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Reprinted from Frontiers of Health Services Management, Volume 24, Number 4


(Health Administration Press 2008)

The Maturing Role of Philanthropy in


Healthcare

B Y W ILLIAM C. M C G INLY, P H D, CAE

Summ a ry • Hospital and healthcare system executives today face myriad


issues that revolve around finances. Aging infrastructure must be replaced and
staffing shortages addressed while pursuing costly advances in treatments and
technology. Higher operating expenses, especially those resulting from care of
under- and uninsured patients, continue unabated, while the adequacy of reim-
bursement from private and third-party sources, including Medicare and Med-
icaid, continues to lag. Complicating matters are concerns—and their
associated costs—about patient privacy, changing relationships with physi-
cians, and the need to provide and demonstrate community benefit (Costa
2005). Philanthropic giving is emerging as a significant means by which health
systems can enhance financial resources when those in leadership positions
foster a culture of philanthropy.

F E A T U R E

William C. McGinly, PhD, CAE, is president and chief executive officer of the
Association for Healthcare Philanthropy, Falls Church, Virginia.

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Factors Driving the Samaritan to support a new cardiac


Importance of Philanthropy: surgery center and $100,000 to Nyack
Two Case Studies Hospital to purchase digital mammogra-
Nyack Hospital and Good Samaritan Hos- phy equipment. The newspaper quoted
pital, located about a dozen miles from Union State Bank’s vice president for
each other in New York, worried when municipal affairs as saying, “This is the
locally based Union State Bank was sold community we live in and the commu-
to Key Bank in 2007. The two hospitals, nity we make our money in. We always
which each have approximately 370 beds, felt it made good business sense to
were faced with the loss of a longtime invest in the community”(Lerner 2007).
benefactor, U.S.B. Foundation, Inc., the Would Key Bank, with branches
charity arm of Union State Bank. throughout the Hudson Valley, be willing
Over the years, Nyack, a member of to maintain these relationships? Would its
the New York–Presbyterian Healthcare foundation be as generous to healthcare
System, and Good Samari- institutions?
“This is the community tan, part of the Bon Secours Good Samaritan’s director assured the
Charity Health System, had Journal News medical writer that he had
we live in and the
received generous dona- already been in contact with Key Bank
community we make our tions from the foundation. officials and was “looking forward to
money in. We always felt it While Key Bank, based in enhancing that relationship.” An AHP
made good business sense Cleveland, Ohio, also oper- official, interviewed by the same reporter,
ates a foundation for phil- made the glass-half-full observation that
to invest in the anthropic purposes and has “(i)f the new corporation is bigger, there
community.” provided support for hospi- could be more dollars available for philan-
tals and other health-related thropy,” while cautioning that “the deci-
causes, its primary focus is on grants that sion-making process isn’t totally local
foster workforce development and finan- anymore”(Lerner 2007).
cial education programs (Key Bank 2007). Meanwhile the hospital, seeking to
The experiences of Nyack and Good upgrade its emergency department, was
Samaritan serve to illustrate several fac- also promoting an offer by a wealthy area
tors that are driving the importance of resident to match major donations of at
philanthropy for nonprofit hospitals and least $10,000 in appreciation for the out-
healthcare systems, as well as the efficacy standing performance of Good Samaritan
of building a culture of philanthropy emergency room staff in saving his wife
within an institution and its surrounding after she suffered a brain aneurysm
community. (Lerner 2007). Clearly, Good Samaritan
The first factor is the high cost associ- was not about to “put all its eggs in one
ated with upgrading hospital infrastructure, basket.”
including expensive new technologies. A Rising expectations among the public
Westchester Journal News report pub- that they and their family members deserve
lished several weeks prior to the comple- and will receive healthcare services of the
tion of Union State Bank’s sale to Key highest quality constitutes a second factor
Bank noted that the U.S.B. Foundation that tends to heighten interest in philan-
had recently given $500,000 to Good thropic giving, because of the pressures

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placed on health systems to invest heavily mammography units, endoscopic ultra-


and continually in upgrading their facili- sound equipment, laparoscopic instru-
ties, equipment, and procedures to keep mentation sets, and renovations to the
their healthcare programs as up-to-date oncology inpatient unit (Kaliff 2007).
and as appealing as possible (Cauchon A third reason behind increased interest
2006). in developing philanthropic sources of income
Nyack Hospital, for example, provides for nonprofit hospitals is the financial burden
a wide range of services to patients, placed upon hospitals by uncompensated
including addiction/recovery programs, a costs and inadequate reimbursements by
breast center, cardiology, a cancer center, Medicare and Medicaid, which account for
the Edythe Kurz Center for Sleep Medi- more than half of all care provided by hos-
cine, the Herbert and Edythe Kurz Pedi- pitals. For a great many hospitals, reim-
atric Emergency Room and other bursements from all sources are
emergency services, home care, a joint insufficient to meet the costs of providing
replacement center, maternity, a medical care, let alone support capital projects and
library, pain management, pediatrics, community benefit programs, cover
radiology services, respiratory care, a uncompensated care, or fund teaching
stroke center, support groups, therapy and and research obligations. The American
rehabilitation, and a wound care center Hospital Association reports that its
(Nyack Hospital 2007). Good Samaritan’s annual survey indicates that “(i)n 2006,
offerings are similarly comprehensive, 64 percent of hospitals received Medicare
including a birthing center; the Bobbi payment less than cost, while 76 percent
Lewis Cancer Program; the Frank and of hospitals received Medicaid payments
Fannie Weiss Renal Dialysis Center, a less than cost,” and “(c)ombined
regional kidney center in nearby Harri- (Medicare and Medicaid) underpayments
man, New York; and a women’s health rose from $4.0 billion in 2000 to nearly

F E A T U R E
center, to name just a few (Bon Secours $30 billion in 2006.” During that same
Charity Health System 2006). period, uncompensated costs rose from
As evidence of Union State Bank’s $21.6 billion to $31.2 billion (American
prior largess, both Nyack Hospital’s can- Hospital Association 2007a).
cer center and Good Samaritan’s birthing Fewer than two-fifths of hospitals in
center are named after the bank. The hos- the United States responding to a 2005
pitals may miss Union State Bank’s reli- survey reported a positive bottom line
able generosity as they pursue the greater than 4 percent, a level that enables
resources to improve or expand facilities. them to reinvest profits in their enter-
Good Samaritan, for example, is in the prise. The rest made too little to reinvest:
midst of an $8.5 million campaign aimed 29 percent eked out positive bottom lines
at expanding emergency and cardiac ser- of 3 percent or less; 14 percent of hospitals
vices, Phase 2 of which has a goal of rais- reported just breaking even; and 19 per-
ing an additional $2.5 million to fund an cent operated in the red (Deloitte &
electrophysiology study lab (Bon Secours Touche 2006). It also is important to
Charity Health System 2006). At Nyack point out that hospitals that lose a reliable
Hospital, donations in the spring of 2007 bottom-line source of philanthropic
were being sought to purchase two digital income also run the risk of having to pay
(continued on page 15)

William C. McGinly • 13
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AHP Survey Shows Fundraising represented 49.4 percent of the U.S. total
Growth Slowing and 71.2 percent of the Canadian total in
fiscal 2006. In both countries, the next
For 23 years, the Association for Healthcare
largest source of philanthropic revenue
Philanthropy (AHP) has tracked funds
was interest on investments (21.9 per-
raised and fundraising expenditures in the
cent in the United States and 17.0 per-
dynamic healthcare environment. Estab-
cent in Canada). Other important
lished in 1967, AHP is a not-for-profit orga-
sources were endowments (5.0 percent
nization whose more than 4,600 members
in the United States, 7.6 percent in
direct philanthropic programs in 2,200 of
Canada), and grants (4.2 percent and 1.6
North America’s not-for-profit hospitals
percent). A miscellaneous “other” cate-
and healthcare systems.
gory accounted for 19.6 percent of rev-
AHP’s most recently published Annual
enue from giving in the United States,
Report on Giving is for the 2006 fiscal year
but only 2.6 percent in Canada.
and was based on a survey of the 1,199
U.S. institutions and 182 in Canada
• The vast majority of donors were individ-
(responses were received from 291 U.S.
uals, rather than corporations or founda-
and 44 Canadian hospitals). The results of
tions, and collectively they gave the most
the survey exemplify key roles philanthropy
as well. In the United States, 85.8 percent
is capable of playing as a means of coping
of donors were individuals, approxi-
with financial challenges facing nonprofit
mately half of whom were hospital board
healthcare systems.
members, physicians, staff, or patients.
Individuals’ generosity accounted for 59.5
What the data say
percent of total funds raised. A similar
Total funds raised through philanthropy by
pattern was evident in Canada, where
healthcare institutions in the United States
87.1 percent of donors were individuals,
increased 11.5 percent over fiscal year 2005
raising 52.2 percent of total donations.
levels, totaling $5.897 billion in cash and
However, only about one-fifth of individ-
another $2 billion in pledges. This was a
ual Canadian donors were patients,
significant decline in the rate of growth of
physicians, staff, or board members. The
giving when compared to the 16 percent
proportion of total giving that originated
growth rate reached in fiscal year 2005, a
from individual donors was about the
trend that is likely to be of considerable
same in 2006 and 2005 in the United
concern to fundraisers if the U.S. economy
States; however in Canada, it went down
continues a slowdown that began last year
9 percentage points in 2006 from the
(Abelson 2007). Cash and pledges raised
2005 level of 61 percent.
by Canadian healthcare institutions in FY
2006 totaled $1.227 billion, just 3.3 percent
• About one-fifth of philanthropic funds to
higher than the previous fiscal year, when
nonprofit hospitals and healthcare sys-
donations increased 11 percent.
tems in the United States were con-
tributed by business, including corporate
• Cash contributions were the largest sin-
foundations, increasing to 20.4 percent
gle source of philanthropic revenue. Cash
in 2006, up from 18.2 percent in 2005.

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Non-corporate foundations provided 12 funds raised in the United States and 31.8
percent of funds raised in 2006, down percent in Canada. In terms of return on
less than a percentage point from the investment, at least in the short run,
earlier year. Other giving sources in the annual giving and special events tended
United States, such as hospital auxil- to be more expensive to run than the cul-
iaries, public agencies, and civic groups, tivation of major gifts or capital cam-
were responsible for 8.1 percent of the paigns. However, annual giving and
2006 total, down almost 2 percentage special events also serve important ancil-
points from 2005. lary purposes, such as the acquisition of
new donors and volunteers and new
• In Canada, the Report of Giving indicated business contacts, increasing public
that businesses and their foundations exposure, and improving community
supplied more than one-quarter (25.4 relations (AHP 2006).
percent) of the 2006 total, about the
same as in 2005, while non-corporate • In 2006, philanthropic funds in the United
foundations contributed 9.7 percent in States were primarily allocated to pay for
2006, up from 3.5 percent in 2005. The construction and renovation costs (31.8
“other sources” category of givers in percent), new equipment (21.8 percent),
Canada accounted for approximately 13 and community benefit programs (11.7 per-
percent of the 2006 total. It was about 10 cent) (AHP 2007). In Canada, the top three
percent of the total in 2005. allocation categories were the same; how-
ever, construction and renovation received
• Fundraising endeavors may be classified just 22.5 percent of the philanthropic funds.
into the general categories of annual giv- Community benefit programs received 7.7
ing, major (or capital) giving, and planned percent, and new equipment purchases

F E A T U R E
giving (AHP 2006). In 2006, capital cam- accounted for fully 55.1 percent (AHP
paigns, annual giving, major giving, and 2007). The portion of funds allocated to
special events, which are considered a general hospital operations in the United
subset of annual giving, topped the list as States (10.4 percent) was more than twice
the activities that returned the largest that in Canada (4.4 percent), but Canadian
donations in the United States and research and teaching programs received a
Canada (AHP 2007). In both countries, somewhat larger share of philanthropic
capital campaigns were the largest single resources than those in the United States
source of donations, with 21 percent of (6.3 percent vs. 4.8 percent).

higher interest rates for borrowing, source of income for not-for-profit hospitals
should they decide to turn to lending and healthcare systems (Hall 2005). Dona-
institutions to help fund capital projects tions and grants from grateful patients and
or cover operating expenses. their families; from members of the com-
Of necessity, then, hospital managers munity, businesses, corporate and non-cor-
are coming to the realization that philan- porate foundations; as well as federal, state,
thropy must be regarded as an important and local government agencies help close

William C. McGinly • 15
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the budget gap and help today’s healthcare and planned giving (Association for
organizations deal with the financial chal- Healthcare Philanthropy 2007c).
lenges confronting them (Association for Capital campaigns, mainstays of
Healthcare Philanthropy 2006). fundraising for specific, usually long-
Return on investment (ROI) from a term projects, require extensive plan-
well-run philanthropic foundation pro- ning and can involve high
gram is often much higher implementation and follow-up costs.
Return on investment
than that which can be Health services managers, who are
from a well-run achieved by a hospital’s increasingly being drawn into the fore-
philanthropic foundation standard services. Operat- front of philanthropic fundraising
program is often much ing margin percentages for endeavors, need to be aware of these
a hospital foundation can facts.
higher than that which be several orders of magni- Veteran fundraiser James M. Green-
can be achieved by a tude higher than those of field postulated a three-part “pyramid of
hospital’s standard services. the hospital itself (Costa giving.” In this pyramid, annual giving
2005, 17–19). A dollar —including such activities as special
raised through philanthropy contributes events, direct mail, and membership
just as much to the total organization’s associations—is at the base, serving as a
bottom line as a dollar generated by pro- foundation for higher levels of philan-
viding the range of medical, surgical, thropy. In the pyramid’s mid-section is
diagnostic, rehabilitative, and related major giving from individuals, corpora-
healthcare services that constitute its core tions, and foundations, as well as endow-
mission (Greenfield 2005, 83–84). ments, capital campaigns, and special
campaigns. At the apex is estate or
The Pyramid of Philanthropy planned giving, including bequests and
All methods of seeking donations, how- planned gifts (Greenfield 1991).
ever, are not created equal. Research by Besides the advancing dollar size of
the Association for Healthcare Philan- the average gift progressing through each
thropy and the experience of generations of the pyramid’s sectors, the three stages
of fundraisers for a wide range of not- also represent developmental phases in a
for-profit organizations and causes indi- nonprofit’s relationships with its donors.
cate conclusively that productivity varies The smallest, although most numerous,
widely among the activities employed to gifts are those obtained via annual giving
raise money through philanthropy (Sey- appeals from individuals responding to
mour 1966). door-to-door, direct mail, Internet, or
Seen through the prism of ROI, telethon efforts; paying to attend a bene-
which measures the effectiveness of a fit; joining a membership association; or
fundraising endeavor, or cost-to-raise-a- giving through a volunteer/auxiliary activ-
dollar, a measure of efficiency, such tradi- ity. While relatively expensive to carry out,
tional but expensive-to-run special events these activities raise funds and can yield
as golf tournaments, benefits, charity vital initial contacts for the organizations
balls, and telethons, often quickly reach a or causes they support.
point of diminishing returns compared Participation at the annual giving level
to efforts put into obtaining major gifts is a general indication that contributors are

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aware of and informed about the institu- range from single-person shops (many
tion or cause to which they are donating including public relations functions) to
and have identified it as deserving of sup- associated foundations with development
port. Further, when regular and faithful, offices, specialized staff members, and
their participation demonstrates that the leadership provided by a chief develop-
organization has earned community sup- ment officer. In a large healthcare system,
port, which is an important consideration each affiliated hospital or facility may have
for developing the confidence of major its own fundraising staff with varying
donors that their donations will serve a degrees of autonomy in relation to a cen-
worthwhile purpose (Association for tral office with overall responsibilities for
Healthcare Philanthropy 2006). coordinating philanthropic activities. The
By far, however, major gifts of chief development officer (CDO) may
$10,000 or more and planned giving yield answer to the chair of a foundation’s
the most productive returns for fundrais- board of directors, to the chair of the hos-
ing efforts (Association for Healthcare pital’s board development committee, or
Philanthropy 2007d). At these levels, directly to the organization’s CEO (Associ-
Greenfield (1991) postulates, donors’ ation for Healthcare Philanthropy 2006).
interest and involvement have developed There are a number of variations on
sufficiently to motivate significant gen- these themes, but the basic goal of develop-
erosity toward the cause or organization ment efforts is to achieve effective and effi-
they are supporting. This includes captur- cient philanthropic fundraising by
ing the attention and support of busi- climbing the pyramid of philanthropy so as
nesses, foundations, and funding to positively and significantly sustain a hos-
agencies of various levels of government. pital’s or healthcare system’s ability to fulfill
At the highest level of his pyramid, its mission to the community it serves.
Greenfield characterizes willingness to Success at this endeavor calls for the cre-

F E A T U R E
make a planned giving commitment as ation and maintenance of a culture of phil-
the “investment” level of philanthropy anthropy (Hubbell and Reinders 2007;
(Greenfield 1991). The relatively high dol- Hall 2005; Hook and Mapp 2005), a term
lar amounts produced through major gifts that has been aptly described by philan-
and planned giving tend to boost the cal- thropy expert Simone P. Joyaux as follows:
culation of ROI and reduce their cost-to- “This means that everyone in the organi-
raise-a-dollar score. However, these zation…from the janitor to the president
measures, if focused solely on annual per- of the board…understands that philan-
formance, may not fully take into account thropy and fund development are critical
the longer cycle in terms of expenditures to the organizational health AND that
of fundraising time and resources usually each individual (both the janitor and the
needed to achieve these higher levels of board president) has a role in the process”
giving (McGinly 2007). (Joyaux 2007).
Indeed, in their analysis of the
A ‘Culture’ of Philanthropy lessons that hospital fundraisers can dis-
Organizational frameworks through cern by applying benchmarking tech-
which nonprofit hospitals and healthcare niques to their endeavors, Hubbell and
systems administer their giving programs Reinders (2007, 17) conclude, “regardless

William C. McGinly • 17
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of performance in other areas, there was thering philanthropic giving. In a system


no greater predictor of success (in where a culture of philanthropy prevails,
fundraising) than the presence of a sys- they understand they must be willing to
tem-wide culture that actively promoted work with development staff to cultivate
philanthropy.” donors while protecting the physi-
CEOs have the ability to set the tone cian–patient relationship (Hook and
for the overall organization through their Mapp 2005).
oversight, influence, and contacts with Hospital administrators and physicians
board members, physicians, staff, patients, must take into account patient privacy con-
individual donors and donor institutions, cerns and regulatory requirements under
and the community at large. It is upon the federal Health Insurance Portability
their shoulders that responsibility primar- and Accountability Act (HIPAA) without
ily falls to foster and maintain the philan- imposing unnecessarily restrictive limits
thropic culture (Hall 2005). (Note, for on interaction with grateful patients and
example, the proactive steps taken by Good their families who may become sources of
Samaritan Hospital’s director to establish a philanthropic giving. The Office for Civil
working relationship with Key Bank’s foun- Rights of the U.S. Department of Health
dation even before the sale of Union State and Human Services has assured the Asso-
Bank was finalized.) If the CEO is success- ciation for Healthcare Philanthropy that it
ful in promoting such top-to-bottom and has received an infinitesimal number of
bottom-to-top engagement, a strong foun- complaints under HIPAA “in the context
dation can be set not only for the develop- of fundraising efforts” (Association for
ment office’s day-to-day operations but also Healthcare Philanthropy 2007e).
for the acceptance by internal stakeholders
and the external community of the proposi- Beyond the Hospital
tion “that the hospital is a The concept of building a culture of phil-
CEOs, boards of directors, charitable enterprise worthy anthropy extends beyond the hospital’s
and physicians are of philanthropic support” walls into the larger community. Exter-
recognizing the need to (Hall 2005). nal partnerships constitute an important
The CEO, however, element in achieving high fundraising
involve their philanthropic needs the backing of a performance (Hubbell and Reinders
foundation and board of directors that is 2007). Outreach and community benefit
development office at the equally aware of its respon- programs serve a philanthropic purpose
sibilities to foster a success- as they sustain and reinforce relation-
earliest stages of the ful fundraising program. ships with people and organizations
organization’s core strate- Board members are often devoted to providing access to health-
gic planning process. donors themselves, and care, meeting the needs of low-income
they should be willing persons, and improving overall commu-
spokespersons to and vital contact points nity health conditions. Buy-in and sup-
with the donor community. port by hospital professional staff,
So, too, physicians and other health- support staff, and physicians are vital to
care providers affiliated with the hospital the success of such efforts, and so they,
must be convinced and educated about too, require the time and attention of the
their obligations toward the task of fur- institution’s executive leadership to

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ensure effective collaboration with com- board room as equal partners with the
munity partners (Catholic Health Associ- medical, operational, and financial leader-
ation 2006). ship. It places responsibility on the CDO
and the development staff to adapt to the
Philanthropy at the Core expectations of business-oriented financial
Fundraising has thus become essential to officials and board members to adopt
the well-being of the nonprofit healthcare accepted accounting practices and embrace
establishment. Decision makers can ill evaluative techniques that will make the
afford to relegate it to the periphery of case for and deliver greater return on
their concerns. To an increasing extent, investment (Greenfield 2005; Smith 2005).
CEOs, boards of directors, and physicians For example, the Financial Accounting
are recognizing the need to involve their Standards Board requires that not-for-profit
philanthropic foundation and develop- organizations classify gifts as unrestricted,
ment office at the earliest stages of the as having a temporary restriction, or as
organization’s core strategic planning having a permanent restriction. Unre-
process, and to provide foundation stricted gifts may be used by the hospital or
boards, development staffs, and chief healthcare system as it sees fit. This is
development officers a more active voice often the case with money raised through
in setting priorities for developmental annual fund drives. A temporary restric-
projects that will be pursued and deciding tion limits use of funds to a specific project
how resources will be allocated and what or purpose designated by the donor. A per-
fundraising techniques will be used manent restriction, or endowment, pre-
(McGinly 2007). vents spending the contribution itself, but
The days of the development office its income may be used, either on a
being limited to charity balls or an annual restricted or unrestricted basis, depending
direct mail appeal are fast receding, as on the donor’s wishes. Integration of

F E A T U R E
CEOs and boards gain sophistication and fundraising projections into a healthcare
understanding about the importance of system’s budgeting process must take heed
major gifts, planned giving, and the plan- of these types of restrictions. They will
ning and execution of capital campaigns. affect the nature and range of fundraising
Indeed, selecting a CDO with the “right activities to be pursued to meet the institu-
stuff” to get the development job done for tion’s long-term and short-term needs.
a particular hospital or healthcare system (Costa 2005).
has become a major personnel issue
involving consideration of skills, important Benchmarking
relationships that must be cultivated, and Some 50 member institutions of the Asso-
compensation, as well as the definition of ciation for Healthcare Philanthropy take
responsibilities, opportunities, and chal- part in the AHP Performance Benchmark-
lenges facing candidates (Freeman 2005). ing Service, contributing information into
Such organizational evolution with an integrated database of business prac-
respect to furthering philanthropy means tices and performance metrics whose pur-
that fundraising programs must be held to pose is to improve the performance of
high standards of accountability and trans- philanthropic healthcare fundraising.
parency if they are to earn their seats in the Participating nonprofit hospitals and

William C. McGinly • 19
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healthcare systems gain the ability to ana- been made to eliminate the deductibility
lyze and compare their fundraising efforts of donations made to nonprofit hospitals
with those of other facilities or in the unless they meet required minimum
aggregate, enabling them to exchange and numbers of uncompensated charity cases
adopt best practices to encourage effective or percentages of expenses attributable to
and efficient philanthropic techniques. charity care (Kane 2006).
The benchmarking service is based Exacerbating the problem is a percep-
upon meticulously developed, systematic tion that at least some nonprofit hospitals
data-gathering techniques and standard use overly aggressive practices to collect
definitions of terms designed to alleviate payments from low-income patients
the difficulties of gauging one system’s (American Hospital Association 2007;
practices against another’s. It consistently Chern 2005; Wunder 2007). The result is a
measures results of philanthropic pro- diminishing of the ability of nonprofit hos-
grams in terms of net fundraising pitals and healthcare systems to maintain
Treat your institution’s returns: the difference the public trust and confidence necessary
between gross returns and to cultivate individual donors, businesses,
fundraising foundation as fundraising expenses, and foundations to provide support
a profit center worthy of including human resources through philanthropy (Greenfield 2005).
appropriate resources that and operation expenses Adding to these challenges are
directly related to fundrais- longer term trends that “bode poorly for
yield high net returns and ing activity. Analyses based hospital philanthropy” (Hubbell 2005).
balanced efficiency. on such benchmarking data These include generational differences
enable CDOs to discern in attitudes and expectations toward
best practices, recognize approaching philanthropy in general and giving in
points of diminishing returns, and pre- support of healthcare institutions in par-
sent a more coherent and compelling case ticular, as well as observed declines in
to financial staff and directors when seek- volunteerism and weakening civic
ing budgetary resources for the fundrais- engagement.
ing enterprise (Association for Healthcare These challenges, however, also pre-
Philanthropy 2007c). sent opportunities for executives of hospi-
tals and healthcare systems who have
Challenges grasped their central role in promoting
An array of external challenges now con- philanthropic fundraising by working
fronts healthcare philanthropy. Several closely with the CDOs to encourage their
arise from basic misunderstandings leadership in organizational planning and
among political leaders, advocacy groups, by providing the resources needed to ade-
and the general public about differences quately support fundraising activities and
between nonprofit and for-profit health- increase dollars raised. Those who wish to
care delivery systems. Uncertainty over succeed in this effort should keep the fol-
the bases for billing practices, criteria for lowing in mind:
the provision of charity care, and the defi-
nition of community benefit contributes It takes money to make money. Treat your
to a questioning of the tax-exempt status institution’s fundraising foundation as a
of nonprofit hospitals. Proposals have profit center worthy of appropriate

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resources that yield high net returns and The author would like to thank Al Bel-
balanced efficiency. sky, public affairs consultant, and Kathy
Renzetti, vice president, membership, com-
Be patient, plan, and execute. Concentrate munications, and government relations at
on major gifts from individuals, corpora- the Association for Healthcare Philanthropy
tions, foundations, and public sources. for their contributions to this article.
These yield the best production, especially
when campaigns provide stimuli for References
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