Donations to Hospitals Fell Sharply in 2002, New Figures Show

The economic downturn caused donations to hospitals to drop sharply last year, according to new fund-raising estimates released by the Association for Healthcare Philanthropy, in Falls Church, Va. The association said hospitals received $3.64-billion in cash gifts last year, down from $4.89-billion in 2001.

The association collected figures from 282 of its members and used that information to determine trends for the 3,400 nonprofit groups it represents.

The report estimates that when planned gifts and pledges are counted, as well as endowment interest and gifts of products and services, hospitals took in $5.53-billion, compared with $8.01-billion in 2001. The decline comes after a 15-percent gain for hospitals: In 2000, total donations were estimated to be $6.96-billion.

Hospitals raised a median of $1.01-million in cash, meaning that half received more in cash and half less. The median amount raised in pledges was $330,000, while the median figure for planned gifts — donations that offer special tax benefits to contributors and are often received after a donor has died — was $344,372.

William McGinley, president of the Association for Healthcare Philanthropy, said the economy was to blame for the decrease in donations. He said hospitals were facing significant financial crunches not only because of the decline in donations, but also because their endowments suffered losses in the turbulent stock market.

“We really felt this coming,” Mr. McGinley says, “but the depth of the decrease really surprised me. The good news is that people stuck with us. They’re still giving; they have just reduced the size of their gifts.”

While most types of health-care institutions faced losses, not all did. Health-care systems that include multiple hospitals or medical centers saw their total donations rise to $1.71-billion, from $1.59-billion in 2001. Gifts to community hospitals rose to $1.45-billion, from $1.37-billion in 2001.

All other types of institutions, including academic institutions, children’s hospitals, long-term-care facilities, medical associations, research institutions, and education foundations, reported losses in donations.

Academic institutions suffered the biggest losses in donations, with a decline to $542-million in 2002, down from $2.96-billion in 2001.

Mr. McGinley says the sluggish economy will probably continue to cause problems for fund raising thoughout this year and beyond.

“I’m not totally confident that we’ll rebound completely [next year],” says Mr. McGinley, “but we’ll bounce back eventually.”

The report, “USA/Canada Association for Healthcare Philanthropy Report on Giving FY 2002,” is available from the Association for Healthcare Philanthropy, 313 Park Avenue, Suite 400, Falls Church, Va. 22046; (703) 532-6243; fax (703) 532-7170; http://www.ahp.org. The cost of each copy is $75 for association members and $125 for others.