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Layoffs Hit 26 At Arthritis Foundation

By Paul Clolery and Mark Hrywna - March 13, 2013

At least 26 employees at the Arthritis Foundation headquarters in Atlanta, Ga., were let go Monday during what the organization calls “a reorganization that has been structured to maximize the growth and impact of our mission.”

The organization released the brief statement making reference to a restructuring but at posting had not returned telephone calls.

According to the organization’s federal Form 990s, it has run deficits for three of the past four years. Revenue was at $62.3 million for fiscal year 2008 and plummeted to $53.13 million for fiscal 2011. The $53.13 million was a slight uptick from the $51.22 million for fiscal year 2010.

In fact, 2010 was a decent year, the only one of the past four when the organization ended with more revenue than expenses. The organization reported operating deficits of $1.136 million for 2008, $2.629 million for 2009 and $1.474 million for 2011. It squeezed out positive cash flow of $332,184 for 2010.

The organization’s listed net assets or fund balances on the Form 990 declined from $38.82 million in 2008 to $34.685 million in 2011. The numbers are significantly greater in the audited financial statements in the organization’s annual report.

The 2011 Form 990 was filed in June 2012, so the 2012 numbers are not expected until June 2013.

The federal tax form listed 169 individuals employed in the 2011 calendar year, although that can fluctuate based on staff turnover from year to year.

Insiders told The NonProfit Times that the organization has been challenged by an attempt to transition from a membership organization to more of a donor revenue organization. Also, the organization’s magazine Arthritis Today has been challenged by many of the same problems as other consumer publications.

A statement was released after multiple emails to the media relations office and to the CEO, John Klippel, M.D.

“After carefully considering our options to meet the challenges of a tough economy, the Arthritis Foundation is continuing our business plan to reshape our future and sustain our mission of leadership in the prevention, control and cure of arthritis. On Monday, the Foundation’s national leadership team announced a reorganization that has been structured to maximize the growth and impact of our mission. This realignment of roles includes staff cuts in operations and a significant reduction in administrative costs at the national level. This right-sizing is an activity that many organizations have undergone over the past few years as the economy labors to improve.”

It continued, “These changes will create efficiencies in operations and enhance critical mission delivery to our constituents. These actions are in the best interest of the Arthritis Foundation and most importantly people and their families with arthritis. We are an organization with unbelievably talented, dedicated and passionate people who have made the Arthritis Foundation part of their lives. We have a great deal of work ahead of us to realize our potential of making a meaningful difference in the lives of people with arthritis.”

The organization’s largest expense to an independent contractor was in the fundraising area. The agency was paid $11.09 million in 2011, $10.81 million for 2010 and $11.31 million for 2009. Gross fundraising revenue declined year-over-year. The Arthritis Foundation received $3.78 million for 2009, $3.107 million for 2010 and $2.99 million for 2011, according to Schedule G of the organization’s federal Form 990.

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