N.Y. tax checkoff funds for cancer research sit idle

David Riley | Rochester (N.Y.) Democrat and Chronicle

ROCHESTER, N.Y. -- Since 2005, New York taxpayers have donated $1.8 million through their income tax returns to aid the fight against prostate cancer, but researchers have yet to see a dime.

The prostate cancer research fund is one of eight causes state residents can support through a checkoff on their tax forms, giving up part of their refunds or adding a bit to what they owe to donate to everything from wildlife programs to research on Alzheimer's disease.

But a 2004 state law set up the prostate cancer research fund unlike any other tax checkoff program, and that unusual structure has led to long delays. Records from the state Comptroller's Office show the fund had not yet paid out any money as of December 2012, and the state Department of Health confirmed that no funding has been released.

Local survivors and New York advocates for prostate cancer patients said they were troubled that the money is just sitting in an account.

"I didn't know it existed, but now that I do know, I think it's stupid," said Dick McGlynn, peer facilitator for a prostate cancer support group in Rochester. "You're looking at eight years of money accumulating."

While most tax donations go into funds administered by state boards or agencies, the prostate cancer law requires the money to go to an outside nonprofit, the New York Coalition to Cure Prostate Cancer. In an arrangement state leaders promoted at the time as a unique public-private partnership, the California-based Prostate Cancer Foundation agreed to match taxpayer donations dollar for dollar by contributing to the same nonprofit, which then would finance research and prevention programs.

Setup unworkable

Nine years later, that relationship has proved unworkable, though details are scarce on exactly why. While the Department of Health has made numerous attempts to set up a plan and administrative process to release money to the nonprofit, "they have been, frankly, unsuccessful," department spokesman Bill Schwarz said recently.

While Schwarz could not explain the holdup in detail, he said the department may have to work with the Legislature to resolve the impasse. That might include changing the 2004 law so the money does not have to go through a specific nonprofit, he said.

"That is priority one, certainly, to resolve that," Schwarz said.

This much is clear: The New York Coalition to Cure Prostate Cancer did not exist before 2004, the year the checkoff law passed, and the Internal Revenue Service automatically revoked its federal tax-exempt status in 2011 for failing to submit required returns three years in a row. It has no website or readily available contact information online.

In New York state's corporation database, the coalition is closely tied to the California foundation. The organizations share an address in Santa Monica, Calif., and the coalition's listed contact, Richard Sandler, is a board member of the California foundation.

Sandler also is listed as executive vice president of the Milken Family Foundation, co-founded by financier-turned-philanthropist Michael Milken, who also established the Prostate Cancer Foundation.

No reports issued

State law required the new nonprofit to issue annual reports on its prostate cancer grants. Asked whether it could produce these documents, Prostate Cancer Foundation general counsel Kathryn M. Schwertfeger provided a statement saying that because the state has not yet transferred any money to the coalition, no reports have been issued.

Schwertfeger also noted that the foundation has funded more than $52.5 million in prostate cancer research in New York state over the past 20 years, regardless of the checkoff arrangement. She declined to answer other questions.

At the end of last year, the prostate cancer fund's balance totaled $2.9 million, including $1.8 million in taxpayer donations, nearly $987,000 in state matching funds and about $116,000 in interest earnings, according to the records from the Comptroller's Office.

The 2004 law says all funds should be expended in the same fiscal year they are received, but only "to the extent practicable."

Norbert Rappl, a 10-year prostate cancer survivor from Irondequoit, was not aware of the prostate cancer checkoff program, but he said it is a disgrace the money has yet to be put to use.

"If they want people to buy into that, they've got to make people aware of it," Rappl said. "They've got to make it visible. They've got to show something's being done."

Darryl Mitteldorf, chairman of the New York State Prostate Cancer Coalition, also described frustration, yet the fact that the money remains available is a "stunning opportunity," he said.

"There's a great deal of money that could be used to help men with prostate cancer in New York state that seems to have been designed to be diverted to an organization in California," Mitteldorf said.

"We feel that money could be best used as intended — to serve the men of New York state with improved prostate cancer research and awareness."