What to know about Four Diamonds, THON's beneficiary

Real quick: Penn State’s Four Diamonds has spent $239.4 million since fiscal year 2009. Spotlight PA’s Wyatt Massey reports what we know about how the money was used.

A little more: For years, thousands of Penn State students have participated in a grueling philanthropic ritual: 46 hours of standing, dancing, and cheering to fundraise for children with cancer and their families. 

The dance marathon, which takes place this weekend, and has received support from celebrities such as Khloé Kardashian, is the culmination of a yearlong effort by the student organization THON to solicit donations from across Pennsylvania and the United States.

The money students raise goes to Four Diamonds, a charity nested inside the Penn State system.

And while THON promotes the benefits for children and their families, Four Diamonds uses the majority of the money to fund research and related endowments.

Four Diamonds received criticism in the past for a lack of financial transparency, and began disclosing additional information in response. However, other parts of how the organization operates remain difficult to understand. 

Four Diamonds funds Penn State endowments, but shares few details publicly about how it is managed. Gil Pak, operations director for Penn State Health Children’s Hospital Department of Pediatrics, told Spotlight PA the endowments are valued at $110 million.

In 2020, as part of its efforts to address allegations of “discriminatory practices,” THON pledged to release demographic information about who the charity helps. That effort has so far not materialized.

Because Four Diamonds is organized under the school, it does not file a 990 tax form. That means it does not have to disclose the salaries of top employees, total assets, liabilities, governance, and other information that would typically help the public understand how money is being used.

Penn State is already less transparent than other public universities due to a special exemption given to it by Pennsylvania’s open records law.

Todd Ely, an associate professor at the University of Colorado Denver who studies nonprofit financial management, told Spotlight PA that housing a charity within a public institution like a university can complicate the typical options for public transparency.

“That puts a bit of the responsibility on the organization itself to step up and make sure that they’re providing enough information that donors do have a clear picture of both how much money is being raised but also how those funds are being used,” he said. 

Ahead of THON dancers standing all weekend, Spotlight PA sought to clarify the relationship between Four Diamonds and the university. The day before a scheduled interview with Spotlight PA, Four Diamonds and THON leaders canceled due to “changing schedules” and requested that questions be sent in writing. (You can read their full responses here.)

Spotlight PA analyzed Four Diamonds’ spending over the past 14 fiscal years, spoke with experts who study charitable finances, and sought information from Four Diamonds and THON about how they operate.

The full story: Read more here.