How is St. Jude's operating model different than other hospitals and charities?

As a children's research hospital, St. Jude must be able to provide lifesaving care to patients regardless of economic fluctuations, and this necessitates we maintain a reserve fund. It costs $2 million per day to operate St. Jude, and public contributions provide approximately 75 percent of the funds necessary to operate the hospital. No child pays for care or other needs, including housing, food and transportation, not covered by insurance. At St. Jude, only 13 percent of the money to operate the hospital comes from insurance recoveries and 12 percent comes from grants. This is vastly different than most other hospitals that can generate more than 90 percent of their revenues from insurance recoveries and other sources. And, it is a different financial and operating model than large grant-making charities.

The kids who come to St. Jude are suffering from catastrophic childhood illnesses such as cancer and sickle cell disease, and many of our treatment protocols require care that can last for years. For example, the three-year protocol to treat acute lymphoblastic leukemia (ALL), the most common form of childhood cancer, is more than $550,000. When we begin treating a child, we have a responsibility to ensure that we will be able to complete that treatment and care for that child for as long as they need us. This is critical for the approximately 5,700 patients we see each year, and we follow all patients for 10 years past the completion of their treatment as part of The St. Jude LIFE & After Completion of Therapy Clinic Presented by Kmart. Additionally, we are studying more than 4,000 St. Jude alumni cancer survivors through the St. Jude Life research study.

At the core of our mission is our ability to research and treat catastrophic childhood diseases for the patients who come through our doors today as well as the children who will need us in the future. As such, we maintain adequate reserve funds. The reserve fund consists of restricted funds that we cannot use and are legally required to maintain in perpetuity according to donor stipulations, and unrestricted funds that we could use in times of economic stress to ensure we can meet the hospital's operating costs for approximately 1.5 years. The availability of these funds allowed us to embark on The St. Jude Children's Research Hospital – Washington University Pediatric Cancer Genome Project, one of our most ambitious research efforts to date, during the heart of the economic downturn because we know that this initiative to sequence the pediatric cancer genome will forever change our understanding, diagnosis and treatment of cancer.

St. Jude is one of the world's premier pediatric cancer research centers, and our pioneering research and care have helped push the overall survival rate for childhood cancer from 20 percent when the hospital opened in 1962 to 80 percent today. In addition, St. Jude has achieved a 94 percent survival rate for ALL, up from 4 percent in 1962, and the survival rate for medulloblastoma, a type of brain tumor, increased from 10 percent to 85 percent today. St. Jude was the first institution to develop a cure for sickle cell disease with a bone marrow transplant and has one of the largest pediatric sickle cell programs in the country. Our research findings are shared freely with doctors and scientists all over the world.

For more information about our financials, please email annual.report@stjude.org.