Despite the poor economy, U.S. nonprofit hospitals and health systems managed an 8 percent increase in philanthropic donations last year, to more than $8 billion, according to a report by the Association for Healthcare Philanthropy.
The fiscal year 2010 Report on Giving USA notes that individual donors contributed almost 60 percent of the total raised by hospitals.
The news wasn't entirely positive, as fundraising costs climbed and return on investment dipped.
The AHP's annual survey of fundraising professionals showed that donations and grants to healthcare institutions in the not-for-profit sector totaled $8.264 billion in fiscal year 2010, up $620 million over the $7.644 billion raised in fiscal year 2009.
William C. McGinly, president and CEO of the AHP, noted that while last year's total was still short of the $8.588 billion raised in FY 2008 and the FY 2007 level of $8.347 billion, the 8 percent growth rate was the healthiest rate of advance since FY 2006.
"These outcomes for fiscal 2010 were not unexpected," he said. "They reflect the slow pace of our economic recovery and shifts in giving priorities that have resulted."
Annual giving was the largest source of funds raised in FY 2010, the report revealed, accounting for 20 percent of all funds raised. It was followed by major gifts (17.1 percent), capital campaigns (15.4 percent) and special events (14.8 percent). Planned giving, which includes bequests, charitable gift annuities, charitable remainder trusts and similar long-term philanthropic arrangements, accounted for 9.5 percent of donations last year, similar to pre-recession levels.
"Earlier studies AHP released this year showed signs of progress beginning in 2010, but far from a full recovery from the recession," McGinly said.
The AHP found that healthcare organizations used donated funds to support a range of programs and functions. In FY 2010, as in previous years, organizations directed the largest single share of their donated dollars to fund construction and renovation projects; however, that portion has declined since FY 2009, down to 22 percent from 27.3 percent.
New and upgraded equipment purchases constituted the second largest category, at 20.6 percent, followed by general operations at 17.6 percent – both up slightly from FY 2009. Community benefit programs remained constant at about 10.7 percent.
Bad news in the report, and in non-profit fundraising more broadly, is that foundations have experienced a falling return on investment over the past three years of the recession. ROI declined, on average, more than 4 percent, to just $3.05 raised for every dollar spent on fundraising.
Additionally, costs to raise each dollar have climbed, said Mary Anne Chern, president of the White Memorial Medical Center Charitable Foundation in Los Angeles.
According to the AHP survey, the cost-to-raise-a-dollar through philanthropy was 33 cents in FY2010, above 30 cents for the third year in a row. Taken together with ROI declines, the metrics indicate that healthcare fundraising has become more challenging and, therefore, more expensive. Chern said additional resources are needed to raise the same amount of funds during difficult economic times.
"Last year's success was largely due to the dedicated work of the volunteers and professionals who support these philanthropic efforts," said Chern.
Fundraising programs that help to sustain hospitals associated with academic institutions and children's hospitals showed higher than average success in obtaining donations, as did programs that have been in existence for 15 or more years, and by those with at least four professional fundraisers on staff.
For more on hospital community benefit, see bit.ly/hfn-community