South Florida Business Journal
By Susan R. Miller
America’s nonprofit hospitals took a hit last year as donations dropped to $7.6 billion – down $944 million from 2008 levels, according to a report by the Association for Healthcare Philanthropy.
That’s the first time since 2002 that nonprofit hospitals experienced a drop in giving.
“Whether the recession ended in 2009 is for economists to debate, but its ripple effect certainly continued to curtail the ability of donors to give,” AHP President and CEO William C. McGinly said. “It means fundraisers will have to work harder and smarter.”
The largest declines were in cash donations, which were down $818 million from 2008. Secured pledges declined $97 million, year-over-year.
Jodi Pearl, grants coordinator at Memorial Healthcare System, told me in a recent interview that it’s become even more challenging for hospitals, as they have to deal with caring for people who have lost their jobs – and their insurance.
Generally speaking, she said, “donors are more cautious with their money and they probably will stay that way,” for a while.
I’ll have more on the challenges facing all nonprofits in our upcoming annual Giving Guide, which comes out at the end of October.
The AHP report found that four out of five U.S. donors were individuals, and most of them had a direct relationship with the health care facility to which they gave, including patients, employees, physicians and board members. Other major donors included businesses and foundations, which made about 12 percent of all donors, accounting for 28 percent of the funds raised.
"There are a lot of foundations that are not giving this year, or they are giving the same amount that they have given to in the past and not to new projects because they don't want to risk their money," Pearl said.
As Brian Bandell, who covers the health care industry pointed out, not all hospitals had trouble raising money. In March, he reported that South Florida's biggest stand-alone nonprofit hospital, Mount Sinai Medical Center, collected $15.8 million at its foundation in 2009, up from $10.5 million in 2008.
As for where the money raised was spent: Most devoted donations went to construction and renovations (27.3 percent) and new equipment (18.4 percent). Eighteen percent of donated dollars went to fund charity care and community benefit programs, and 15 percent supported general operations. Other uses to which donations were put included endowments (6.5 percent), research and teaching (5.1 percent), hospice and long-term care (4 percent) and other purposes (5.6 percent).