Cash Donations to Hospitals and Medical Centers Drop 2.5% in a Year

Hospitals received $2.73-billion in cash gifts last year, a 2.5-per-cent drop from 1996, according to new estimates for more than 1,400 non-profit hospitals nationwide. The estimates were part of a survey released by the Association for Healthcare Philanthropy.

The drop comes at a time when giving to other kinds of charities is on the rise: The most recent edition of Giving USA, an annual report on philanthropy, said that donations to all charities grew by 7.5 per cent last year (The Chronicle, June 4).

The association, which represents fund raisers at hospitals and medical centers, attributed the drop in giving to the continuing growth in the number of institutions that have considered or undertaken mergers with other non-profit entities or have sold their organizations to for-profit businesses.

“The biggest single reason is confusion among donors about all the mergers and acquisitions,” said William C. McGinly, chief executive officer of the association.

Even at hospitals that are determined to maintain their independent status, concern about mergers has chilled giving, fund raisers say.

At the Washington Hospital Foundation, in Pennsylvania, contributions have dropped to $1.2-million annually, down from $1.5-million. “Our hospital board decided not to merge, but the threat is still there in donors’ minds,” says Carole B. D’Onofrio, assistant director of the foundation, the hospital’s fund-raising arm.

Ms. D’Onofrio says that grant-making foundations, not just individuals, have been less willing to give because of the uncertain future of non-profit hospitals and of health care in general.

“Even private foundations in our area that had given to health care have held back,” she says. “They’ve changed their funding parameters to exclude health care and give to other human services.”

Cash gifts to hospitals were not the only type of contribution that declined in 1997. The survey also found substantial decreases in pledges (27 per cent), planned gifts (19 per cent), and non-monetary gifts such as real estate or stock holdings (34 per cent).

The estimated value of those types of gifts last year was $621-million for pledges, $749-million for planned gifts, and $172-million for non-monetary gifts.

Officials at the association, however, cautioned that the survey findings are far from conclusive. The findings are not representative of the country’s estimated 3,000 non-profit hospitals, they said, and the association does not sample the same organizations year after year.

Instead, the data are culled from members of the association. In 1997, the association received data from 224 organizations, and in 1996 it received information from 295. The association used those returns to calculate the amount donated in the past two years to its member institutions across the country.

Not all hospitals suffered a drop in giving last year. Rush-Presbyterian-St. Luke’s Medical Center, an academic institution in Chicago, had one of its best years ever. The center completed a five-year capital campaign in May 1997. The goal was $160-million, but the center raised $222-million.

And 20 children’s hospitals nationwide have begun to realize substantial returns after starting Children’s Circle of Care, a network of donor clubs. Taking a cue from charities such as United Ways, which have increasingly come to rely on such clubs to raise large gifts, the hospitals have started recruiting individuals or couples who each give $10,000 or more annually.

In return for an annual gift to their local club, donors are invited to an all-day conference held in a different city each year. Donors pay their travel expenses to attend the meeting, which features a speech about the importance of philanthropy at children’s hospitals as well as presentations on cutting-edge medical research.

Last year, 1,204 donors to the clubs gave $72.2-million to the children’s hospitals. Both the number of donors — and the amount raised — has more than doubled since the clubs’ debut in 1994, when 566 donors gave $33-million.

As they have in years past, children’s hospitals in the survey saw the highest median return, $8.19, for each dollar that they spent on fund raising — meaning that half of the hospitals saw less and half saw more than that amount. And children’s hospitals also raised the most money by per bed last year, bringing in an average of $43,494 per bed, followed by specialty hospitals such as burn centers, which raised $6,448 per bed, and academic medical centers, which raised $5,889 per bed.

Hospitals in the survey spent a median $271,000 on fund raising last year, with children’s hospitals spending the most, a median of $901,000, and community hospitals spending the least, a median of $211,000.

Among other survey findings:

* Contributions from individuals made up 60 per cent of the total raised by hospitals in the survey, followed by foundation grants (15 per cent), corporate contributions (13 per cent), and other sources such as civic groups (12 per cent).

* Seventy-three per cent of hospitals in the survey had an endowment, ranging in value from $6,000 to $206-million. The median endowment for all hospitals was $2.9-million.

Copies of the survey results, “Report on Giving FY 1997,” are available from the Association for Healthcare Philanthropy, 313 Park Avenue, Suite 400, Falls Church, Va. 22046; (703) 532-6243. Association members will be sent a copy of the report; they can order extra copies for $25 apiece. The price for non-members is $50.