Healthcare institutions are under enormous financial pressure these days, and the pressure is not likely to let up any time soon. From rising costs to declining reimbursement rates and public funding, medical institutions are feeling the stress. That’s especially true of community hospitals, rural hospitals and health centers, and research institutions.
As a result, philanthropy is playing a greater and greater role not just in funding large capital investments, research initiatives, and specialized equipment purchases, but sometimes even day-to-day operations.
To meet this increasingly challenging future, philanthropy executives and fundraisers working in healthcare need to excel in several key areas:
1) Think like a healthcare executive: As put by Mike Delzotti, President & COO of the Huntsman Cancer Foundation, in our last Q&A: “Are you simply a fundraiser, or a leader who fundraises?” Philanthropy executives need to be leaders in their institutions, at the forefront of big conversations about strategy and funding.
Part of that is “learning to speak CFO,” as Mike put it. On one hand, making a meaningful contribution to financial conversations, in terms of realistic philanthropic goals; on the other hand, acquiring enough knowledge about the institution’s budget so that you can prioritize budget-relieving projects and present those priorities to donors.
One of the more satisfying solicitations of my career was when a donor gave nearly $1 million to purchase 24 new, top-of-the-line ICU beds at a community hospital. On a tour of the ICU, she beamed as nurses flocked over to shake her hand and say thank you. She could see her gift making a difference and knew it would continue to do so for years and years. But the strategic power of that gift was in matching her desire for direct patient impact with a big line item on the CEO’s budget—freeing up those million dollars to go to other pressing needs.
In our last Q&A, Laurie Kelly, Senior Vice President and Chief Philanthropy Officer at Providence Health & Services, pointed out that her organization just built two brand new emergency rooms at a cost of $90 million, entirely funded by philanthropy. Now, we won’t all be bringing in funds at that level, but just as every gift counts, every line item in the budget counts, whether it’s 24 ICU beds or two new emergency rooms.
The point is: as institutional leaders, we have to see the big picture and think like healthcare executives if we’re going to maximize the positive impact of philanthropic gifts for our institutions.
2) Get your executives to think like fundraisers: The flip side of that gift was having the CEO in one of the solicitation meetings, in which he saw first-hand the donor’s passion for the institution and its mission. Afterward, he said, “Wow, I never realized… I get it now.” It’s our role to educate our peers in leadership about the power of philanthropy, not just in terms of dollars raised, but in terms of relationships and the deep meaning that philanthropy has for donors. That’s how we begin to create allies and advocates across institutional leadership, so that when they think of tapping philanthropy for financial support, they understand the full breadth of what they’re asking for, what it takes to deliver, and how they can help.
3) Advocate for resources for philanthropy: Healthcare institutions are unique from many other nonprofits in that they are dealing with people’s lives. So, in times of financial stress, healthcare institutions often look to cut non-medical costs first, including philanthropy. But we are likely the highest ROI department at any institution, with an industry-standard ratio of raising $5 for every $1 invested in philanthropy—and with major gifts teams, that ratio can be 10:1 or even 100:1.
So, even while all organizations (both for-profit and nonprofit) are trying to do more with less, it’s important to educate leadership on the fact that we need adequate resources to meet the increasingly aggressive goals being set for the fundraising team. Philanthropy is a key relationship-building arm of the institution, and a lack of resources risks mistakes, turnover, and burnout, all of which can compromise the important donor relationship we’ve been tasked with building—often with people who are patients or families of patients.
4) Make the most of your events: Events are a big focus for healthcare philanthropy, but in a time of cost containment, we need to be more strategic about why and how we do events. We cannot just do events for the sake of it:
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First, be realistic about the cost and potential revenue.
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Second, be strategic about follow-up and cultivation; all too often, there is little to no effort made to connect with attendees after a big event to continue the fundraising conversation, but many times, people who attend events and give at those events have more capacity. Events are the beginning of a conversation, not the end of the conversation until the same event next year. Especially for big events like an annual gala, the opportunity to touch potentially hundreds of new donors is a big part of the value of holding such an event.
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Third, leverage smaller events, like “salon” events hosted by a Board member, a big donor, or a grateful patient. These are opportunities to invite your highest capacity donors to events that are more personal and potentially more meaningful than a big gala. Be sure to include physicians and researchers—those who touch patients’ lives—to make the message more tangible and compelling.
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Fourth, engage with the community for community fundraising. Yes, the large donations move the needle quicker, but investing time and providing fundraising tools to community members who have a strong passion for the mission allows the community to express their gratitude. Their donations might not be in the millions, but we should not deny them that opportunity, given that this can be part of their healing process, because in a time of increasing financial pressure, every gift counts.
5) Smaller institutions will need to get creative: Smaller healthcare institutions often face much higher levels of financial stress compared to their bigger counterparts. That is especially true for community hospitals in areas where there is less wealth. So, one must first have realistic goals based on the financial capacity of the community.
It also requires getting creative—for example, going outside your catchment area to find potential donors. In the example above about the ICU beds, that donor was not in our immediate catchment area, but her husband had been taken to our medical center by ambulance in an emergency. The care he received had so impressed her that she was passionate about helping the institution.
You can also be creative with allies. At one institution I worked at, I had special cards made up (different from a business card) that doctors and nurses could give out to patients or their families in the event someone expressed an interest in giving. And I educated caregivers on what to listen for in conversations that might indicate an inclination to give.
In another example, I teamed up with the hospital’s marketing director to increase awareness and attract support for our Level II Trauma Center. We created an immersive simulation of a community-based trauma event to educate potential donors about the exceptional care that a Level II unit provides, as well as build appreciation for its presence in the community. The event brought both donations and positive news coverage to the institution. We used funds from both departments to spread the cost and ultimately got results that contributed to meeting the goals of both departments.
The point is that at smaller institutions, you will need to be scrappy, wear many hats, think outside the box, and color outside the lines in order to compete with larger institutions.
6) Learn to work with centralized resources: As hospitals merge or get bought and health systems stretch over bigger geographic areas, philanthropy teams will be working more and more with centralized resources like marketing, events, PR, communications, and technology. That can create competition among different local hospitals and institutions to get enough support from the system for their individual needs. Fundraising success will depend on fundraisers’ skill in navigating relationships with those centralized support teams.
7) Build solid relationships with physicians and caregivers: This is probably the biggest and most important skill for healthcare fundraisers—for a number of reasons.
First, caregivers are the gateway to grateful patients and their families, and they will not refer potential donors to your office if they don’t know you and don’t trust you. Establishing strong, reliable, trusting relationships with physicians and nurses is the first and most critical step in effective healthcare fundraising.
To do that, you have to walk the floors. I spent many days, nights, weekends, and holidays walking the floors at every institution I worked at. I took nurses out to lunch. I brought tchotchkes to the floors. I chatted with doctors in the hallways and was invited to the physicians’ lunchroom. I went to their department meetings, not as an observer, but as a participant.
I spent a lot of my time where they spent their time. They could see and feel the care I put into just showing up, advocating for philanthropy, and talking to them about how a partnership with philanthropy could support their work. The trust I gained went a long way toward instilling confidence that their patients would be handled with care and compassion by the office of philanthropy.
Second, when you successfully partner with a caregiver on a gift, that news will organically spread throughout the institution. Pick a few receptive physicians, show them the power of what philanthropy can do, and soon you will be fielding calls from others wanting the same results for their projects and service lines. You will hopefully have a wealth of advocates and allies across the organization who can speak about philanthropy and refer potential donors your way.
(One important caveat here: if a caregiver makes a successful donor connection for you, they should hear about the secured gift from you first, not from the grapevine; if you fail to follow up and the referring caregiver hears it from someone else, they may feel taken for granted and less likely to make future referrals.)
Third, employee giving is a key metric that grantors look at when providing a grant. Even if employees don’t give in big amounts, overall participation rates matter a great deal. The higher your employee participation, the more it improves the chances of receiving grant funds.
Fourth, physician giving can be an important source of philanthropy—especially as more physician groups get rolled up into larger groups. Those groups often have corporate giving programs, and their own institution should be on that list. Physician allies can advocate for philanthropy with other physicians, and friendly competition among groups often ups the ante in terms of their giving.
Fifth, good relationships with physicians open the door to recruiting physicians to the Board. That can be a powerful way to educate other Board members, who are often big donors, about the impact of philanthropy on the healthcare mission of the institution.
Finally, when your “medical” knowledge runs out, you’ll need to call in the experts. These days, donors often have specific funding preferences and want to dig into details that may be beyond your level of expertise. If that’s the case, you’ll want a friendly caregiver or researcher who’s well-versed in the philanthropy effort at your side for those meetings.
Trying to think about the “future of healthcare philanthropy” in fraught times such as these can feel overwhelming. The key to moving forward is staying true to the mission of the organization and its impact on the communities it serves. Walking the halls, talking to caregivers and researchers, and seeing their work can help keep you grounded. Then just stay focused on the practical demands of the job: think like an executive, advocate for philanthropy, win allies, and don’t be afraid to get creative. The work is essential, and all of our lives depend upon it.
Contributing author:
Steven Wallace, Managing Director and Senior Vice President of Stewardship & Strategic Partnerships, Aspen Leadership Group
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NEXT UP on July 15: ALG Managing Director Tom Jennings will moderate a panel discussion on the future of higher education philanthropy, featuring Amy Yancey, President and CEO of the UConn Foundation, and Sergio Gonzalez, Senior Vice President for University Advancement at Brown University.
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