AHP: Organizations willing to invest in philanthropy will best survive

Because it costs more to raise money during a recession, nonprofit institutions who are willing to invest in fundraising personnel and emphasize major gifts and planned giving will weather the current fiscal crisis, according to the Association for Healthcare Philanthropy.

The AHP's report, “State of Philanthropic Health Care Address,” released by William C. McGinly, the group's president and chief executive officer, is based on the organization’s Performance Benchmarking Service matrix, designed to analyze fundraising experiences of a varied range of foundations whose philanthropic efforts support nonprofit hospitals and healthcare systems throughout North America.

According to the AHP, it costs more to raise money through philanthropy during hard times.

“While hardly surprising, this finding gives rise to a proposition that may be counterintuitive. When severe budget-tightening threatens to become a reflexive response in an economic downturn, it is essential to at least maintain, if not raise, levels of investment in the human and financial resources of fundraising programs,” McGinly said.

Also, when times are tough, size can matter, at least in the short term. According to the study, larger institutions with more revenues were better able to sustain efficient and effective fundraising during the recession and its immediate aftermath.

“It will be interesting to see whether this advantage continues,” McGinly said. “Foundations that support healthcare organizations that have lower operating revenues and cover smaller populations may well bounce back as the economy improves, but they will need to have sufficient staff and resources available to take advantage of an upturn.”

Also, according to the stuy, fundraising programs that maintained their concentration on achieving major gifts and planned giving commitments were among the highest performers. Many of these programs also saw significant upticks in raising money through special events and by encouraging donations from physicians, physician groups and other hospital staff.

The AHP benchmarking survey covered fiscal year 2009 and included data from foundations and development offices of 66 hospitals and healthcare systems in the United States and Canada. Established in 1967, the AHP is a not-for-profit organization whose more than 4,500 members direct philanthropic programs in 2,000 of North America's not-for-profit healthcare providers.