The Northwest Tissue Services has always been a nonprofit organization accountable to a community board that monitors how it is succeeding in the mission to provide fair and equal access to tissue.

“That’s how we were established 14 years ago, and it’s how we’ve always operated,” says Moogk. “We are not responsible to deliver a profit to shareholders, as some tissue banks are.

“Federal law dictates that we are not to sell tissue for profit. For-profits who distribute tissue respond that 501(c)(3) is only a tax status. But, it’s a status that’s conferred by a requirement to focus on a charitable mission, not on a bottom-line profit.”

Some states allow tissue banks to incorporate as nonprofit organizations without major restrictions on ownership. They do not fill out a Form 990 disclosing their finances. A for-profit company can provide the start-up funding and appoint board members. These organizations do not apply for or receive federal nonprofit tax status.

“We have no shareholders,
we are operated for the benefit of the
community, and all proceeds are
reinvested in the Tissue Services.”

These tissue banks are often spin-offs of for-profit groups. The community they serve may be unaware of their origins or how they function, because they do not have the same level of accountability as a nonprofit tissue bank with a 501(c)(3) tax status.

A 12- to 15-member board has always overseen the Tissue Services. “Our board has always been very attentive,” says Moogk, “and remains deeply committed to serving the community. We have no shareholders, we are operated for the benefit of the community, and all proceeds are reinvested in the Tissue Services.”

Reasonable fees
Reporting in the media often does not take into account the high but necessary expenses of technology in tissue banking, for which even nonprofits must charge commensurate fees. Even the most basic functions—like cryopreservation, and validating and maintaining the cleanrooms in which procurement and processing take place—add up to significant cost.

“We need to raise awareness among everyone involved from donor to recipient of the very legitimate reasons for fees in nonprofit tissue banking,” explains Moogk. “Americans know enough about the cost of new technologies to understand that new approaches and therapies require significant research and development and are usually more expensive than the old standard.”

Regulatory oversight
Another area of confusion raised in media coverage involves regulatory oversight for nonprofit and for-profits alike.

Many reports minimized or discounted the roles of the FDA and of AATB in establishing safe practices for the field by setting standards, conducting audits and accrediting tissue banks. AATB was founded in 1976 as a scientific, peer group organization and since 1984 has published the only standards for tissue banking, which are the recognized authoritative source for the field. Tissue banks who demonstrate their compliance with those standards can apply for and receive AATB accreditation.

The FDA has provided increasing levels of oversight since 1993 and is expected to implement a comprehensive final rule next year, covering many aspects of tissue banking, from facility registration to donor suitability, procurement and processing to tracking and storage. The FDA’s rule encompasses many aspects of tissue banking already addressed by existing AATB standards.

Roles for for-profits?
Many important advances in transplant medicine have been and will continue to be made by for-profit companies. They fund research and development that reduces surgery times, improves healing rates and reduces the percentage of repeat procedures. Appropriate partnerships between for-profits and nonprofits—assuring that both parties respect donors and the mission of fair and equal access to their gifts for patients—can make these technological advances available without jeopardizing society’s support for donation.