The modern marvel of Facebook and other social networking sites has been consuming the leisure time of many Americans for quite a while now, and there is no end in sight. But besides providing an easy outlet for sharing photos of children or grandchildren, vacations, pets, or meals, wishing casual acquaintances a happy birthday, or engaging in endless, vicious political debates with total strangers, as well as making Mark Zuckerberg and others rich, is there any greater value to society from all this behavior? Well, yes, there can be, and there has been.

Remember the “Ice Bucket Challenge?” In the summer of 2014, three young men living with Amyotrophic Lateral Sclerosis (ALS) motivated millions of people all over the world to dump buckets of ice water on their heads and post video of it online to fight this terrible disease.

ALS is the first disease ever nicknamed for one of its victims—the beloved New York Yankee Lou Gehrig. It is a crippling, rapidly progressing, neurodegenerative disease with no known cure or, in most cases, cause. ALS is invariably fatal—typically in two to five years from diagnosis—and it is not rare. According to the ALS Association (ALSA), it is estimated that more than 20,000 Americans may be living with ALS at any given time, and approximately 6,000 are diagnosed with it each year. Click here to learn about ALS.

ALSA says the Ice Bucket Challenge (IBC) remains “the world’s largest global social media phenomenon. More than 17 million people [in 2014] uploaded their challenge videos to Facebook … watched by 440 million people a total of 10 billion times. It is now an annual event to raise awareness and funds to find treatments and a cure” (http://www.alsa.org/about-us/ice-bucket-challenge-faq.html). In the July 2016 Journal of Accountancy , editorial director Ken Tysiac wrote that “the Ice Bucket Challenge is the ultimate case of a technological triumph in not-for-profit fundraising” (“Getting Creative in Fundraising,” http://www.journalofaccountancy.com/issues/2016/jul/creative-fundraising-ideas.html). Robert Frank of CNBC called the IBC “the ice bucket that opened the floodgates of charitable giving” (“Ice Bucket Challenge Rewriting Charity Model,” Aug. 19, 2014, CNBC, http://www.cnbc.com/id/101930449). Long before it reached its peak, Frank wrote:

The business of getting people to give to charity has changed remarkably little over the 125 years since Andrew Carnegie first ushered in modern philanthropy with his book, The Gospel of Wealth … The Ice Bucket Challenge, however, may have just thrown cold water on that model. … Charities may now look to use social media to reach a broader base of donors, rather than just a select few wealthy givers. And they will look for more creative and entertaining ways to raise awareness about a cause.

What Effect did the IBC Have on ALSA?

By the end of September 2014, ALSA had received an incredible $115 million from IBC donators—in less than 60 days. This represented an increase of over 3,500% in funds raised over the same two-month period in 2013, equal to 375% of its annual revenue for the previous fiscal year. It consisted mostly of small donations (but with some ranging up to $200,000) and came from over 3 million donors, over 2/3 of whom were new. According to ALSA, more than $220 million was donated worldwide to ALS charities, with more than half that to in the United States. Overnight, ALSA was transformed into a major charity.

After the summer of 2014, ALSA committed IBC dollars to global research, service programs to benefit ALS patients (including as prize money for the design of technology to combat the rapid breakdown in their ability to control muscle movement), and lobbying Congress to expand support for ALS care and research (http://www.alsa.org /fight-als/edau/ibc-history.html ) .

In July 2016, ALSA announced the discovery of a gene, NEK1, which scientists say is among the contributors to about 3% of ALS cases. ALSA invested $1 million of IBC proceeds in this research. (Katie Rogers, “The ‘Ice Bucket Challenge’ Helped Scientists Discover a New Gene Tied to A.L.S.,” New York Times , Jul. 27, 2016, http://www.nytimes.com/2016/07/28/health/the-ice-bucket-challenge-helped-scientists-discover-a-new-gene-tied-to-als.html?). In 2015, Time reported that, with IBC money, researchers from Johns Hopkins University determined that a protein that fails in the cells of most ALS patients (TDP-43) could be repaired such that “the damaged cell can heal” (Ethan Wolff-Mann, “Remember the Ice Bucket Challenge? Here’s What Happened to the Money,” http://time.com/money/4000583/ice-bucket-challenge-money-donations). Jonathan Ling, a researcher on the TDP-43 team, said: “All of your donations have been amazingly helpful, and we have been working tirelessly to find a cure. With the amount of money that the ice bucket challenge raised … there’s a lot of hope and optimism now for real, meaningful therapies” (Lyanne Alfaro, “Your $220 Million to the ALS Ice Bucket Challenge Made a Difference, Study Results Show,” Business Insider , 2015, http://www.businessinsider.com/your-220-million-to-the-als-bucket-challenge-made-a-difference-2015-8).

Meeting the ALSA’s Financial Management and Accountability Challenge

Of course, the sudden, unplanned, and unprecedented volume (or, perhaps, downpour) of cash donations presented a formidable financial management and accountability challenge to ALSA’s managers and board of directors, especially with the then-small staff. It is apparent, however, that this challenge was met responsibly, swiftly, and admirably.

Gregory L. Mitchell, ALSA’s executive vice president, finance, and administration (i.e., its CFO), was asked in early 2017 how ALSA was able to modify its internal control and other operating procedures, to assure its volunteer leadership and donor constituency that despite the sudden, unexpected inflow of unprecedented volumes of cash, that the following control objectives would be suitably met, and his responses are shown below in italics:

LEVY: All IBC proceeds intended for ALSA were, in fact, received, recorded and deposited timely in its bank accounts and that donor restrictions, if any, are captured, complied with, and properly accounted for?

MITCHELL: The majority of IBC proceeds were processed online through our website and credit card receipts were deposited directly into our bank accounts. Most remaining receipts were processed by our third-party, direct-mail caging company. Our bank accounts were subject to monthly reconciliations reviewed and approved by management. We also obtained annual reports by independent CPAs who tested controls over processing our transactions applied by our caging company and by our website/system vendor.

All IBC proceeds intended for ALSA were, in fact, received, recorded and deposited timely in its bank accounts and that donor restrictions, if any, are captured, complied with, and properly accounted for? LEVY: Any depository institutions holding deposits in excess of federally insured limits were believed to be healthy, and not at risk of a failure that would result in a loss to ALSA?



MITCHELL: We maintained bank accounts at two of the largest financial institutions here in the United States known to be financially sound.

Any depository institutions holding deposits in excess of federally insured limits were believed to be healthy, and not at risk of a failure that would result in a loss to ALSA? We maintained bank accounts at two of the largest financial institutions here in the United States known to be financially sound. LEVY: Cash on deposit in excess of current needs was invested temporarily in accordance with duly approved and appropriate investment objectives and risk tolerance levels?

MITCHELL: The IBC funds were quickly invested initially for the short term in a high quality money market fund. In May 2015, ALSA’s Board of Trustees selected and engaged a new investment advisor to guide our investment of these funds in accordance with a new investment policy statement adopted by the Board and formulated specifically to address investment objectives and risk tolerances deemed appropriate for the IBC funds. In doing so, the Board considered the planned timing of utilization and provided for short-, intermediate- and longer-term investment pools with separate risk assumptions.

Cash on deposit in excess of current needs was invested temporarily in accordance with duly approved and appropriate investment objectives and risk tolerance levels? LEVY: That appropriate due diligence was maintained to ensure the continuing quality and high probability of success of approved research and other major grants?

MITCHELL: The IBC brought unprecedented media exposure to ALSA and the ALS cause in a way that was invaluable. But it also raised significant expectations and demands for transparency as to the use of the funds from both the media and the public. Recognizing this, we immediately set out to keep the public well informed online, almost daily at first, as to the progress of the IBC campaign and as to steps being taken, commitments made, and plans put in place to ensure prudent management of, and accountability for, the IBC funds.”

That appropriate due diligence was maintained to ensure the continuing quality and high probability of success of approved research and other major grants? LEVY: That adequate budgetary and other controls were in place to safeguard available resources against excessive staff bonuses and unauthorized expenditures?

MITCHELL: ALSA’s leadership determined that its post-IBC goal would be to triple research spending on an ongoing annual basis (from approximately $6 million to $18 million or more). We are tracking close to this threshold currently. We maintain a process similar to what was in place prior to IBC, which entails obtaining formal proposals from researchers that are evaluated for quality and promise by our Chief Scientist and our Research Committee and recommended to our Board for approval

We didn’t have to change much regarding our controls over the budget process, which was well developed before IBC. Prudent Board-approved increases in expenditures consisted primarily of research or chapter grants and related patient care service initiatives but did not include any unusual/excessive bonuses to staff members. We continue to look at our spending closely in relation to our budget and challenge ourselves to ensure that we are being good fiduciary stewards of our resources both before and after IBC.

That adequate budgetary and other controls were in place to safeguard available resources against excessive staff bonuses and unauthorized expenditures? LEVY: That sufficient, accurate information was made available frequently and timely to ensure the desired level of accountability and transparency for IBC results and related activities to all constituents?

MITCHELL: Although the majority of donations received online were unrestricted, we added a button to our website to allow donors to restrict the IBC donations for research. Our system was suitably designed to track restricted online or offline donations and their release from restrictions to assure compliance and proper reporting

Responsible Stewardship

In 2016, this author spoke to Barbara Newhouse, ALSA’s president and CEO (newly hired at the time of the IBC) about the opportunities and challenges facing the organization:

Our volunteer leadership and I were aligned in the belief that we needed to spend dollars wisely and in ways that will have the most lasting impact on the fight against ALS. Stewarding donors and operating with transparency have been paramount. Over the last two years, press releases, infographics, and email communications have all detailed how participation in this social media phenomenon has made a lasting and profound difference. We are so grateful that things we had hoped to fund prior to 2014 suddenly became a reality, and progress is being made.



It is noteworthy that the IBC’s results were obtained with virtually no expenditures of fundraising costs or efforts on the part of ALSA or other beneficiary organizations. Without question, these results clearly demonstrate the enormous power of social media in the world today.

How’s that for redeeming social value?

The author dedicates this piece to the memory of his dear father, Jack Levy, who succumbed to ALS in 1986.

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Howard B. Levy, CPA, is a principal and director of technical services at Piercy Bowler Taylor & Kern, Las Vegas, Nev. He was national Treasurer and Chief Financial Officer of the ALS Association from 1987 to 1994, a former member of the AICPA’s Auditing Standards Board and its Accounting Standards Executive Committee, and is currently a member of its Center for Audit Quality’s Smaller Firms Task Force. He is also a member of The CPA Journal Editorial Board and winner of the 2016 Max Block Award for Outstanding Article in the Area of In Focus/Feature.