Fundraising, Part 2: Healthcare groups invest in development capacity

By Todd Cohen

[Note: This article is from a report written for Blackbaud, which asked me to look at fundraising strategies that nonprofits have found to be effective.]

The continuing recovery of the economy has helped fuel strong growth in giving to the more than 5,000 members of the Association for Healthcare Philanthropy since a slight drop in 2009, says Bill McGinly, the Association’s president.

Overall giving to nonprofit healthcare providers, including hospitals, medical centers, long-term care organizations, hospices and children’s facilities, grew to nearly $9 billion in 2011 from $8.3 billion in 2010, and that trend continued in 2012, he says.

While much of that growth has been tied to the economic recovery,  it also reflects “more stimulation and activity in planned and major gifts, and the commitments people are making,” he says,

Fundraising performance is the direct result of investment in fundraising capacity, McGinly says, including the size of the fundraising staff.

Organizations that had 10 or more full-time direct fundraising professionals and were among the highest performing organizations raised a median of $9.4 million, a median that was double that of organizations in all other performance levels based on total dollars raised.

High performers also had more “maturity” in their fundraising programs, and a bigger variety of programs or ways to give.

After health care giving fell roughly $1 billion in 2008, health care organizations also have seen expanded revenue from  special events and annual giving programs, while funds from major and planned gifts plunged in 2008 and 2009 because of a “lack of confidence related to the economy,” McGinly says.

Organizations that kept fundraising staff instead of cutting positions were able to work on maintaining relationships with major donors or those interested in planned giving, and giving in those programs has rebounded more quickly, he says.

Contributing to that recovery, in addition to the revival in the economy and donor confidence, McGinly says, has been greater awareness on the part of donors about the importance of health care philanthropy as a result of the national debate on health care reform.

Health care organizations that have been effective at fundraising also have provided ongoing training for fundraising staff; hosted activities that get donors to their facilities; engaged their volunteer and executive leaders; heightened the level of contact with donors through more meetings and appeals; and reignited capital campaigns.

More recently, annual campaigns often are involving three appeals, not just one.

High performing organizations had direct fundraising staff that outnumbered all their counterparts by three to one.

And organizations that relied on multiple activities, such as special events, annual campaigns and invitations to visit the facility, performed much better in their fundraising than organizations that had fewer activities.

The result was that high performing fundraising organizations raised nearly 11 times more in net fundraising production after costs, including cash and pledges, than all their counterparts.

Key to effective fundraising, McGinly says, is a strong culture of philanthropy within an organization.

“Fundraisers need to hold their bosses accountable and step up and take the lead in making sure that philanthropy is an integral part of the financial picture of their organization,” he says, “and that it can be depended upon, and that is it crucial in building what the future of their organization will be.”

Next: Human services groups focus on direct response marketing

The series:

Fundraising, Part 1: Basics key as economy starts to recover

Fundraising, Part 2: Health care groups invest in development capacity

Fundraising, Part 3: Human services groups focus on direct response marketing

Fundraising, Part 4: Museums aim to diversify donor base

Fundraising, Part 5: Major gifts a focus of environmental group

Fundraising, Part 6: Direct marketing a key for public society benefit group

Fundraising, Part 7: International affairs group aims to show

Fundraising, Part 8: Faith-based groups count on direct mail

Fundraising, Part 9: Independent school partners with parent volunteers

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