Hospitals’ 2020 fundraising on pace to top 2019

Early into the COVID-19 pandemic, Sharp HealthCare’s fundraising team thought maybe it could raise a few million dollars to buy more personal protective equipment.

The three foundations that support the San Diego-based health system ended up with a record number of donors in the fiscal year that ended Sept. 30—about 40% of whom were first-timers—and a fundraising total that easily beat the prior year.

“We were incredibly overwhelmed with support,” said Bill Littlejohn, CEO of the Foundations of Sharp HealthCare, which raised $29 million in its fiscal 2020, about $4 million over the prior year.

In the same way wildfires trigger donations to the Red Cross, the crisis that consumed hospitals in 2020 also made them more visible to community members who hadn’t thought to donate before. While there aren’t hard numbers yet, healthcare philanthropy leaders say hospital fundraising totals are on pace to meet or in many cases exceed 2019 levels, driven in no small part by a groundswell of impassioned new donors, moved by stories of front-line workers risking their lives to treat coronavirus patients.

In one example, a donor drove up to the front door of an emergency department in the Midwest and handed the security guard a $10,000 check, said Alice Ayres, CEO of the Association for Healthcare Philanthropy. In Santa Cruz, Calif., an anonymous donor’s $1 million gift went specifically to bonuses for hospital staff. There’s also been countless donations of PPE, meals and hotel vouchers for healthcare workers.

The AHP and American Hospital Association raised more than $500,000 for hospitals in the past seven months through a campaign they launched in response to the pandemic.

“It’s been really remarkable to see just how generous donors are being in this time of crisis,” Ayres said.

The pandemic is unique in that it wasn’t just an issue raised by a marquee name like the Mayo Clinic, it was everywhere. All hospitals dealt with it, Littlejohn said. That boosted people’s appreciation of their local hospitals, he said.

“You didn’t have to be the U.S. News No. 1 hospital because people saw that it was right there where it was taking place,” Littlejohn said.

Hospitals tend to direct their fundraising efforts at former patients and their family members. So-called grateful patients and families typically represent between 60% to 80% of their philanthropic revenue, said Chad Gobel, CEO of Gobel Group, a consultancy focused on healthcare philanthropy. This year’s theme is grateful communities.

“Whereas before, the grateful patient or grateful family understood the impact the organization was having on them, I think now the community has a better appreciation and a better sense of how that hospital is having a positive impact on the community,” Gobel said.

Like Sharp, 2020 charitable giving to Intermountain Healthcare is also on track to surpass the nearly $107 million raised in 2019, with the exception of a unique, $50 million commitment made late last year, David Flood, chief development officer for Intermountain Foundation, wrote in an email. History shows people tend to give during crises—think 9/11 or the stock market fallout of 2008.

“Americans understand and gravitate to need,” Flood said.

Like others, Salt Lake City-based Intermountain Foundation is seeing more new donors, especially at the entry level of the giving pyramid, as well as “meaningful activity” at the high end of the scale, Flood said. There’s been a drop-off along mid-level donors.

That money will be important to 24-hospital Intermountain, whose operating income fell almost 50% year-over-year in the nine months ended Sept. 30, 2020. The system still posted a strong 3.4% margin on $6.9 billion in revenue during that time.

It’s not yet clear whether the money Sharp HealthCare’s foundations raised in its fiscal 2020—$6 million of which was specifically from its COVID campaign—will be enough to offset the health system’s losses related to the pandemic—especially because the battle against COVID is far from over in its four acute-care hospitals, Littlejohn said.

This is not to say strategy didn’t play a role in whether hospital fundraising was successful in 2020. Organizations that didn’t perform well were waiting for normalcy to snap back. Some furloughed their philanthropy staff or redeployed them to other areas, said Betsy Chapin Taylor, president of Accordant Philanthropy, a healthcare philanthropy consultancy.

“We saw a lot of that,” she said.

Overall though, Chapin Taylor said most of her healthcare clients have seen higher total charitable giving in 2020 over the prior year because of how visible COVID made their plights. That’s consistent with shifts in charitable giving to the affected areas during a crisis, she said.

Still, hospital foundations had to be agile. That meant not only shifting quickly to virtual meetings and events, but finding a way to be innovative while doing so, Chapin Taylor said.

For Sharp’s foundations, the shift to virtual meetings and events allowed for more rapid communication than in the past. Whereas before, it would have taken six weeks to organize a lunch fundraiser at a hotel, today the foundation can get 60 people on a call next week, Littlejohn said.

Sharp was able to hold more events and raised more money virtually than it had with live events just before the pandemic hit.

Intermountain’s strategy was to “make and maintain contact like never before,” Flood said. The messaging was designed to create a two-way street. So rather than just asking people for money, it was acknowledging they had been there for Intermountain in the past and the hospital is by their side now.

While many health systems in March rolled out campaigns to help with COVID, Intermountain was in a tricky spot as it had just weeks earlier announced a new campaign with a $50 million lead gift. For that reason, it didn’t fundraise for COVID specifically, but focused instead on having meaningful conversations at a time when people were frightened, Flood said.

“So while we intentionally did not bring in as much immediate support directly around COVID, we appear to be positioned well, with deeper relationships as we restart that campaign engine,” he said.

The question that will linger after 2020 is whether hospitals can hang on to all of their new donors, or whether they’ll be one-time givers, Gobel said. Philanthropy leaders have to think about how they’ll deepen those relationships and convert them into loyal donors.

“This idea of the grateful community: Will that stick, or will we go back to focusing on the grateful patient and family?” he said.

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