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Jim Kenyon: Trust at Stake at DHMC

  • Valley News columnist Jim Kenyon in West Lebanon, N.H., on September 15, 2016. (Valley News - Geoff Hansen) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Geoff Hansen

Published: 2/8/2017 12:08:24 AM
Modified: 2/8/2017 10:52:24 AM

After Lisa Mabey had surgery to remove a malignant brain tumor, the Norris Cotton Cancer Center sent a massage therapist to her home in Hanover. The sessions did wonders to help Mabey relax and reduce stress.

Unfortunately, it’s not a treatment that insurance typically covers. But it is the kind of patient service that Norris Cotton is able to provide from money it raises in the annual Prouty.

What started out in 1982 with four Norris Cotton nurses embarking on a 100-mile bicycle ride through the White Mountains to honor a favorite patient — Audrey Prouty — has turned into a fundraising juggernaut.

Last year, the Prouty raised $3.2 million, bringing its 35-year total to more than $30 million. “These dollars stay at Norris Cotton Cancer Center to fund research seeking better ways to diagnose, treat and prevent cancer,” according to the Prouty’s website. “Money raised also funds patient services to help ease the way for patients and families struggling with cancer.”

Sounds good. But is Dartmouth-Hitchcock, the cancer center’s parent organization, being totally straight?

Mark Israel, the physician who served as director of Norris Cotton for 15 years, maintains that D-H used $1.6 million of Prouty money in 2015 to cover operating costs. In other words, Proudy participants and volunteers thought they were raising money to provide Norris Coton with extras while the cancer center was using the money to balance its budget.

Israel said that he objected at the time, but to no avail. In September, Israel filed a lawsuit alleging D-H violated state laws that protect whistleblowers by forcing him from the cancer center’s top position. D-H has moved to dismiss the Grafton Superior Court case, which is still in its early stages.

I have no idea how the case will turn out. But it’s pretty clear that D-H is dealing with a potential public relations disaster. Any time there’s a hint that a nonprofit organization is using charitable dollars for purposes not advertised, the public has a right to be jittery.

D-H has gone into damage control mode. Last fall, D-H asked the New Hampshire Attorney General’s Office, through its charitable trusts unit, to review the matter. (D-H says that roughly $770,000 in Prouty funds were in question; not $1.6 million as Israel alleges.)

Last week, the state cleared D-H of any wrongdoing in the spending of Prouty funds — even though some money was used to pay “salary, equipment and occupancy costs.”

The $770,000 in Prouty money was part of a “quasi-endowment” fund that Israel had set up, states the attorney general’s report. In late 2014, outside accountants reviewed D-H’s charitable fund at the request of D-H executives. Following the review, D-H determined that it must spend $6.1 million that had been donated over the years to the cancer center — and Israel was keeping in reserve — to comply with rules governing nonprofit organizations.

In an email to D-H’s 9,200 employees after the attorney general’s review was completed, CEO Jim Weinstein wrote that D-H had “complied with the spirit and letter of all applicable laws and regulations governing the use of those philanthropic funds.”

The attorney general’s announcement that it would take “no action” against D-H was a big victory for Weinstein and crew. But is that the end of it? D-H is certainly hoping so. In recent months, Weinstein has met with Norris Cotton employees, patients and donors to assure them that “every dollar raised for cancer is spent for cancer.”

D-H has also provided Norris Cotton with an additional $6 million for cancer research, patient support services, and faculty recruitment. “This has caused lots of anxiety for lots of people,” Weinstein said. “We can’t afford not to do it right.”

On Monday, I emailed John Vogel, who teaches courses in nonprofit management at Dartmouth’s Tuck School of Business, to get his take. It appears D-H was caught up in the distinction between restricted and unrestricted gifts, Vogel said.

A restricted gift can only be used for a specific purpose, such as a building project. Unrestricted money can be used as the “nonprofit deems appropriate as long as its fits the mission of the organization, including paying salaries and overhead,” Vogel explained in an email.

“Unfortunately, people giving to the Prouty believed that there was an implied promise that their donation was restricted when in fact it was an unrestricted donation.

“So while technically, D-H is legally allowed to use the money to pay salaries, in my opinion, doing so is unwise. The Prouty is a great event and anything that tarnishes its image is a mistake.”

The Prouty, which has grown into a two-day athletic event that includes cycling, rowing, golf and walking, attracts more than 5,000 participants and volunteers every July. Some, such as Mabey, are cancer survivors. “The Prouty is practically in my back yard, but until I got cancer, I didn’t realize the great things that it did,” she told me.

After her diagnosis in 2008, Mabey and her family began participating in the Prouty walk to raise money for Norris Cotton. They’ve also volunteered at the rowing event, handing out water and watermelon to participants, which has included her son, Pierce. Mabey, 53, who has been cancer-free for more than two years, said doctors and nurses at Norris Cotton “saved my life.”

She wants to continue giving back through the Prouty. But the news about how some of the money has been used for salaries and other operating expenses gives her pause. “We need more clarity on where the money is going,” she said.

My guess is an eight-page letter from the Attorney General’s Office that goes into some detail about accounting practices while avoiding the question of right and wrong won’t provide the clarity that Mabey and others want.

Jim Kenyon can be reached at jkenyon@vnews.com.





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