U.S. charitable giving rose $241M in 2008, while Canadian donations struggled

Philanthropic giving for healthcare in the United States grew a “tepid” 2.9 percent – or about $241 million – to $8.6 billion in 2008, while in Canada similar donations fell by a “dramatic” 12.9 percent to $1.07 billion, according to the Association for Healthcare Philanthropy.

“The poor overall results for healthcare philanthropy shown by the AHP Report on Giving are a wakeup call for the Obama administration and Congress,” said William C. McGinly, president of the AHP. “The hit that wealthy individuals have taken in the total worth of their portfolios and holdings during the recession takes huge assets off the table and out of the giving equation.”

According to the AHP report, the 2.9 percent increase ($8.588 billion) was about half the growth rate achieved in 2007, when donations totaled $8.347 billion. Total pledges for charity fell 6.2 percent in the latest year, while planned gifts secured but not paid fell almost 13 percent.

Officials attribute last year’s gain to the fact that nonprofit hospitals and healthcare systems in the United States closed their books before the last quarter of 2008, when the U.S. gross domestic product plunged more than 5 percent. Institutions that closed their books on Dec. 31, 2008, actually saw a 0.2 percent dip in annual giving.

The AHP said Canadian contributions declined to $1.068 billion in 2008, compared to $1.337 billion in 2007, when annual giving had risen by an impressive 9 percent over 2006 levels.

Individual donors were the largest source of contributions in both the United States and Canada, and one-fifth of all individual donors were patients.

Findings for the United States include:

• More than eight of every 10 donations came from individuals, whose contributions comprised 60 percent of all philanthropic funds raised by nonprofit healthcare institutions last year.
• One in 10 donations were made by businesses, including business-sponsored foundations, representing 17.5 percent of all funds raised, down slightly from 2007.
• Non-corporate foundations accounted for less than 3 percent of donors but almost 14 percent of revenues.
• Other U.S. giving sources, including hospital auxiliaries, public agencies and civic groups, accounted for 8.6 percent of total funds raised in 2008, compared to 7.5 percent in 2007.

“As economic conditions improve, nonprofit hospitals, hospices, clinics and nursing homes that have steadily maintained their fundraising efforts will be the first to benefit,” said AHP Board Chairman J. Gregory Pope, vice president of philanthropy for the Saint Thomas Health Services Foundation in Nashville, Tenn. “These institutions are mainstays of the American healthcare delivery system and continue to deserve the support of their communities.”

Findings for Canada include:

• The portion of donations made by individual givers dipped almost 10 percent last year to just fewer than 52 percent of the total.
• Canadian businesses, including corporate foundations, supplied about one-quarter of the 2008 funding, about the same as the previous year.
• Canadian foundations, other than corporate, contributed 6.3 percent in 2008, also little changed from the previous year's level.
• The Report on Giving noted that “the biggest change was other types, such as hospital auxiliaries, public agencies, civic groups, whose share rose from 7.0 percent to 16.2 percent.”

The report found that funds raised in the United States for healthcare institutions in 2008 were largely used to support construction and renovation of facilities – although to a lesser extent than in 2007 – followed by the purchase of equipment, general operations and community benefit programs.

During the same period, the largest portion of philanthropic funds raised by Canadian hospitals, 47.2 percent, went for equipment purchases. This is more than twice the amount for construction and renovation, which was the next-largest spending category, followed by research and teaching and general operations.

“The challenges we faced last year have encouraged hospitals throughout Canada to redouble their fundraising efforts,” said Nancy Hewat, AHP Canada's regional director and executive director of the Grand River Hospital Foundation in Kitchener, Ontario.