Five Principles To Keep In Mind When Running A Hospital Foundation

According to the American College of Healthcare Executives, 77% of healthcare CEOs name financial challenges as their number one concern.

With ever-tightening margins from operations and investments, increasing debt, and healthcare reform, private philanthropy remains an attractive option to supplement capital expenditures, special projects, healthcare initiatives or general operations.

Hospital foundations have existed for many years in the United States, supported by the I.R.S. tax code as affiliated 501 (c) (3) charitable corporations. Below are five principles that should be kept at the forefront of any hospital foundation’s strategic planning and day-to-day operations:

The foundation exists to support the hospital. 

Anecdotes abound of supportive foundations that got out in front of the institutions they were created to support. The danger here is that funds can be raised for projects that are not important to the hospital or community. Ill-conceived projects not aligned with the priorities of the hospital can end up costing unbudgeted dollars. Additionally, when the hospital foundation or hospital makes grants to other nonprofits it creates confusion in the community about its own need for philanthropic support.

Strategic foundation leadership is essential to promote the hospital’s priorities. Well-run foundations engage in annual funding plans, which are based upon the strategic plan of the hospital and developed in cooperation with the hospital leadership team.

The organizations should have mutually complimentary and coordinated boards. 

Overlap of board members may be dictated by articles of incorporation or bylaws or they may be voluntary. However, it is helpful to have one or two board members serve on both boards. Among other benefits, shared board members will yield improved communications and an understanding of the complementary missions.

It is recommended that the boards meet jointly at least once a year, and include combined social activities. The foundation board will increase the reach of the hospital governing board and offer additional roles for select community leaders. The reputation of the hospital can be furthered by strong foundation leadership.

The hospital CEO can be the greatest fundraising asset. 

The CEO sets the tone for the acceptance and importance of the culture of philanthropy. Often due to a lack of time or understanding of the philanthropic mission, CEOs will limit their involvement and delegate responsibility and accountability to the foundation.

It makes a significant statement to a major prospect if the CEO is willing to lead the discussion involving a financial commitment to the hospital. When talking about the needs of the hospital and the promise that the gift will be put to good use, no one else carries more weight of the organization behind them than the CEO.

Development is based upon the cultivation of relationships. The CEO conveys trust and confidence in the hospital by her/his committed involvement in the process. Getting the CEO comfortable with the philanthropic process is the obligation of the foundation chief executive, in partnership with the foundation board chair.

As veteran development officer, Frank Hall said in 2005, “Successful major gift fundraising doesn’t occur until a potential donor develops a relationship with institutional leadership.”

The foundation connects the hospital to the community.

Those of affluence and influence can participate in the foundation by serving on the board or on committees, but the affiliation doesn’t stop there. All walks of life can participate through fundraisers, which are aimed at a broader swath of the population. From galas, auctions, golf tournaments, runs, walks, and community events are as important for the people they engage as the dollars that are raised. The events identify the hospital as a charity in need of community support and allow grateful patients and families to express their gratitude tangibly through giving.

Multiple channeled giving is the hallmark of a successful foundation. 

Fundraising efforts should not be limited to one method. While they are popular to raise awareness and marshal volunteers, events take time and effort, which limits efficiency and effectiveness. A robust foundation factors in personal solicitation, direct mail/email, and events to meets it annual goals. Annual gifts, major multi-year commitments, and estate or planned giving are the assurance of a well-run program.

Ultimately, your goal is to create a strong partnership, based upon trust and mutually shared goals, for the good of the organizations, the donors, and the community.

Photo courtesy of our client, the St. Vincent Hospital Foundation.