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National Multiple Sclerosis Society 1989 Annual Report.

NATIONAL MULTIPLE SCLEROSIS SOCIETY

REPORT FROM THE

CHAIRMAN OF THE BOARD

As our Society moves into the 90s, I am moved both to take a look back at the 80s, a decade of significant change and substantial progress at the Society, and to renew on behalf of my volunteer associates our commitments to our MS constituencies.

In 1980, the Society was under the executive guidance of its founder, Sylvia Lawry, and raised some $30 million from all sources annually with our major fund raising and public awareness program being [READaTHON.sup.sm].

During the 80s, our President, Thor Hanson, brought his special brand of leadership to Society affairs as Sylvia turned her attention to the increasingly important worldwide role of MS Societies. The Society is now raising $78 million annually, with fund raising focus on many participatory special events such as THE SUPER CITIES [WALK.sup.sm] and the MS 150 Bike Tours. Our chapters' relationships with each other and with the national office have never been more cordial. The Society is committing funds to MS research and related activities at a rate of $9.5 million annually. In addition, during the 80s the Society developed an effective advocacy presence in Washington, brought to bear an intensified focus on chapter service to people with MS and their families, and enhanced the role of the volunteer in our Society's work. The information on MS available to the public has increased dramatically in the past decade. Two new interfaces with the general public--our cause-related marketing activities and our direct mail fund raising campaigns--have made millions of people more aware of the problems of people with MS and have at the same time raised millions of dollars for services and research.

Our greatest disappointment during the past ten years has been our failure to unlock the secret of multiple sclerosis. Not that we haven't tried. Though the pace of scientific and medical research into MS has accelerated more quickly than ever before, concrete results remain elusively just beyond our grasp. Six scientists who have devoted much of their work in the 80s to a search for the key to multiple sclerosis describe for us later in this report how substantive has been our progress during this decade. Their names and the subject matter each addresses evidence both the outstanding medical scientists we have working on the MS mysteries and the range and breadth of inquiries being undertaken:

Dr. William A. Sibley, Diagnosis

Dr. Dale E. McFarlin, Genetics

Dr. Stanley van den Noort, Patient Management

Dr. Richard T. Johnson, Virology

Dr. Barry G.W. Arnason, Immunology

Dr. Kenneth P. Johnson, Clinical Trials

I urge you to read and ponder their promising reports.

Our Society's continuing pledge to you, our broad constituency of people with MS and their families, is that the funds we raise during the 90s will promote three objectives:

1) more high quality, leading-edge research projects (and hopefully extraordinary and productive results) and more highly trained and motivated researchers;

2) sharply increased and insightful service innovations to help those with multiple sclerosis live their lives with dignity, hope and satisfaction; and

3) a general public awareness that multiple sclerosis is a disease that can be combated successfully, but only with the assistance and the understanding of all of us.

We acknowledge that people with MS and their families depend on us to strive to accomplish these objectives and pledge to you our best efforts to achieve them.

REPORT FROM THE PRESIDENT AND

CHIEF EXECUTIVE OFFICER

The 80s have been a noteworthy decade for the Society. Scientists gained crucial insights into the mechanisms of multiple sclerosis that could ultimately prove pivotal in solving its riddle. An astonishing leap forward was made in concepts of self-image and independence among people with multiple sclerosis, profoundly affecting service development. We have achieved significant successes in influencing legislators and in communicating with the public. And, in the mid-eighties, we were able to break through the funding plateau the Society had encountered. As the details of these events are chronicled in the following pages, I shall focus my statement on the activities of the past fiscal year.

We closed FY 1989 with a substantial nationwide income from all sources of $78,330,802, a strong 16.1% increase over 1988. Campaign income from all fund raising events totaled $69 million, 20.5% more than the previous year. Traditional fund raisers such as the [READaTHON.sup.sm], UGLIEST BARTENDER CONTEST[R] and DINNER OF CHAMPIONS[R] continued to hold their own. The dramatic story of '89 lay in the figures for the MS 150 Bike Tour and THE SUPER CITIES [WALK.sup.sm]. The Bike Tour raised $15,300,000, a 66% increase over '88. Over 90 tours were held nationwide; about 55,000 cyclists participated, a 55% increase over '88 which, incidentally, also had been a banner year.

The appeal of THE SUPER CITIES WALK, whose debut in '89 far exceeded expectations, has been so strong that this year, "space walks"--special walks in small communities--were created to accommodate requests. The goal for the 1990 event, held on April 1 across most of the country, was set at $10 million, a 144% increase over the previous year. Although final figures are not in, we will beat that number.

It is worth noting that approximately 93% of annual campaign dollars come from chapter based events, a reflection of chapter vitality. In the past year the number of satellite branches has grown from 43 to 50 and a system of small community councils in outlying areas has been developed to further facilitate community participation.

This increasingly enthusiastic support is also a tribute to the vigor of such innovative visibility campaigns as the award-winning "Profiles in Courage" series and the provocative "One person can make all the difference" insert appearing in Newsweek. PROJECT REMBRANDT[R], our program for artists with MS, moved into the heartland of our nation on its latest tour. In Wichita, Kansas the exhibit sparked the interest of a whole new group of volunteers. In Peoria, Illinois it was used to teach college students not only about art but about the human condition. In sum, our dynamic public education efforts in '89 reached out to hundreds of thousands of potentially new supporters.

Conversely, our toll free information line (1-800-624-8236) is enabling more and more people to reach out to us for information and help. Last year, the Information Resource Center received close to 3,000 inquiries per month, up from 2,000 per month in '88. Chapters are also registering new highs in service. New, sharply focused programs that foster independence and reentry into the mainstream include respite care, programs for caregivers, updated employment preparation and special programs for singles, spouses and children.

Finally, and most important--we have been able to increase monies allocated to research. Our total expenditures on research in '89 were $9,524,325, 13.7% more than last year.

A good year of a good decade--a beginning of even greater growth. Total nationwide income for FY 1990 has been set at $87 million, an aggressive goal but one which we regard as not only realistic but beatable. The challenge is there. We accept it. With your help we shall meet it.

RESEARCH

As the final curtain goes down on the 1980s, clinicians and scientists can look with satisfaction at the many dramatic developments in MS research that have unfolded. New immunologic and genetic findings, some promising experimental therapies, and the advent of highly sophisticated diagnostic tools will help us to make even greater inroads into understanding MS in the decade to come.

Six research neurologists dedicated to multiple sclerosis have encapsulated the major developments of the past decade in their respective fields:

Genetics

Before 1980 the possibility of a genetic component in multiple sclerosis was supported by the publication of reports on the increased frequency of the disease in families, the fact that higher numbers of identical than fraternal twin pairs both developed MS, and variations in prevalence among ethnic groups.

In the last decade these findings became much firmly established. Population-based studies documented that 20% of MS families have more than one member with the disease. In many cases healthy identical twins of people with MS were discovered to have abnormal spinal fluid antibodies and magnetic resonance imaging lesions consistent with subclinical MS. Moreover, it is becoming increasingly clear that multiple sclerosis is influenced by many different genes.

In recent years scientists have searched extensively for genes that might be culprits in susceptibility to MS. A number of candidates have emerged, notably the genes that are responsible for a major part of immune function, the major histocompatibility molecules--known as HLA in humans. Thanks to advances in immunology we now know the structure and function of these HLA molecules. We know they appear on the surface of antigenic cells--those that can trigger immune responses--and are recognized there by the immune T cells. Extensive work is now being done to determine the HLA genetic characteristics of people with MS.

A second set of "MS genes" currently getting a great deal of attention are those that determine structure and function of recaptors on the surface of T cells that recognize a particular antigen. During the past year investigators at three different institutions have described a linkage between MS and certain T cell receptor genes. Additional genes related to gender, certain antibodies, and the migration of cells within the nervous system are probably also important in multiple sclerosis.

Advances in our understanding of these genes have paved the way to new forms of experimental treatment that have successfully curbed EAE, the MS-like disease in animals. Many of these new therapies may be applicable to MS as well. The next decade should tell the story.

Dale E. McFarlin, M.D. Chief, Neuroimmunology Branch National Institute of Neurological Disorders and Stroke

Immunology

It was just over 10 years ago that people with multiple sclerosis were first discovered to be deficient in their suppressor cell function compared with healthy people. In the ensuing years, several highly sensitive probes were developed which allowed us to recognize different types of lymphocytes. We were thus able to learn that the suppressor cell deficiency in MS was focused in one population of lymphocytes called "CD8-positive." We also found that a second population, called "CD4-positive," or "helper" lymphocytes, are activated (rather than turned off) in MS and enhance the immune response.

The decade also saw an explosion in our understanding of cytokines, the proteins that the cells of the immune system use to signal one another. One of these cytokines, called gamma interferon, has been shown to provoke MS attacks. Other cytokines, on the other hand, are known to counteract the action of gamma interferon; so one of these, called beta interferon, is now being tested as a possible treatment for MS in a clinical trial. A third cytokine called tumor necrosis factor (TNF), which is made and released by activated macrophages, is reportedly toxic to oligodendrocytes--the cells that make myellin--and causes demyelination. A challenge for the coming decade will be to find an antidote to TNF or to develop a drug that turns off its synthesis.

Finally, the last decade brought scientific recognition that interactions between the nervous system and the immune system occur at multiple levels. It seems probable that understanding these interactions will pave the way to new treatment strategies.

Barry G. W. Arnason, M.D. Chairman of Neurology University of Chicago

Virology

While there have been many changes in virology as it related to MS in the last decade, one thing remains stable: We have known, and continue to puzzle over, the fact that people with MS have abnormal antibody responses to a variety of viruses. This has led to a search for a specific virus or group of viruses that might trigger the disease. Over the last 40 years, and even during the last 10, many candidate viruses have been suggested, but none has been confirmed or proved to be specifically linked to MS.

Recent technological advances have increased the numbers of claims that an "MS" virus has been isolated. Most recently, the new, highly sensitive polymerase chain reaction technique was used to identify an HTLV-I-like retrovirus in MS. Unfortunately, there have been a number of attempts to confirm these reports--not all successful. Still, this new technological breakthrough is an important tool for identifying even the most minute amounts of a virus in MS patients.

Because of the incresing attention given to the viral disease AIDS over the last few years, there has been much concern that AIDS may drain funds away from research on diseases like MS. In fact, AIDS research can contribute a great deal to our knowledge of MS. The AIDS virus can cause demyelinating lesions in the brain, and the mechanism by which it occurs is leading us to new insights on the MS process as well.

It is interesting that in the last decade the belief that viruses are critically involved in MS has never really changed. New knowledge of viruses in MS and other neuro-immunological diseases is increasingly driven by new technology; and our understanding of the whole complex MS process is going to leap ahead as a consequence.

Richard T. Johnson, M.D. Neurologist-in-Chief Johns Hopkins Hospital

Patient

Management

Ten years ago many people with multiple sclerosis remained without diagnosis and spent much time moving from doctor to doctor for an explanation of their symptoms. Today, with better techniques, we are diagnosing the disease much earlier, which is leading to better management.

Treatment of MS is still mainly the province of neurologists, who are better educated in the more useful ways of managing MS symptoms than they were 10 years ago. They are using tools that have been with us for some time, but using them much more widely. Some of these include physical therapy, drugs for spasticity, and techniques for dealing with urinary and mobility difficulties. The widespread problem of fatigue in MS is now often treated with amantadine or pemoline; some patients respond well to these drugs. The proper of steroids in managing acute MS attacks is better understood and applied with greater skill and less risk than was previously the case. There are now more organized clinics in the U.S. that provide comprehensive care for MS patients. Recently it has been found possible in some cases to slow or arrest the progress of MS by administering quite toxic treatments. These have proved risky enough to be limited to highly selective circumstances and then with great caution. But we expect that the next decade will bring better drugs with less risk.

Finally, I believe that there has been a gradual decline in the "unproven remedies" highly touted for MS. This is healthy sign of a more informed public.

Stanley van den Noort, M.D. Chairman of Neurology University of California, Irvine

Diagnosis

Without doubt the most important MS diagnostic advance in the last decade has been the advent of the magnetic resonance imaging (MRI) scanner. Not only has this instrument greatly facilitated diagnosis but it has also given us new knowledge about the natural history of the illness and a method of accurately monitoring treatment.

MRI is 20 to 30 times more sensitive than computerized tomography, another method we use for observing central nervous system changes that occur in MS. Before MRI we had no way of detecting the many MS lesions that develop in sites where no symptoms result. We now know that a patient may have up to six times as many lesions as could be estimated by the new symptoms and changes seen in the traditional neurological examination. However, MRI lesions don't equal MS: they may be due to other causes.

But in general about nine out of 10 patients who have definite multiple sclerosis based on well established clinical criteria also have multiple lesions visible on the MRI scan. About the same numbers have abnormalities in central nerve function as measured by visual evoked-response tests. Anywhere from 70% to 90% of MS patients show typical changes in their spinal fluid. Thus, today, we can say with confidence that if a patient scores normal on the MRI examination, visual evoked responses, and spinal fluid testing, a dignosis of MS becomes highly improbable.

William A. Sibley, M.D. Professor of Neurology University of Arizona, Tucson

Clinical

Trials

The 1980s were productive and exciting years in our search for new forms of therapy for MS. Many experimental trials were conducted; and major advances in immunology made it possible for clinicians to test new therapies designed to have a specific effect on the immune abnormalities of MS. Three important immunosuppressive treatments were tested for chronic-progressive MS: intravenous cyclophosphamide, oral cyclosporine, and total lymphoid irradiation. Some benefit was derived with all three therapies; however, each produced significant side effects (or carried long-term risk) mandating that they be used with considerable caution. New schedules of cyclophosphamide treatment continue to be evaluated.

Copolymer I, developed in Isreael during the early 1970s, was finally subjected to preliminary evaluation. In the early stages of MS, Cop i markedly reduced new attacks or repeat exacerbations. Its effect on chronic-progressive disease was less noticeable. There is considerable enthusiasm for further study of Cop I, and a major definitive trial will be started this year.

Interferons, natural human proteins with antiviral functions, were perhaps the most interesting agents tested during the 80s. Five major studies were undertaken on all three interferons: alpha, beta and gamma. Both subcutaneous and spinal fluid injections were used, and varied doses were tried.

The most important of these studies involved gamma interferon, which surprised everyone by stimulating new MS attacks. While this was not what we had bargained for, nevertheless it showed us that gamm interferon plays a central role in triggering exacerbations. It also suggested that if gamma interferon could be inhibited, then perhaps MS could be controlled. Since laboratory studies had shown that beta interferon inhibits the production of gamma interferon, it was decided to do a trial of synthetic beta interferon. The agent proved to be safe even when injected subcutaneously in high doses for prolonged periods. Now its effectiveness in early MS is being tested in a large, multicenter trial at 11 university centers in the U.S. and Canada. A second study is pending.

Recent progress in defining the immune derangements in MS may allow investigators to pinpoint a specific abnormality that could be reserved through the use of monoclonal antibodies or lymphocyte "vaccines". Hopefully, such studies will lead us in the 1990s to what everyone wants: a total cure for multiple sclerosis.

Kenneth P. Johnson, M.D. Chairman of Neurology University of Maryland

SERVICES

Along with the growth of scientific information, the 80s saw a new declaration of rights being formulated by people with multiple sclerosis. For the Society, it manifested itself with an assertion by Terry Brinkley, 1983 Achievement Award Winner. "We are not MSers; we're not MS patients," he said at a national conference. "We are people who have MS."

Going--going--gone was the image of a "passive patient" for whom things "were done." The NMSS took a leadership role in evolving a concept of services that moved from "protection of patient" to "partners in management." The national office, chapters and our membership became active working partners in developing new strategies for coping with the disorder on a day-to-day basis; strategies designed to bring people as far into the mainstream as possible. The effect were seen in three major areas:

Information

What people with MS requested most was as much information about the disease as could be given. Consequently, the decade saw an explosion of literature. Between 1979 and 1989, over twenty new brochures were added to our publications list. An eight-page "patient services" newsletter was expanded into a quarterly magazine with in-dept coverage of research and coping issues. A "Facts & Issues" series was created; we now have fifteen issues available on topics from visual impairment to bladder dysfunction to how to prepare for an MRI.

The most comprehensive addition to our information services came with the development of the Information Resource Center (IRC) three years ago. The IRC, whic houses an extensive library of books and pamphlets in a computerized, centralized location, has quickly emerged as a primary source of information on MS for both the lay and scientific communities. Since its inception, the IRC has handled more than 67,000 written and telephone queries; some 2,800 per moth come in on its toll-free information line, 1-800-624-8236.

Self-understanding

With a better knowledge of the disease came the challenge of exploring solutions that would help put a person more in control of his or her life. Counseling services offered the value--and in the last decade they have proliferated. Only 36% of our chapters sponsored programs in 1979; today, two-thirds are involved in a multitude of approaches.

These services include group and one-on-one counseling; programs for the newly diagnosed, caregivers, families--and the fastest growing of such support systems--peer-to-peer counseling. In 1980 there were 357 self-help groups; the decade closes with 1,032 groups with 24,000 members meeting across the nation.

Lifestyle Management

The combination of information and heightened self-awareness resulted in a great step forward: it enabled people with MS to develop an acceptance of and trust in their own bodies. From this grew the realization (soon accepted by the medical community) that exercise could be beneficial; that a spot in the workplace was not an impossible dream; that adaptive equipment was not a crutch but a lifeline to easier living; that family life and a sexual relationship need not be automatically abandoned.

The Society developed an unheard-of expansion of services designed to enhance lifestyle management so that each person could make full use of his or her abilities. Chapter offer the opportunity to go to camp; to get away for a weekend; to borrow exercise videotapes and to participate in an extensive employment preparation program.

It has been a decade of giant strides forward in the development and delivery of services. But it is only the beginning.

PUBLIC EDUCATION

"Multiple sclerosis, that's hard to pronounce," people used to say and then quickly, "What is it?" You don't hear that so much anymore. Today, according to a recent national poll, multiple sclerosis is one of the top twenty diseases most frequently recognized by the public.

This dramatic change is the result of an innovative, varied public education campaign dedicated not only to gaining recognition but to delivering a message of ability.

INSIDE MS debuted in 1983. It aimes to present information, but also to affirm that people with MS do lead fulfilling and enriching lives. Four times a year, its audience of 400,000 metts "heroes" who may not make the headlines but who work, play, love and raise families while coping with their disorder.

Also in 1983 we initiated PROJECT REMBRANDT[R], a program for artists with Ms that proves that professionalism does not disappear with the onset of disability. Last year, 20,000 visitors to the IBM Gallery of Science and Art viewed the exhibit. Its message will reach another 200,000 people during its current six-city tour.

The landmark "Profiles In Courage" series of ads is perhaps our most expansive effort to effect change in attitudes. Implemented in 1988, the campaign tells the stories of seven individuals with varying levels of disability who excel in challenging fields. Some 85 million readers have met these inspiring people through coverage in national magazines and newspapers, including The Wall Street Journal and The New York Times and another 100 million through broadcast attention. Our "one person can make all the difference" theme was also carried into a Newsweek advertorial sent to a select group of 650,000 readers.

Other educational efforts include:

* Thank You Week, inaugurated in 1988 as an expression of our gratitude to the Society's many supporter. Last year spokesperson Debra Norby, a Sculptor featured in PROJECT REMBRANDT, launched the campaign on the "Today" show and our "Thank You" ads appeared in publications including Fortune, The Atlantic and National Geographic.

* THE SUPER CITIES [WALK.sup.sm], the Society's first national event. It reached 81 million people with the help of celebrities including Daniel J. Travanti and Danny Pintauro. Coverage ranged from "Good Morning America" to USA Today and Pennysavers in local supermarkets.

* Our MS Mother and Father of the Year. Shiela Ann Olsen and Steve Adams, were honored at the White House; while articles about Billie Ethridge, our courageous National Achievement Award winner, were read by some 10 million people.

* Our 1990 Mercedez Benz calendar, "The World of Golf." It attracted interest from virtually every gold publication, as well as USA Today and Family Circle among others.

* Over one dozen stories on research and medical aspects of MS.

In 1989 alone, 400 million impressions of MS were made in the media. We are grateful to them, to the celebrities, to our volunteers, and most of all to those with multiple sclerosis who have shared their stories. They are all helping us create a new climate for America's disabled.

GOVERNMENT RELATIONS FUNDING

The Society has long been aware of the need to influence government. Early efforts, by and large, were aimed at forming coalitions to obtain funding for neurological research. But our focus widened in the 80s: we began to seek legislation that would improve the day-to-day lives of people with MS. That meant educating policy makers about the nature of the disease and its effect on families. Between 1980 and 1983 we worked to have fatigue--that pervasive symptom so difficult to understand--considered in the assessment of disability for Social Security applicants, and by 1985 we had won that battle.

The latter part of the decade saw the introduction of the first MS-specific legislation--the Sikorski Bill. Ultimately, a good portion of it was passed, upgrading Social Security Disability Insurance benefits and improving work incentives. Other decade highlights included passage of the Civil Rights Restoration Act, the Fair Housing Act and the introduction of the landmark Americans with Disabilities Act.

The most exciting advance of the decade was the growth of an active, coordinated grass-roots movement among people with MS. The same combination of information and self-understanding that changed people with MS from passibe patients to active determinants of their futures helped galvanize their efforts to influence policy. Through the Action Alert program, initiated in 1984, the national office, chapters and individuals joined forces to realize a three-point plan: to apprise federal, state and local governments of the needs and rights of people with disabilities; to develop chapter-based movements, and to build statewide coalitions of organizations with similar needs.

By 1989 membership in Action Alert topped 5,200, grass-roots committees were active in 37 chapters and 4 statewide coalitions had begun pursuing legislative, regulatory and funding issues.

Fortified by this network, we chalked up a number of victories in '89, among them:

* The Omnibus Budget Reconciliation Act which provides for Medicare purchase of all power wheelchairs, and gives those who have left SSDI the option of buying Medicare coverage.

* The Health Care Financing Administration's decision to allow those who are chronic or stable to receive Medicare home health benefits.

* A provision in the Basic Health Benefits for All Americans Act mandating coverage of adult dependent children in employer health policies.

We enter the 90s with a full agenda: to secure passage of the Americans with Disabilities Act; to make basic health benefits available to all Americans and to develop a long-term care system that supports the independence of people with chronic illness. We must continue to educate, activate and advocate.

FUNDING

Without the funds, the most vital and noble of aims will go unfulfilled. It is a tribute to the tireless efforts of volunteers and staff that both campaign and total Society income increased 2-1/2 times from 1980-1989; 3 chapters exceeded one million doallars in total income in 1980; 21 chapters eclipsed that marker last year.

The decade also saw the phenomenal rise of the MS 150 Bike Tour--currently the Society's largest campaign. It soared from 3 chapters raising $142,000 to 90 chapters bringing in $15,300,000.

In that same period, 4 million students raised over $66 million in our [READaTHON.sup.SM] program; bartenders collected $36 million in our unique UGLIEST BARTENDER CONTEST[R] (Ugly=understanding, generous, loveable you) and over $33 million was raised at prestigious DINNERS OF CHAMPIONS[R] nationwide.

It is a wide span from children to bartenders, from bike riders to corporate leaders, but it is testament to the healthy base of support we enjoy--a foundation that has enabled us to expand traditional programs and initiate new campaigns.

The major gifts program, aimed at corporations, foundations and individuals, garnered over $600,000 in FY '89 and is projected to reach $1.1 million in FY '90, an 80% increased over its initial showing in '88. The direct mail program was up 24% in '89 with a year-end total of $3,900,000--attracting 250,000 new contributors in its four years. The Research Development Fund (RDF) Associates Program helped the Society finance a record number of grants in '89.

The challenge of conquering MS was embraced by college students active in STudents Against Multiple Sclerosis (SAMS), and by young professionals whose energy was funneled into Young Professional Group events generating $1.2 million, a 28% increase over FY '88.

Our marketing division, created three years ago to secure sponsorship funds and in-kind products and services, has also flourished. In 1989, Canada Dry was presenting sponsor for the first SUPER CITIES [WALK.sup.SM], with Keebler, Tetley and Devonsheer Melba Toast as associate sponsors; Mercedes Benz continued its generous support with the "Andy Warhol Cars,"--the best-selling calendar in an eight-year old series; and Maxwell House, Games Gang and Maxell Tape sponsored SAMS on more than 200 campuses.

Citizens of all ages and professions took up the torch in FY '89 and participated in our first nationwide fund raising event, THE SUPER CITIES [WALK.sup.SM]. In its historic premiere, 30 chapters garnered $4.4 million, surpassing our goal by $2 million. Our sights aim even higher for FY '90 with a collective goal of $10 million to be raised by 80 chapters.

These are exciting days. We are grateful to all the friends who have helped us come so far and, forces joined, inted to surpass even these milestones in the 90s.

REPORT FROM THE TREASURER

The National Multiple Sclerosis Society depends on the volunteer services and contributions of the American public to carry out its programs. Their service and financial support make it possible to fund research and to provide the educational and service programs covered in this report.

The financial support received by the Society in 1989 was outstanding. Nationwide income (combined public support and revenue before direct benefit costs of special events) was $78,330,802, up $10,863,420 or 16.1% from 1988. The success of our chapters in carrying out numerous special events programs, including THE SUPER CITIES [WALK.sup.SM], and the national direct mail program, were the primary contributors to our growth in nationwide income.

With the exception of the direct mail and Students Against Multiple Sclerosis programs conducted by the National office, all undesignated monies received by the Society are allotted according to a standard formula: 60% is retained by the local chapters to support patient and community service programs and for professional and public education and supporting services; 40% is assigned to the National office for research, research fellowship programs, patient and community service programs and supporting services. For the two nationally conducted programs, 60% is retained by National and 40% is distributed to chapters. All designated funds are used for the purpose specified by the donor.

At the National Headquarters, total research expenditures in 1989 were $9,524,325 the highest level in the Society's history. In anticipation of continued strong financial support, the Society's Board has budgeted $10,900,000 in 1990, a 14% increase.

The audited financial statements for the National office as well as the combined financial statements of the National office and chapters are presented in the following pages. These statements and the accompanying notes have been prepared in accordance with the Standards of Accounting and Financial reporting for Voluntary Health and Welfare Organizations and with the Audit Guide published by the American Institute of Certified Public Accountants. The Society is a member of the National Health Council and maintains accounting policies in compliance with the Council's standards as well as the standards of the National Charities Information Bureau.

The Society's directors, officers and staff have striven to achieve the highest level of stewardship for the funds entrusted to the Society by the American public and are committed to do so in the future.

Report of Ernst & Young, Independent Auditors

Board of Directors National Multiple Sclerosis Society (National Headquarters)

We have studied the accompanying balance sheet of the National Multiple Sclerosis Society (National Headquarters) as of September 30, 1989, and the related statements of revenue and expenses and changes in fund balances and of functional expenses for the year then ended. These financial statements are the responsibility of the Society's management. Our responsibility is to express an opinion on these financial statements based on our audit. We previously made a similar audit of the financial statements for the preceding year and our report thereon dated December 16, 1988 expressed on unqualified opinion.

We conducted our audit in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the National Multiple Sclerosis Society (National Headquarters) at September 30, 1989, and the results of its operations and changes in fund balances for the year then ended in conformity with generally accepted accounting principles.
COPYRIGHT 1990 National Multiple Sclerosis Society
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Date:Mar 22, 1990
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