Charitable pledges to nonprofit hospitals and healthcare systems in the United States and Canada declined last year during the recession, forcing fundraisers to spend significantly more money in fiscal year 2009 than in past years to secure gifts and grants, according to research by the Association for Healthcare Philanthropy.
William C. McGinly, president and chief executive officer of the AHP, said the recession’s impact and duration were felt more strongly in the U.S. than in Canada, where healthcare philanthropy tended to advance slightly or at least hold its own despite lower levels of government support. U.S. nonprofit hospitals often struggled just to keep giving levels steady, and some saw declines.
“The constant message that shines through the data is that organizations that best survived last year’s worsening economy were those who persevered by keeping sufficient staff and resources to maintain well-rounded philanthropic opportunities and programs,” McGinly said.
AHP gathered detailed data from 66 institutions across the U.S. and Canada, including community hospitals, academic/ teaching, tertiary and specialty hospitals and healthcare systems for its latest benchmarking data. On average, the recession hurt charitable giving to healthcare institutions most severely in the Western region of the U.S.
Sample wide, median return on investment (ROI) – a measure of fundraising effectiveness – fell 23 percent in 2009 from $4.63 to $3.57. For cash donations alone, median ROI fell 17 percent to $3.26.
Last year physicians and other hospital employees of the organizations reporting data in this study donated more money and did so more frequently. Gift amounts from physicians and physician groups averaged $5,000, up $3,000 from 2008 showing “great strides” in foundations’ efforts toward building the internal culture of philanthropy, according to AHP.
Major gifts of at least $10,000 from individuals, corporations and foundations accounted for 55 percent of all revenue raised by institutions in the benchmarking sample, which was seven percent more than in 2008. Annual giving’s portion of total revenues was unchanged at 15 percent, however, costs associated with annual giving efforts took 27 percent of all fundraising expenses in 2009, compared with 19 percent in 2008.
Planned giving often takes on added importance in difficult economic times because it allows donors to postpone charitable payments, said McGinly. Last year, however, planned giving actually went down two percent as a portion of 2009's total giving to institutions in the benchmarking study. Although, the average planned gift size increased to more than $140,000, up from about $100,000 in the 2008 survey.
AHP’s benchmarking survey for 2009 confirmed trends noted in its FY2009 Report on Giving, which examined charitable donations raised by 522 U.S. and Canadian nonprofit hospitals and healthcare systems. The FY2009 Report on Giving found that healthcare philanthropy dipped 11 percent in the U.S. last year to $7.644 billion while rising 5.2 percent in Canada to $1.124 billion.