Posted on August 31st, 2009 | No Comments »
In August, I attended the latest town hall meeting on health care reform hosted by my employer, Community Health Network (watch a replay of the town hall meeting at http://townhall.ecommunity.com). While I walked away with more questions than answers, I realized I was probably not alone in this respect, as many of the details of the plan are not yet settled. However, this opportunity offered me a chance to reflect on how philanthropy within health care may be affected by reform and what to do about it.
Hospitals need to dust off their “case for support,” and make sure it demonstrates the impact a donor’s gift will have on meeting important needs. Health care fundraising is facing a potential double whammy with not only impending reform but also a proposed reduction in charitable deductions for wealthy Americans. While experts disagree about the magnitude the proposed legislation will have on giving, almost all agree there will be some decline in giving among the nation’s wealthiest individuals. It is more important than ever to have a strong case for support. Donors do not give to need, but to organizations that meet needs, so it will be important to demonstrate impact.
Planned giving options will continue to be critical to hospital fundraising. Leading philanthropic scholars have estimated that there will be a $41 trillion transfer of wealth between generations over the next forty years. Planned giving offers donors the chance to minimize their tax burden, take care of their heirs, and maximize their philanthropic intentions. Major gift donors will have considerable motivation to make a gift that is the most cost effective and beneficial for all the people and causes they care about. Planned giving offers options (ex., a lead trust) that are very advantageous in a weak economy while securing additional tax benefits not available in outright giving. This is an area that needs focused attention from a nonprofit organization.
Impending health care reform highlights the need for a well-diversified fundraising stream of income. While it is always a good idea to attend to the income mix, fundraisers should use this opportunity to scrutinize where they are spending their time and the return they receive on this investment. For example, if 60% of dollars raised result in major gift visits, roughly 60% of a fundraiser’s time should be devoted to this effort. Historically, fundraising offers fairly low returns on corporate fundraising, yet many nonprofit organizations devote considerable time to this effort. The utility of special event fundraising is often poorly understood by nonprofit boards who tend to encourage large amounts of staff time devoted to this type of effort that is a poor producer of results. This doesn’t even take into account the cost of missed opportunity and volunteer burn-out.
Grateful patient programs need to be as strong as possible. Many hospital systems with entrenched (yet thriving) grateful patient programs have put little thought into the structure, look and feel of their programs. Competition for charitable health care dollars will continue to increase, so the programs that are eye catching and inviting may have an advantage.