interesting. 

The only other interesting item I found was that the NRS reports an expense of advertising in the amount of $74,814 (Form 990, Part IX, Statement of Functional Expenses, Line 12. It also reports on Form 990, Part VIII, Statement of Revenue, Line 2a, Advertising Income in the amount of $85,000. I don't recall seeing any advertisements on the NRS website, but maybe I am missing something?  I wish I could figure out how to get advertising income for the RRDi. Does anyone know how this is done? Sure could use some help. 

For a spreadsheet of all the years reviewedclick here

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