Healthcare Philanthropy Hobbled by Recession in 2009

Fundraisers spent significantly more money in recession-wracked 2009 than in years past, but collected fewer donations for nonprofit hospitals and healthcare systems, according to the Association for Healthcare Philanthropy.

"The recession's impact and duration were felt more strongly in the U.S. than in Canada, where healthcare philanthropy tended to advance slightly or at least hold its own despite lower levels of government support," said William C. McGinly, president/CEO of AHP. "U.S. nonprofit hospitals, however, often struggled just to keep giving levels steady, and some saw declines."

AHP gathered data from 66 institutions across the U.S. and Canada, including community hospitals, academic/ teaching, tertiary and specialty hospitals and healthcare systems. On average, the recession hurt charitable giving to healthcare institutions most severely in the western United States. Across the sample, median return on investment—a measure of fundraising effectiveness—fell 23% in 2009 from $4.63 to $3.57. For cash donations median ROI fell 17% to $3.26.

AHP's benchmarking survey, which measured ROI for 2009, confirmed trends noted in AHP's FY2009 Report on Giving, which examined charitable donations raised by 522 U.S. and Canadian nonprofit hospitals and healthcare systems. The FY2009 Report on Giving found that healthcare philanthropy dipped 11% in the U.S. last year to $7.6 billion while rising 5.2% in Canada to $1.1 billion.

Interestingly, the survey found that physicians and hospital employees donated more money more frequently. Gifts from physicians and physician groups averaged $5,000, up $3,000 from 2008.

Major gifts of at least $10,000 from individuals, corporations and foundations accounted for 55% of all revenue raised by institutions in the benchmarking sample, which was 7% more than in 2008. Annual giving's portion of total revenues was unchanged at 15%, however, costs associated with annual giving efforts soaked up 27% of all fundraising expenses in 2009, compared with 19% in 2008. 

Planned giving fell 2% as a portion of 2009's total giving, however, the average planned gift size increased to more than $140,000, up from about $100,000 in the 2008 survey.

"The constant message that shines through the data is that organizations that best survived last year's worsening economy were those who persevered by keeping sufficient staff and resources to maintain well-rounded philanthropic opportunities and programs," McGinly said.