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Recession Slows Charitable Giving for Healthcare

John Commins, for HealthLeaders Media, October 28, 2009

Philanthropic giving for healthcare in the United States grew by a modest 2.9% to $8.6 billion in recession-wracked 2008, a rate of growth that was half that of 2007, according to the new Report on Giving issued this week by the Association for Healthcare Philanthropy.

Much of the slight gain in 2008—about $241 million—was attributable to bookkeeping dates. Most nonprofit hospitals and healthcare systems closed their books before the last quarter of 2008, when U.S. gross domestic product plunged more than 5%. Institutions that closed their books on Dec. 31, 2008, actually saw a 0.2% decline in annual giving, the AHP report states.

AHP President William C. McGinly says the tepid results should serve as a "wake up call" to President Obama and Congress, who are considering legislation to limit charitable deductions as tax write-offs.

"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," McGinly says. "Compounding this scenario would be the Obama administration and Congress' attempts to limit the charitable deduction write off, thus dampening wealthy donors' incentive to give and further reducing charitable contributions to all philanthropic organizations."

McGinly says that while the recession may be technically over, AHP members fear their charitable organizations will continue to feel its negative repercussions throughout the recovery.

The 2.9% increase was about half the growth rate achieved in 2007, when donations totaled $8.3 billion. Total pledges for charity fell 6.2% in 2008, while planned gifts secured but not paid fell almost 13%.

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

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