April 9, 2011; Source: Las Vegas Sun | Some nonprofit failures reverberate through a community with a meaning that extends far beyond the specific organization and its financial troubles. The rapid financial implosion of the Nevada Cancer Institute is having that kind of impact in Nevada.

Apparently, it had expanded, borrowed, invested, and built to become Nevada's answer to the MD Anderson Cancer Center at the University of Texas in Houston. Now, after years of multimillion-dollar grants and big plans, the institute is laying off 150 of its 330 employees (on top of 30 laid off last month and 50 in 2008). The need for layoffs and for “right sizing” the Institute is attributed by the board leadership to the impact of the recession on charitable giving. The Las Vegas Sun quoted spokespersons for Giving USA and Charity Navigator to say that funding in the recession shifted from institutions like the Institute to food and shelter organizations.

But the recession/giving argument doesn't fit founder Heather Murren's contention, according to the Las Vegas Review-Journal, that the Institute never really anticipated relying on charitable donations for its operations and future, instead it expected to look more to government revenues such as the $20 million in state funds and $40 million in federal dollars it had received. Substantial philanthropic contributions, as much as $58.1 million in 2006, had also come in, but its finances had actually hit the skids before the recession.

According to its tax filings, the Institute lost $23 million in 2007 and another $5 million in 2008. After shedding staff and cutting salaries, it lost only $1 million in 2009, but its liabilities had grown to $108 million. It is hard to imagine that all of the food and shelter providers in southern Nevada together could claim to have received an amount comparable to the $240 million the Nevada Cancer Institute received over its lifetime since it got its tax exemption in 2002.

They probably never had fundraisers like the institute's – like the ones hosted by Eva Longoria, Larry King, and Sammy Hagar. They never had quite the kind of support that the institute got from politicians such as Senator Harry Reid and Congresswoman Shelley Berkley, who funneled 8-figure grants and Bureau of Land Management real estate transfers. Sometimes, the “impact of the recession” explanation just doesn't ring totally true.—Rick Cohen