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Charitable Giving to Health Organizations Rose 7.3% Last Year

Analysis  |  By Philip Betbeze  
   July 11, 2018

New study shows strong growth in giving to healthcare, but similar performance will be more difficult to achieve in 2018.

A new study by Giving USA estimates that charitable giving to healthcare organizations rose a strong 7.3% (5.5% adjusted for inflation) in 2017.

However, charitable organizations like hospitals and health systems can't necessarily count on a rapidly rising stock market and tax favorability—issues that fueled 2017's strong growth—to continue in the future.

Indeed, healthcare organizations weren't outliers in recording strong giving growth. Charitable giving overall in 2017 broke records, and other sectors also saw big increases.

  • Religion: up 2.9%
  • Education: up 6.2%
  • Human services: up 5.1%
  • Foundations: up 15.5%
  • Public society benefit organizations: Up 7.8%
  • Arts, culture and humanities: up 8.7%
  • International affairs: down 4.4%
  • Environment and animal organizations: up 7.2%

Overall giving reached more than $400 billion for the first time last year, increasing 5.2% over 2016.

But such increases were fueled by a booming stock market, a strong economy, and the prospects for a major tax law change that will take effect for the 2018 tax year that might make charitable giving less valuable for tax deductions, at least for individuals.

Some variables are beyond their control. The Healthcare Philanthropic Index suggests that the economic health of the community in which the hospital is located accounted for half of organizations' fundraising success.

But other factors that organizations can influence, such as their relationships with potential donors, accounted for all other contributed income.

To make sure giving doesn't suffer in 2018, hospitals and health systems will possibly have to refine their efforts to mimic those of top-performing organizations.

The Association for Healthcare Philanthropy noted that high-performing organizations, which are defined as those that raise more net funds than 75% of responding institutions, boasted the following attributes compared to all responding institutions:

  • They allocated an average of 13.5% of their fundraising resources to research on potential donors and major gifts, compared with 6.4% of resources for all institutions.
  • They engage in capital campaigns more frequently, enabling them to reach more potential donors.
  • They tend to employ more direct and indirect fundraising staff.
  • They tend to have an increased level of direct fundraising expenses—all actual costs needed to carry out each solicitation method.

Philip Betbeze is the senior leadership editor at HealthLeaders.

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