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Survey: Need outpacing charitable donations at not-for-profit hospitals

Donation rate may jeopardize future fundraising efforts

Topics: Campaigns, Philanthropy, Annual Giving, Foundation Strategy, Major Gifts, Planned Giving

March 08, 2012

Not-for-profit hospitals experienced slower rates of charitable donations in fiscal year (FY) 2010, according to the first Association for Healthcare Philanthropy survey that examined a full year of post-recession fundraising trends.

The report was based on data for 50 U.S. hospitals and 13 Canadian hospitals from AHP's Performance Benchmarking Service survey. The survey used three factors to measure fundraising efficiency: cash, the cost to raise a dollar, and return on investment (ROI).

Findings
The results showed that cash donations increased to $258 million in FY 2010, up from $238 million in FY 2009. However, the median cost of raising a dollar—calculated by dividing fundraising costs by gross production fundraising revenue—also increased slightly from 23 cents in FY 2009 to 28 cents in FY 2010, Modern Healthcare reports.

The ROI, which is determined by dividing gross product returns by the total amount used to fundraise, increased in FY 2010 by 1 cent over FY 2009 to $3.58. However the survey noted that this rate is still below the ROI in 2007, which was $4.48. 

According to William McGinly, president and CEO of AHP, the results represent a "definite downward drift in securing pledges," which could mean "organizations will have less in the pipeline for future years, adding to the uncertainty of the recovery."

High-performing hospitals
A separate AHP survey classified 11 U.S. hospitals and five Canadian hospitals as "top-performers" in FY 2010. Top-performing organizations raised at least $5 million in net fundraising revenues, placing them in the top 75th percentile of the facilities that participated in the survey.

According to AHP, top-performing hospitals include Lehigh Valley Health Network, John Muir Health, Le Bonheur Children's Hospital, and Meridian Health (Selvam, Modern Healthcare, 3/6 [subscription required], AHP release, 3/6).

Join the Advisory Board's Performance Benchmarking Initiative
To illuminate the specific drivers of performance and opportunities to elevate return on investment, the Advisory Board’s Philanthropy Leadership Council offers its members access to the Performance Benchmarking Initiative.

Members who submit their most recent fiscal year funds raised and expenses data receive a rigorous benchmarking report containing comparisons of their own foundation or development office’s performance on key fundraising metrics to that of peer institutions from the Philanthropy Leadership Council’s database of over 140 hospitals. Submitters will also receive access to the Online Performance Analyzer, which can be used to compare performance to custom-created cohorts.

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