JOURNAL OF THE ASSOCIATION FOR HEALTHCARE PHILANTHROPY | WWW.AHP.ORG | FALL 2012

healthcareCONNECTING PEOPLE n ENRICHING LIVES philanthropy

Hope is not a strategy Investing in high-performance fundraising paves the way for success

Also in this issue

16 Why major donors leave 24 Teaching physicians grateful patient fundraising 30 Balancing community benefit and health care philanthropy 35 A cute squirrel sparks a great idea Target Analytics

517277_Blackbaud.indd 1 3/16/11 9:05:27 AM = ;FFž=IHH?=Nž=IFF?=NžAO;L;HN??> Nb_F_[^_lchAo[l[hn__^ N_f_jbih_@oh^l[cmcha&G_g\_lmbcjN_f_jbih_@oh^l[cmcha `ilB_[fnb][l_Ila[hct[ncihm;]kocmcncih&[h^Molp_sm

 ž L?;=B[h^?R=??>siolai[fm  ž ;=BC?P?MO==?MM`ilsiolm_f`[h^siolila[hct[ncih  ž >CL?=N=;GJ;CAH=IHNLIFnblioabChn_lh_nm_lpc]_m  ž J;LNH?LQCNBNB?=IGJ;HSnb[n b[m[l_jon[ncih`il_r]_ff_h]_ ohg[n]b_^chnb_ch^omnls

>CL?=NFCH?ÎMAO;L;HN??g_[hm siob[p_hinbchanifim_ =;FFNI>;Sni^cm]ip_lbiq >cl_]nFch_][hb_fjsio[]bc_p_[ bcab_lf_p_fi`mo]]_mm`ilsiolila[hct[ncih&ao[l[hn__^

>CL?=NFCH? N?=BHIFIAC?M&CH=(

=;FF42**'..2'+,** m[f_m:^cl_]nfch_'n_]b(]ig ž qqq(^cl_]nfch_'n_]b(]ig

498326_Directline.indd 1 9/28/10 2:29:25 PM Fall 2012 Vol. 41 No. 2 CONTENTS

16 FEATURES Hope is not a strategy 10 By Steven A. Reed A new study shows that CEOs are optimistic about the future of fundraising in their organizations but lack an understanding of how to achieve success.

Lost major donors 16 By Jan W. Wood Four experts offer insights on how to retain or reengage valued major donors—especially those considered “lost”—and why they went missing in the first place.

Teaching physicians grateful patient fundraising 24 By Steven Rum, M.S.A., and Scott M. Wright, M.D. A recent study on strategies for teaching physicians how to fundraise found that success hinges upon solid coaching techniques and a coaching curriculum.

Community benefit and health care philanthropy: 30 Friend or foe? By William Marty Martin, Psy.D., M.P.H., M.A., M.S. As a health care organization establishes strategic priorities, its community benefit plan and its plan for philanthropy should support each other rather than compete for resources.

A cute, cuddly squirrel leads to a great idea 35 By Dan Buck A beloved mascot leads baseball fans to step up to the plate for a children’s medical center in St. Louis, Mo. 24

2 | HEALTHCARE PHILANTHROPY JOURNAL / FALL 2012 healthcareCONNECTING PEOPLE n ENRICHING LIVES philanthropy

President, Chief Executive Officer: William C. McGinly, Ph.D., CAE Editors: Vicki Meade, Susan Simolunas AHP Journal Advisory Council: Betsy Chapin Taylor, FAHP, CFRE, chair; Georgina A. Altman, CFRE; Marite M. Butners, J.D., LLM-TAX; Kevin Carrillo, CFRE; Jessica Clemons; Marcy J. DiBlasio, CFRE; Maureen E. Gerard, CFRE; Michael Hammerschmidt; Aline F. Lasseter, CFRE; Maeve O’Byrne; Salvatore F. Polizzotto; Thomas J. Sloan, CFRE, FACHE; Milt J. Smith, FAHP DEPARTMENTS AHP Board of Directors: Chair: Susan J. Doliner, FAHP, CFRE Chair-elect and Chair, AHP Foundation: William S. Littlejohn From the Chair Secretary/Treasurer: Merv D. Webb, FAHP 4 Dream, inspire and make Immediate Past Chair: Mary Anne Chern, FAHP, ACFRE President: William C. McGinly, Ph.D., CAE things happen Vice Chairs: Emily Benham, FAHP, CFRE By Susan J. Doliner, FAHP, CFRE, Pamela Puleo, FAHP, CFRE Chair, AHP Board of Directors Jill Kyle, MBA, CFRE Are you achieving everything on your Regional Directors: philanthropic wish list? A proactive William H. Kiel, CFRE; AHP Midwest approach can turn dreams into Ellen Finnerty Myers, CFRE; AHP Mid-Atlantic reality for your donors and your Sharon A. Jones, FAHP, CFRE; AHP Southeast organization. Jory Pritchard-Kerr, FAHP; AHP Canada Susan Blake; AHP Pacific Sandy L. Ogletree; AHP Rockies & Southwest John Dresser, CFRE; AHP New England As I See It 8 Published by: Stratton Publishing & Marketing Inc. A profession to honor 5285 Shawnee Road, Suite 510, Alexandria, VA 22312 By William C. McGinly, Ph.D., CAE, 703.914.9200 AHP President, Chief Executive Officer Publisher: Debra Stratton Publication Manager: Josephine Rossi Professionalism cannot be conferred Editor: Lia Dangelico on us by other people. It comes from Art Director: Janelle Welch what we expect from ourselves. Editorial/Production Associate: Christine Umbrell Sales Representative: Alison Bashian

The Association for Healthcare Philanthropy (AHP) is the leading authority for standards, knowledge and leadership in health care philanthropy. As the world’s largest association for health care fundraising professionals, AHP represents 5,000 members who raise more than $9 billion each year for community health services. AHP supports its members and serves the public through high performance standards, expert knowledge development and executive leadership that advance the practice and performance of health care philanthropy at both the local and national level.

Healthcare Philanthropy mission: Healthcare Philanthropy will be an authoritative resource for health care development professionals by providing a timely, informative and insightful collection of literature that will raise the standard of individual and organizational performance. Serving as the premier forum for health care philanthropy literature, Healthcare Philanthropy will educate, empower and inspire development professionals and, thereby, help strengthen the case for philanthropic support and the mission of AHP. Rally Squirrel 35 helped raise $500,000 for SSM Cardinal Glennon Children’s Medical Center.

3 | HEALTHCARE PHILANTHROPY JOURNAL / FALL 2012 PUBLISHED SEPTEMBER 2012/AHP-B0111/5193 By Susan J. Doliner, FAHP, CFRE Chair, AHP Board of Directors ISSN 2162-2493 (print), 2162-2507 (online)

Association for Healthcare Philanthropy 313 Park Avenue, Suite 400 Falls Church, VA 22046 703-532-6243 • Fax: 703-532-7170 • www.ahp.org

©2012 by the Association for Healthcare Philanthropy. All rights reserved. From the chair Article submissions should be sent to: Editor, Healthcare Philanthropy, Association for Healthcare Philanthropy, 313 Park Avenue, Suite 400, Falls Church, VA 22046. Article submission guidelines and deadlines are located in the Publications section of the AHP Dream, inspire and website at www.ahp.org.

The Association for Healthcare Philanthropy endorses no opinion or statement of facts by the make things happen authors of Healthcare Philanthropy articles except by action of its board of directors, nor does it lend or imply endorsement of the goods and services hat does the management style look like at your organization: offered by advertisers. reactive, informative or proactive? Reactive philanthropic management only allows you to put out fires. It sets a narrow ADVERTISERS INDEX bandwidth on capacity and limits the scope for raising funds. Informative Aria ...... 8 W philanthropic management allows you to share opportunities with your Peter Wallace, 608/423-1338, www.ariacallsandcards.com CEO, board and donors, but it falls short on action, creativity, urgency, Blackbaud, Inc...... C2 800/443-9441, www.blackbaud.com engagement and emotion. As development professionals, we must be Bliss Direct Media...... 21 proactive. It is our responsibility to make things happen, not just talk about Cindy Fish, 877/355-7435, www.blissdirect.com them. Brakeley Briscoe Inc...... 6 Many of us have enormous wish lists. So why don’t all of those Alden F. Briscoe, 650/344-8883, www.brakeleybriscoe.com wishes come true? Perhaps we try to do too many things at once, Brooks Recognition...... 15 Shawn Plater, 877/608-6987, www.brookrecognition.com losing focus on what’s most important. We must zero in on the top Campbell & Company...... C3 strategic priorities that will resonate with our communities and Sarah Barnes, 877/957-0000, www.campbellcompany.com donors, and proactively move our programs forward on behalf of our Carl Bloom Associates, Inc...... 32 hospitals while remaining Luke Vander Linden, 914/468-8949, www.carlbloom.com/ healthcare open to donor input and CCS ...... C4 expectations of outcomes. Joseph F. X. Lee, 800/223-6733, www.ccsfundraising.com The worst thing we can say Many of Corporate DevelopMint...... 28 Lee Mikell, 842/853-9999, www.corporatedevelopment.com is, “This program is not for us. Crescendo Interactive, Inc...... 7 It’s more than we can do right us have Ardis Schultz, 800/858-9154, www.CrescendoInteractive.com now or perhaps even in the DirectLine Technologies...... 1 future.” If we are professional enormous Martha Connor, 800/448-1200, www.directline-tech.com and doing our jobs well and Graham-Pelton Consulting Inc...... 5 Elizabeth Zeigler, 908.608.1388, www.grahampelton.com consistently (and not jumping wish lists. Kidzpace Interactive...... 6 from one institution to David Meyer, 800/594-9184, www.kidzpace.com another), then we will know MD Designs by Metal Decor...... 22 So why don’t Dan Marshall, 800/637-8591, www.mddesigns.com our capacity. We will know RuffaloCODY...... 27 when our donors are ready and Timothy Logan, ACFRE, 319/362-7483 or 800/756-7483, what programs and projects all of these www.ruffalocody.com will inspire them. Lastly, Thompson & Associates ...... 18,19 Bethany Witt Rozell, 615/369-1416, www.ceplan.com we will have proactively wishes come Washington Strategic Consulting...... 9 established a trusting Kyle Mulroy, 202/207-3655, www.wscdc.com relationship which will not true? waste their time, our time and that of our board or CEO.

4 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012

Our work must be timely, creative, consistent, inspirational and tenacious. I don’t buy it when Brakeley Briscoe is the proud sponsor of the I hear, “He hasn’t called me back” brakeley briscoe George A. Brakeley Jr. or “She won’t be interested in this POWERFUL THINKING | CREATIVE CONSULTING AHP Awards giving ight to great ideas project” or “They just supported something else in our community.” The prospective donor hasn’t had a Capital and Endowment Campaign Counsel Fundraising Capacity Building chance to chime in, to get to know Campaign Management “us” and our impact. The slate is Campaign Planning/Feasibility Studies Development Audits blank if we don’t connect. Major and Annual Gifts It’s not luck or progression Planned Giving Volunteer Leadership Development through the pyramid of giving International Fundraising that results in gifts. It’s building trusting relationships and www.BrakeleyBriscoe.com presenting solid opportunities [email protected] 800-416-3086 that mean something. Most importantly, it’s listening to our CALIFORNIA • CONNECTICUT • METRO DC • TENNESSEE • BRAKELEY FAMILY WORLDWIDE donors. We do our best when we capture someone’s heart and imagination with what’s possible through philanthropy. At Maine Medical Center, the vision for our children’s hospital came from our leadership team, our board and a remarkable donor. The Barbara Bush Children’s Hospital at Maine Medical Center is one of the premier children’s hospitals in the U.S., delivering Entertainment options for patients and high-quality health care that’s visiting families accessible to thousands of children • Kidzpace has a in a vast region. When naming variety of the institution, we wanted to make entertainment systems for sure it aligned with compassion, people of all generosity and family-centered ages visiting care, as well as a breadth and depth hospitals of services of national acclaim. and clinics Barbara Bush delivers on all • Great products counts. She greets each day with for donations and fundraising a “what can we do to improve the efforts lives of others” attitude. Together, we dreamed of what could be and • The Touch2Play now has custom made it a reality. on-screen features SEE US at AHP Philanthropic support keeps for donor recognition IN BOOTH #105 dreams alive and flourishing every day. May you dream today and Call 1-800-594-9184 for more information inspire tomorrow. But don’t just or e-mail [email protected] • www.kidzpace.com dream. It’s up to you to make things happen.

6 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 “ We appreciate Crescendo’s GiftLegacy tools and services. In the past two fiscal years we have documented 59 new planned gifts for approximately $18.7 million and have realized 61 estate distributions of $20.4 million.” Larry Smith Assistant V.P. Gift Planning Baylor University

Request a FREE

GiftLegacy 3.0 Demo www.GiftLegacy.com Auto Install 110 Camino Ruiz, Camarillo, CA 93012 Crescendo Interactive,Insert Inc.CD p. 800.858.9154 20 RELEASE Choose product Enter serial # from envelope 1 1984 – 2011. All Rights Reser 1 .2 f. 805.388.2483 Part 234

ved.

Is your planned giving system working for you? Crescendo’s GiftLegacy 3.0 eMarketing system is the Call to request your personalized demonstration of the only complete system that builds relationships and closes GiftLegacy 3.0 eMarketing system. Visit our website to sign planned gifts. It includes a branded planned giving website up to attend a Bequest Boom seminar in your area and with weekly fresh content; customizable royalty-free learn how to effectively market wills and bequests. marketing literature and Provide and Protect bequest marketing; an online Wills Planner with a network of GiftAttorneys to complete the plan; Crescendo Pro Software for persuasive gift illustrations; CresMobile™— www.CrescendoInteractive.com the first planned giving application for smartphones and 800.858.9154 tablets and much more. GiftLegacy 3.0 gives you all the tools you need to build relationships and deliver results. By William C. McGinly, Ph.D., CAE AHP President, Chief Executive Officer

AS I SEE IT A profession to honor

s I was reading the cover article in this issue of fundraisers—often without integration into the overall Healthcare Philanthropy, I was encouraged to see hospital operation. They focused almost exclusively on the performance improvement principles of large the fundraising craft. manufacturingA firms such as GE and Toyota being used by Today, the field of health care philanthropy has a health care foundations with excellent results. Amazing, vast and growing body of research on which to base its but not surprising. practices. It has a code of professional standards and Health care fundraising has grown tremendously as conduct. It has professional certification programs, such a profession since I began working at AHP in 1983. At as CFRE and FAHP designations. It also has financial that time, an overwhelming number of our members clout. According to AHP’s latest Report on Giving, worked diligently to establish themselves as effective nonprofit hospitals and health care systems in the For many U.S. and Canada raised more than $9 billion in health care FY2010. For many health care providers today, providers today, philanthropy is providing that critical difference in philanthropy programs and in the lives is providing of patients. Philanthropy is that critical undoubtedly a vital and Your connection to former donors important revenue source difference in for hospitals. As hospitals and grateful patients feel the financial crunch programs and from a volatile economy, in the lives of • Courteous Telemarketing government budget cuts and shrinking insurance patients. • Truly Hand-addressed mailings reimbursements, hospital executives are looking • Integrated sustainer campaigns to philanthropic programs for significant, reliable and sustainable support. Contact: Peter Wallace Like all professions, those in the field of health care philanthropy are keenly interested in self-improvement [email protected] and improvement of the profession. You see it in the 608-423-1338 smallest shops to the largest health care systems. You also see it in this journal, where your colleagues take the time to share what they’ve learned so everyone benefits.

507247_aria.indd 1 8 | HEALTHCARE1/21/11 PHILANTHROPY 11:15:28 AM JOURNAL / Fall 2012 In the article “Hope is not experience of more than 100 years care philanthropy can sometimes a strategy,” Steven Reed shares in the field, you’ll want to hear seem at odds, but the article by his research on performance what they have to say. William Marty Martin, Psy.D., improvement initiatives such as Steven Rum, M.S.A., and M.P.H., M.A., M.S., shows how Toyota’s “Lean” and GE’s “Six Scott Wright, M.D., share some they can support each other and Sigma.” Reed shows how applying of the first scientific evidence help achieve strategic hospital- these principles— traditionally used on what really works when wide goals. And Dan Buck in the manufacturing industry—to involving physicians in grateful describes a successful fundraising hospital fundraising efforts can patient fundraising programs. program that grew from an reduce waste, make the best use of Not content to rely on anecdotes alliance between a children’s resources and lead to more fruitful and unsubstantiated information, medical center and a beloved fundraising efforts. they conducted a trial to test three baseball mascot. Lost major donors are a source educational interventions and Health care philanthropy is of frustration for all development determine which would be most a profession to be proud of and professionals. Jan Wood interviews effective in teaching physicians truly appreciate. I encourage four industry experts and picks how to recognize potential grateful you to continue to improve your their brains on the best ways donors and provide qualified knowledge, expertise and skills to bring lost major donors back referrals. to grow your programs and into the fold and maintain their Successful partnerships increase the benefit you provide interests and participation over the also are featured in this issue. to your community. Enjoy the long term. With their combined Community benefit and health “read.”

9 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 FEATURE | By Steven A. Reed

Hope is not a strategy Applying performance improvement principles to health care fundraising

recent confidential study my organization conducted within five major nationwide faith-based health systems revealed that the chief executive officers (CEOs)A believe, on average, that they are raising half or less of the money they should be able to raise.

10 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 Those same CEOs expressed optimism with a staff of 24 and an annual budget about how much their organizations’ of $3 million, as well as dramatically philanthropy will improve. All but a reducing “time in process” for major gift handful expect to raise more money in the solicitations, citing an average of less than future—but they provided little rationale one year and a 90-percent completion for this confidence other than that the rate from prospect identification to need for philanthropy is increasing and solicitation. the economy is likely to improve. We’ve seen similar results with our Hope appears to be their primary clients, first with the development of the strategy for increased success in “Core Process”—an early implementation If you do the fundraising. of Lean principles—at the Florida Hoping for better results doesn’t Hospital Foundation, which, in 2007, math, it’s work. Hospital leadership must invest in completed a $100-million campaign over clear that building an organization that focuses on goal and a year early. high-performance fundraising. investing in Do the math fundraising Adopting quality principles Most hospital fundraising programs are operations Today, hospitals are embracing process as underfunded and underperforming. And the key to improving quality, safety and although performance improvement can really costs, and they are beginning to adopt the initiatives are increasingly common pay off. quality improvement principles used in in hospitals, they are rare in hospital manufacturing, such as those employed fundraising operations. in Toyota’s “Lean” and GE’s “Six Sigma” If you do the math, it’s clear that programs. investing in fundraising operations A Lean organization strives to cut can really pay off. To demonstrate, let’s waste and increase value for customers compare investing in philanthropy not by creating an efficient flow of products with investing to build service line and services. Six Sigma is a disciplined, volume. Although profit margins vary data-driven approach to eliminate defects from hospital to hospital—with many in any process. When you combine struggling to make two or three percent— the methodologies, Lean Six Sigma for the sake of comparison let’s assume emphasizes speed, reduced waste and that your hospital is netting five percent making the best use of resources through from service line operations. a powerful data-driven system. Fundraising costs vary as well. Taking Virginia Mason Medical Center in into account development staff time and Seattle—which, in 2011, was once again associated expenses, the true cost can named a “Top Hospital” by the health be as low as 20 cents per dollar raised, care improvement coalition The Leapfrog or less, in highly effective fundraising Group—is known for applying Lean operations, to significantly higher amounts methods to improve health care services. in fundraising operations that do not yield Taking performance improvement even a good return on investment. Let’s assume further, Virginia Mason has also applied your hospital’s fundraising operation is Lean methods to fundraising—with running a 25 percent cost ratio. excellent results. Based on these assumptions, what’s The Virginia Mason Foundation was the result if we invest $1 million to raising $7 million annually in 2002 increase service line revenue and another when its health system adopted Lean $1 million to increase philanthropic as a key transformation strategy. In its revenue, and both efforts are successful? presentation at an AHP conference in Through philanthropy, you need to bring 2011, the foundation reported raising in $4 million in gifts to put $3 million $15 million to $20 million per year on the bottom line. Through service line

11 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 operations, you need to earn $60 million in revenue to get the same bottom line results. So if you put a fundraising performance improvement problems initiative in place, and it yields an additional $4 million in hope won’t cure philanthropy, you achieve the 10 same bottom line impact as increasing other revenue by Generalizations are always dangerous, but experience has $60 million—or even more, led my organization to identify these key issues: depending on the service line’s n Reliance on special events and annual giving as principal operating margin and the fundraising strategies, which results in a high cost-per- hospital’s fundraising costs. dollar raised as well as a smaller overall amount. n Foundation boards not aligned to major gift fundraising, Basics of performance which orients the program toward only smaller gifts and improvement relies on staff member solicitations. It’s difficult to boil down to a few n Executive and physician leadership not oriented to paragraphs how to apply Lean Six fundraising as a leadership responsibility, which leaves Sigma principles so fundraising the fundraising staff without the influence that executives processes are more effective and have in the community and that physicians have with effort is not wasted. Here are a few grateful patients. basic steps: • Focus on major gifts. n Cases for support that are inwardly focused on meeting A key operational and capital needs seen by management and principle of Lean is flexibly do not inspire the excitement necessary to attract high- placing resources where they dollar board members and donors. will generate the most value. Of course, you need a complete n Inadequate stewardship programs, which lead to poor pyramid of fundraising donor retention and a higher fundraising cost to acquire strategies and methods, but if new donors. you focus on maximizing your n Staff organizational structures that promote neither major gifts program you can effective teamwork nor performance-oriented significantly increase your return specialization, causing inefficient and ineffective uses of on investment. A mark of a time. high-performing operation is a n Absence of multiyear strategic development plans and revenue mix of about 80 percent performance metrics, which leads to static or declining major gifts, which in number levels of investment and little or no year-to-year make up about 20 percent of improvement. total gifts. • Define your processes for n Disconnects between fundraising operations and the relationship development from first institutions they support, which lead to inappropriate introduction through gift agreement goals and cases as well as organizational behaviors that and into stewardship. do not support a climate for fundraising success. In Lean Six Sigma lingo this is called n Lack of process, rigor and accountability resulting in mapping your value stream. wasted time, poor follow-up with potential donors and lackluster results. Essentially, you block out on paper all the key steps involved n Relatively small staffs and inadequate resources in the major gift process. Then compared to the potential that could be raised, which go back and identify all the leads to leaving large amounts of money on the table. activities that take place between the key steps. Pinpoint the steps and activities that do not bring

12 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 actual value in the process. Can any of these be eliminated? Automated? Reassigned? • Shorten the solicitation process. This equates to the Lean Six Sigma concept of cutting waste and shortening cycle time, with a “cycle” being the time from the beginning to the end of a process. In a typical fundraising operation, a development officer might have a portfolio of 130 to 150 prospects, and the time from identification to solicitation and gift acquisition could take 18 months—or even up to three or more years. If you intensify the relationship-development process—which, among other things, involves reducing the size of the prospect portfolio to around 30 good, active candidates—you can shorten the cycle time to less than a year, increasing throughput and raising more money. The essence of a successful • Develop stage-gate criteria to ensure that development officers spend time on the most likely strategy is getting the right prospects. Stages are the various phases in a process, and the gates people doing the right things. are review points between each stage where tough decisions are made about proceeding, data instead? What about things connector, one gives a gift at the reworking or stopping. If each such as routine reporting, other target level. gate has specific criteria, you can paperwork and thank-you letters? • Set multiple process measures, clearly assess when all criteria What can you do to increase with emphasis on cycle time. How have been met—and only then the number of prospect-facing many prospecting events will you move to the next stage. For each meetings per week? hold each month? How many prospect, you move through • Develop high-volume, point-of-entry connections should you make at specified stages and gates before activities and programs to create each event? How many prospects reaching the “ask”—at which abundant prospect flow into the should you be cultivating at each point, the prospect is well “pipeline.” For example, in one stage? You must establish criteria primed, and asking is only a model, the initial connector, to let you know how you’re doing, formality. often a board member, brings as well as a system for alerting • Use high-cost, scarce resources people to interesting events you when a particular measure is to do only high-value work. Good where they learn about new or isn’t being met. For example, development officers are truly initiatives or treatment advances. you can use a “dashboard” system a scarce resource. They should Some become qualified prospects where green means you’re on focus on cultivating prospects, and move through the process. track, yellow is the continuous not on making database entries. A good metric is, for every 10 improvement zone and red calls Can a clerical staffer input the people brought in by the initial for immediate attention because

13 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 can apply their experience and creativity to specific situations. You can then continuously improve that one way. The foundation of high- performance fundraising For high-performance fundraising efforts to pay off, you must have these three basics in place: • A compelling, donor-centric case. Although much has been written about the importance of developing a detailed rationale for supporting your organization, the role of the case in performance improvement tends to be overlooked. The essence of a successful strategy is getting the right people doing the right things. Achieving the right mix of fundraising methods requires the right case. Inwardly focused cases based on beneficiary needs Instead of simply measuring things at the end, such are sufficient for annual fund as how much money was raised or the total sum solicitations, but often do not inspire the excitement necessary each development officer brought in, use measures to attract high-dollar donors. • An effective fundraising board that help you see at key points whether you are on structure and composition. track for a positive outcome. Instead of the traditional small, governance-oriented board with members who have you’re seriously behind where you measure, you will build a reliable neither significant personal need to be. forecasting system. Your chief giving capacity nor the right • Measure early, and use metrics that financial officer will love you. connections, create a large, high- correlate with success. Instead of • Maintain a constant effort to performance board composed simply measuring things at the eliminate out-of-bounds process entirely of donors. Treat the end, such as how much money variance. Create your “way” of members as VIPs, offer them was raised or the total sum each fundraising, so you have a tried- inside information about what development officer brought in, and-true baseline process that is going on in the organization, use measures that help you see is ingrained in your culture. and break them into working at key points whether you are In other words, if you have councils that meet only a few on track for a positive outcome. four gift officers, you will still times a year—giving them a Not only will you get what you have one consistent way that narrowly defined, less time- your organization goes about intensive but highly valuable acquiring major gifts, instead role. Board members should be Editor’s Note: The concepts in of four different ways with “connectors” who, as defined in this article are from Hope Is numerous variations from each. Malcolm Gladwell’s book The Not a Strategy, a book under That one way should allow Tipping Point, know many people development by the author. for a clearly limited degree of in the community and are in the variance so your front-line people habit of making introductions.

14 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 • An organizational culture for in an examination of how the for better results or take concrete philanthropy. For a long time, organization regards fundraising steps to achieve them? With development professionals and makes decisions that impact an investment in performance have been talking about the philanthropy. Fundamental improvement, there is good reason necessity of having a “culture change to encourage for hope. of philanthropy,” in which philanthropy may be required, as Steven A. Reed is the chairman everyone throughout the well as significant improvement and chief executive officer organization sees the value of within the fundraising operation of Marketing Partners, Inc., which offers services philanthropy and understands itself. for businesses and their role in it. But even more High-performance fundraising nonprofits, including branding, business planning, important is focusing on making isn’t easy. It requires an investment organizational development, market research your institution an attractive and calls for changes in how and performance improvement. He is also beneficiary for those who want things are done. Hope, on the president of the company’s Performance Advantage subsidiary, which focuses on to give. Raising substantial sums other hand, allows organizations improving performance in health care requires an investment, not to maintain the status quo. But fundraising through the use of Lean Six Sigma only in terms of money but also what would you rather do, hope principles.

Celebrate your donors…

OUR SERVICES n Consultation n Professional Design n Quality Manufacture n Installation n Post Installation Support …with integrated electronic systems “The Complete Service” TYPES OF RECOGNITION n Cumulative n Capital Campaign n Room/Area Naming n Electronic n Employee/Staff n Achievement n Sponsorship/Area Naming n Donor Appreciation Gifts n In Memoriam n Plaques

WHAT ELSE? n Wayfinding Consulting n Signage Systems

Creative & Inspiring Solutions NATIONWIDE SERVICE www.brookrecognition.com [email protected] www.brookrecognition.com toll free 877-608-6987

15 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 FEATURE | By Jan W. Wood

Lost major donors 2011 The experts weigh in on why major donors leave and how to get them back

ealth care fundraising professionals see it all the time. We look through our databases and spot former major donors who no longer take our telephone calls, Hlet alone give to our health care organizations. On occasion, we try to find out why we lost them, with varying degrees of success. But more often than not, we write the donor off and concentrate on the next prospect—one who, we hope, does not have the baggage that accompanies the “lost major donor.”

16 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 And it happens to every health care 10 years? Is this number even nonprofit in every community. No matter quantifiable? what the organization’s size, mission, professionalism or sophistication, and Burk: Virtually everyone loses major despite all the best efforts of a talented donors over time. And often we fear we staff, every nonprofit loses reliable, have lost a donor when, in their minds, committed major donors. they are just waiting for the “right project” If a five percent increase in donor and they still feel committed to the retention would increase our annual organization. Our timing and theirs is contributions by as much as 50 percent out of sync, or they have not found a new over two years, as noted in Donor Centered project that has inspired them for the Fundraising by Penelope Burk, imagine next big gift. Unfortunately, it is next to the uptick in annual funds if we could impossible to quantify this phenomenon, recapture lost major donors, or even which is probably why no one has tried. better, learn from our mistakes and not lose them in the first place. According to the AHP FY 2010 Report on Giving U.S. self-assessment spreadsheet, the median amount of total funds raised in 2010 was $4,465,701 for institutions with more than 400 beds; for those with 200–399 beds, the median was $2,794,924. Using these figures, the average institution with 400+ beds would see up to $2.2 million in additional annual funding if it boosted donor retention by five percent, and the average midsize institution would see up to $1.4 million. In two decades of fundraising for a variety of sectors, I’ve never been able to Flessner: A very high percentage of find concrete statistics on the attrition organizations see major donors move rate of major donors for nonprofit on. Those giving six-figure-plus gifts are Maximize your organizations. Yet I have seen the statistical outliers by nature. They fall touch points. phenomenon of lost major donors in outside the normal donor trends because Look at your 25 my own organizations and have heard their gifts are often very personally top donors and colleagues lament the problem. I decided motivated. to go to the experts to ask for insights make sure they about how we lose, retain or reengage our Bull: The economy over the last four have at least valued major donors. years has heightened donor loss. Some seven strong By telephone, I interviewed four of the organizations have lost as much as 15 relationships industry’s top fundraising consultants— to 20 percent of their major donor base connecting Penelope Burk, Bruce Flessner, Robert because of real or perceived economic them to your Bull and Tony Poderis. With more difficulties. than 100 combined years of fundraising organization in a research and experience, these experts Poderis: When we lose a major donor, meaningful way. had a lot to say about the art and science we almost always know right away. They of major gift fundraising. tell us. When they do not tell us, we need to ask the question and leave with In your experience, what an understanding of why the donor is percentage of health care no longer interested in our organization. Q organizations have “lost” more Rejections are excellent opportunities than one major donor in the last to correct problems. Meet with the “lost

17 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012

Meet the experts

1 2 3 4 Robert Bull Jr. Penelope Burk Bruce Flessner Tony Poderis has nearly 20 years of is a nationally recognized is a principal at Bentz is a veteran fundraiser successful fundraising author and researcher Whaley Flessner and has with more than 35 years experience for nonprofit with more than 40 years served hundreds of clients of experience, including organizations, both as a of nonprofit management in more than 25 years of 20 years as director of development officer and and consulting experience. consulting. Before founding development for The consultant. He joined The She is the author of his firm, he was vice Cleveland Orchestra. Compass Group after a two best-selling books, president of the University Since 1993, he has been six-year career as a senior including Donor Centered of Minnesota Foundation, a fundraising consultant consultant with Ketchum, Fundraising, and more a role he assumed after for nonprofit institutions Inc., and has provided than 50 articles, plays and serving as the annual fund in social services, health fundraising counsel to seminars. Her firm, Cygnus director at Kalamazoo care, education, religion more than 100 nonprofit Applied Research, Inc., College in Michigan. and culture. He is the organizations. conducts research used by author of a guidebook for nonprofits throughout the volunteer and professional U.S. and Canada. fundraisers, It’s a Great Day to Fund Raise!

donor” and ask directly what you precipitated by a highly emotional Bull: Organizations and gift can do to best steward them and experience or life-changing health officers can underestimate the renew their interest in supporting scare—the “grateful patient” importance of leadership and your organization. syndrome—it goes against all the vision. Very often, when leadership trends of traditional donors, who changes, major donors feel What are the primary first give a smaller gift and then disconnected to the new leader reasons that major are cultivated to give increasingly and his or her vision. True major Q donors are “lost?” larger gifts over time. Often the donors want “big” vision—they grateful donor gives a large initial want to feel that their gifts have Flessner: 1) A bad experience gift and then decreasing amounts real impact. One of the most with the organization, such as over time. We perceive that we common mistakes by major gift poor performance, leadership are losing them when, in fact, it’s officers is being afraid to truly change or time lapse from the the natural flow of this type of think big and present the big idea experience that precipitated major donation. that requires significant money. the first gift; 2) Social reasons, such as job loss, divorce, a Poderis: Death, moving Burk: In our conversations medical issue or other change in away, kids in college and other with major donors over the circumstances and 3) Stewardship financial constraints are still years, 45 to 60 percent say “lack issues regarding how well or the most common reasons why of communication” is why they poorly the organization engages we lose major donors. These no longer feel connected to an the donor and meets his or her are circumstances you cannot organization. They do not feel well needs. Number one is unique to control and objections not readily informed about how their money health care. When a major gift is overcome. was spent. You also lose major

20 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 donors for the same reason you got them in the first place—they move on. It’s the natural cycle of Virtually everyone loses major donors over philanthropy, and not-for-profits are both beneficiaries and victims time. And often we fear we have lost a of donors’ changing priorities. We have found that if gift officers donor when, in their minds, they are just continue to communicate with waiting for the “right project” and they these donors even after they have left, they can sometimes reengage still feel committed to the organization. them as the cycle circles back to the institution’s cause or vision.

Bull: The data shows a trend the causes they used to support. charitable efforts with you. Include toward supporting fewer causes. This trend increases every year we them in stewardship efforts early Major donors are now looking conduct our research. so the philanthropic legacy to at their top four or five causes to your organization is as important support, rather than the top 10 Flessner: When it comes to them as it has been to their they supported in the booming to older major donors, never parents. economy. underestimate the importance of adult children. They will likely Burk: Turnover at the major Burk: This narrowing of influence and even take over gift officer level can be a primary philanthropic focus is especially affairs for their aging parents, cause for major donor attrition. true with middle-aged donors, and they could play a key role The average tenure for a gift who are now supporting half of in alienating their parents from officer is 3.8 years. However, a

Bliss Direct Media Your Direct Marketing Partner for the Non-Profit Community

A Bliss partnership provides you with a successful and integrated Direct Response Marketing Program through strategic and comprehensive planning.

Join us for a conversation about how we can work together to help you reach your goals. Cindy Fish | 1.877.355.7435 | [email protected]

21 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 concluded they are “lost.” These The data shows a trend toward donors often become stunning prospects for planned gifts if you supporting fewer causes. Major donors keep up the communication. are now looking at their top four or five Poderis: Stewardship is critical, but it should be multifaceted. causes to support, rather than the top 10 Bring the donor to the organization; go out to meet the they supported in the booming economy. donor; look for ways to help the donor, such as facilitating business and social contacts; find ways to new gift officer presents a special physicians or administrators, as connect donors with particular opportunity to connect with lapsed well as regular visits with the gift programs and staff; always thank donors; he or she has a clean slate officer. A common problem is that donors quickly and accurately and is able to mend fences or CEOs and hospital leaders do not for their generosity and provide provide what was lacking without speak “donor-ese,” so fundraising information about the use and guilt or worry. professionals must educate them impact of their funds and be sure about donors’ interests and needs. to recognize donors in ways they How big a role does We must help leaders understand approve of. Some people need Q donor stewardship play? that we are not just “throwing fanfare, while others would rather parties” and “having lunches”—we not have it. Flessner: In many ways it’s are enhancing our connection with most important, because it’s the the donor, which leads to future When we lose a donor, factor we can control. A strong giving. We must also teach them is our time best spent stewardship program has to go how to speak in ways that are Q trying to “get them back” beyond newsletters, mailings and meaningful and inspirational to or focusing on the next invitations to include consistent major donors, such as explaining prospective major donor? personal interaction. In a hospital how their financial gift impacts setting, for example, strong patient care. Burk: Timing is everything. stewardship of a major donor Someone may not be giving at the includes face-to-face meetings Burk: Never cut ties with same level as in the past because between the donor and key a donor even when you have they have been wooed by another RECOGNITION DONE RIGHT DONOR WALLS | HALLS OF FAME | AWARDS | SIGNAGE | DISPLAYS When it comes to acknowledging those who matter most in health care philanthropy, it’s important to do the job right. At MD Designs, we only have one goal in mind: designing, installing and supporting the perfect donor wall, plaque or signage to recognize and celebrate your success. Ask about new trends in Interactive Recognition, Eco-Conscience Materials, Style & Design!

@www.mddesigns.com @mddesignsbymetaldecor #mdbymetaldecor Celebrating Over Fifty Years of Excellence 1961-2012 1.800.637.8591

22 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 organization. But things may your needs and inspire you as a that even donors whose gift values happen with that organization to donor?” Ask the question, but do put them at the top of the list are negatively impact the relationship, not accuse or sound defensive. far less influenced by arms-length and they may become dissatisfied Ask in a sincere manner that recognition—a society lapel pin there—in which case, you may demonstrates your commitment to or a special newsletter—than by be able to reengage them if you make it right. personal stewardship. Individual have maintained your efforts relationships addressing donor to communicate. Conversely, Flessner: The reason they interests and needs are still the our research has shown that are disconnecting from your most effective means of securing a satisfying philanthropic organization should determine and retaining major donors. relationship with one not-for-profit if and how you follow up. If can lead donors to expand their they have moved on because of Flessner: Maximize your activities, both upwards—giving proximity, such as snowbirds touch points. Look at your 25 top more to the same cause—and retiring to warmer climates or donors and make sure they have outwards—supporting other not- moving closer to family, or because at least seven strong relationships for-profits. For example, donors of a long-term change in economic connecting them to your who give to a cancer program at status, it makes sense to keep them organization in a meaningful way: a hospital because of a positive on mailing lists, especially for several people in your foundation experience there may be inspired annual giving. However, cut your or development office—not just to give to the American Cancer losses in terms of the major gift the assigned gift officer—several Society or support a cancer walk. officer’s time and effort, because from your board or volunteer these folks are not likely to be leadership, and at least two Bull: We should always try and future major donors. If the issue from your administrative team, “save” the donor if at all possible, is stewardship or current interest preferably including the CEO. but often we move into action too level, reconnect quickly and The major donor should know late. Identify the signs of waning personally for the best chance of all these people by name and commitment—such as ceasing to reengaging them. They just may feel comfortable phoning them. take your calls or attend donor not be aware of all the new things The loss of a major donor can events—early enough to reverse happening in your organization often be traced back to staff or the trend. The important question that could interest or inspire them. volunteer turnover, so relationship is not “if” we should reconnect redundancy is critical. with the donor, but “how.” Too often we try reconnecting through What other words of Poderis: Remember the three events, newsletters or lunches advice do you have? basic truths of donor loyalty: 1) where we do not address the issue. Q Organizations are not entitled to Instead, the major gift officer Bull: Examine the big picture. donor loyalty—they must earn should speak to the donor on a We sometimes lose major donors it and constantly re-earn it; 2) direct, interpersonal level. Get to because we have not done a good Building donor loyalty is not the heart of the matter in a kind enough job creating a culture magic—it is simply hard work by and genuine way. “It seems as of philanthropy throughout our thoroughly prepared people and 3) though you may be feeling less organization—where all levels You don’t wait for the “right” time connected to our organization. If understand the importance of to build donor loyalty. You do it all that’s true, can you tell me why? philanthropy to the organization’s the time. What we can do to better serve success and their role in philanthropy. Jan W. Wood is the director Burk: of major gifts for the Anne Editor’s note: We gratefully Beware the perils of Arundel Medical Center acknowledge the strong support stratifying donor levels. Creating Foundation in Annapolis, of Gonser Gerber Tinker Stuhr, Md. During her 28-year and their longtime sponsorship “giving societies” based on career, she has been of the AHP Professional Paper amounts donated or demographics involved in raising funds Competition. doesn’t seem worth the time and for dozens of health care and educational nonprofit organizations and institutions. money. Our research has found

23 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 FEATURE | By Steven Rum, M.S.A., and Scott M. Wright, M.D. Teaching physicians grateful patient fundraising

Evidence shows that one-on-one coaching and follow-up by development professionals yields a high number of qualified referrals.

f the $4.8 billion that people donated in 2009 to U.S. academic medical centers, health systems and community hospitals, nearly $1 billion came Ofrom grateful patients.1 Given the strain the recession has placed on hospitals, the steady decrease in research funds from the National Institutes of Health (NIH) and leaner reimbursements from insurers, philanthropy has become increasingly important—including gifts from grateful patients. But what strategies are effective for cultivating such gifts?

Although many institutions have academic physicians’ involvement in developed guidelines that suggest ways for grateful patient fundraising. physicians to interact with patients who Because physicians interact directly offer gifts or express gratitude,2-4 evidence with patients, they are central to grateful is lacking about what really works. Thus, patient fundraising, but most physicians we conducted a study, published in have never been trained how to respond Academic Medicine in January 2012,5 to to grateful patients’ inquiries about generate data on the relative effectiveness philanthropy, nor have they learned how to of educational approaches used to increase partner with development personnel.

24 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 Finding evidence referrals than would more passive In 2008, Johns Hopkins University approaches, such as lectures or emails. concluded a nine-year capital campaign We designed a randomized comparative that generated $3.7 billion in gifts and effectiveness trial, which we conducted pledges. Of this total, Johns Hopkins in 2010 to determine which of three Medicine raised $2.1 billion, a record in educational interventions best involves Although many academic medicine.6 Afterwards, while academic physicians in grateful patient conducting a year-long review of the gift fundraising. institutions sources and making projections for the have developed future, it became clear that our institution Email, lecture and coaching guidelines that needs, but lacks, a systematic, effective “Effectiveness,” the primary outcome suggest ways method to increase the number of grateful our trial focused on, was measured for physicians patient prospects. When we searched the by the number of qualified referrals to interact literature, we found almost no empirical that participating physicians made to research into grateful patient philanthropy development professionals. We defined with patients and only anecdotes suggesting that a qualified referral as an individual or who offer gifts collaborations between physicians and family capable of making a minimum or express development professionals can result gift of $25,000 over five years. Although gratitude, in successful fundraising from grateful philanthropic fundraising can take years 7-10 evidence is patients. from start to fruition, particularly when To guide our own practices and it targets large, individual gifts, our study lacking about gain credibility with physicians and needed to fit a reasonable timeframe, so we what really institutional leaders, we set out to designed it with a three-month intervention works. generate sound evidence of approaches period and six-month data collection that work well for involving physicians period. In addition to qualified referrals, in grateful patient fundraising. An we tracked monetary gifts pledged and interactive, one-on-one coaching received for six months. relationship between a development To be eligible to participate, physicians professional and a physician, we had to have ongoing involvement in direct hypothesized, would yield more qualified patient care but no previous experience

25 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 Table 1. Characteristics of participating academic physicians (N=51)*

Physician Email Arm Lecture Arm Coaching Arm Total Characteristics N= 14 N= 18 N= 19 N= 51

Male, N (%) 8 (57%) 14 (78%) 16 (84%) 75% Female, N (%) 6 (43%) 4 (22%) 3 (16%) 25%

Age (Mean) 47 49 48 48

Race, N (%) White non-Hispanic 9 (64%) 15 (83%) 16 (84%) 78% Hispanic ** -- ** 6% African-American -- -- ** 2% Asian ** ** -- 8% Other -- ** ** 6%

Division, N (%) Cardiology -- ** ** 12% Internal Medicine ** -- ** 10% Neurology 6 (43%) 10 (56%) 10 (53%) 51% Oncology 5 (36%) 5 (28%) 4 (21%) 27%

Academic rank, N (%) Instructor / Assistant 5 (36%) 6 (33%) 7 (37%) 35% Professor Associate Professor / 9 (64%) 12 (66%) 12 (63%) 65% Professor

Years at Johns Hopkins, N (%) <5 years 5 (36%) ** 4 (21%) 22% 5+ years 9 (64%) 16 (89%) 15 (79%) 78%

*N indicates number of individuals, **Indicates ≤3 individuals (number not presented to protect participants’ anonymity) with grateful patient fundraising. philanthropy in the U.S. and physician who had a long history We targeted physicians from articles about giving in medicine. of successful fundraising at our the departments of neurology, Emails were sent weekly for three institution—having collectively oncology, cardiology and internal months. (We do not otherwise raised more than $100 million for medicine because they see their send routine emails regarding their departments. They shared patients repeatedly over time. Out philanthropy or philanthropic their own approaches and talked of 74 potentially eligible physicians, gifts to physicians.) At the start about what worked for them. 51 agreed to participate. One of the study, each physician They also presented fundamentals quarter were female, 65 percent also received a copy of the book of successful fundraising, were at or above the rank of The Millionaire Next Door: The including the importance of: associate professor and 80 percent Surprising Secrets of America’s 1) Delivering outstanding care have practiced at our institution Wealthy, 11 which presents to every patient; 2) Cultivating for more than five years. Table research on affluent Americans close relationships with patients; 1 summarizes the participating and emphasizes that it’s not 3) Listening carefully for cues physicians’ characteristics. possible to recognize many of of interest in philanthropy and Each participating physician was them by outward appearances. 4) Thoughtfully considering, in randomly assigned by a computer • Group 2, the lecture arm. advance of the discussion, answers program to one of three groups: Physicians attended a one-hour to questions that patients might • Group 1, the email arm. These training session in a hospital have about ongoing initiatives physicians received 11 email conference room and were given and philanthropic needs. messages that included news time afterwards to ask questions The presenters also discussed clippings highlighting large of the presenter. We offered three ethical considerations that emerge gifts, general information about separate sessions, each taught by a when interacting with grateful

26 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 patients, personal stories about processes for securing gifts and “Working with Steve Rum was an eye opener for me. time commitments. Participants I am usually very hesitant to approach patients about in the lecture arm received The Millionaire Next Door and the philanthropy, but while working with Steve I learned same weekly emails as Group 1. that discussing my research with the patients was • Group 3, the coaching arm. Physicians received one-on-one actually very helpful for them. Currently, we do not have training from three development very effective therapies for patients with peripheral professionals (“coaches”) with neuropathies. Discussing ongoing research from our over 70 combined years of fundraising experience who laboratories here at Hopkins as well as collaborators at worked with them individually other institutions informs my patients and gives them to prepare them to collaborate in hope about future therapies.” grateful patient fundraising. To —Ahmet Hoke, M.D. (Group 3 participant) ensure consistency, we developed a coaching curriculum (see sidebar on page 28). Coaching was initiated with a one-hour course of the three-month study. weekly emails and The Millionaire training session in a discussion- To respect physicians’ time, these Next Door. based, question-and-answer subsequent contacts were brief, To receive referrals, we asked the format, followed, flexibly, by in- focusing on identifying prospects participants to think about patients person meetings, phone calls and and reinforcing the curriculum’s they had seen in the past three to emails—an average of 15 separate content. Physicians in the six months who might be donor contacts per physician over the coaching arm also received the prospects. Physicians provided

27 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 Coaching patients’ names to the development professionals either by telephone, curriculum email or conversation. The and approach development team then researched each referral to verify a match with Our coaching was modeled after the same principles as the qualification criteria. We were investment coaching from a careful to conform to U.S. HIPAA financial advisor or fitness (Health Insurance Portability and coaching from a trainer— Accountability Act) requirements teaching the physicians about best practices in fundraising for confidentiality.

and providing specific tips, tools and insights. We taught them Key findings how to look for hidden cues that a person is interested in their research, such as asking, “What is your research about?” as We found that when development well as signs that, despite outside appearances, a person has officers spend one-on-one time wealth, such as mentioning, “I’ll be away at my summer house with physicians to teach them in Paris.” We also emphasized the importance of tapping a fundraising best practices and how potential donor’s passions and personal experience—which, to recognize potential grateful in the case of grateful patients, could be, “I’m grateful for the donors, they are more likely to good care I received and I want to learn more about related collaborate with the development research.” team and provide qualified Here are the curriculum topics we covered: referrals. • Overview of philanthropy at our institution (general level). • In the coaching arm, 17 of 19 • Factors that motivate people to give, such as having a physicians, or 89 percent, referred personal experience that helps them relate to your goal. one or more qualified potential • Cues possibly indicating that an individual may want to offer donors—an average of 2.1 financial support. qualified referrals per physician. • The difficulty in trying to guess who has giving potential. Altogether, these physicians • Ethical considerations regarding asking for money while a generated 63 referrals, of which person is under your care. 41, or 65 percent, were deemed • Barriers to fundraising and strategies for overcoming to be qualified. Within the study obstacles. period, these referrals led to five • The value of stewardship. separate gifts totaling $219,550. • Action plans for specific next steps. • In the lecture arm, physicians made a total of three qualified

Donors. Dreams. Capital Campaigns Campaign Planning Studies We’ll take you there. Development Assessments Foundation Implementation Annual Giving Programs Planned Giving Programs Best Practices Research

4000 Faber Place Dr. • Suite 130 • Charleston • SC 843.853.9999 • www.corporatedevelopmint.com

28 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 from Patients to Physicians. American Medical Association. http://www.ama- referrals, all within two weeks of regularly to promote accountability, assn.org/resources/doc/code-medical- the lecture, and no new gifts or is a successful approach to ethics/10017a.pdf. pledges resulted. help doctors raise gifts that are 4. American Medical Association. (2003). • In the email arm, physicians important to their work. Our major Code of Medical Ethics. Opinion 10.017 - Gift from Patients. http://www.ama- made no qualified referrals. suggestions are: assn.org/ama/pub/physician-resources/ The coaching method, applied • Deploy development professionals medical-ethics/code-medical-ethics/opin- to randomly selected physicians as one-on-one coaches to bring ion10017.shtml. 5. Rum S., Wright S.M. (2012). A ran- who lacked prior experience with about behavioral changes among domized trial to evaluate methodologies philanthropy, yielded impressive physicians. for engaging academic physicians in results, but even more exciting • Ensure consistency of grateful patient fundraising. Academic Medicine 87, no. 1; 55–9. is the greater success possible if interventions through a 6. The Foundation Center. (2009). Johns we can involve the most beloved standardized curriculum and Hopkins capital campaign raises near- physicians or those with the training approach, especially when record $3.7 billion. Philanthropy News highest satisfaction ratings from diverse development professionals Digest, January 26. 7. Roberts, L.W. (2006). Ethical phi- their patients. at various institutions are lanthropy in academic psychiatry. Am J The skills and techniques that involved. Psychiatry 163; 772–8. physicians learned in the coaching • In educating physicians, share real 8. Barr, P. (2005). Gift wrapped. Hospitals, health systems work to make arm continue to have an impact. success stories of gifts made to the donations a larger portion of the bot- In the last fiscal year, after our institution and how the process tom line. Modern Healthcare 35, no. 19; study was completed, faculty in was shaped. 28–33. 9. Elj, T.J. (2007). Grateful patient pro- the neurology department made • Help physicians understand how grams: current trends, strategies, and tac- 150 referrals of potential donors, to listen for clues that the issue tics. AHP Journal Spring; 8–17. whereas this same group made of philanthropy can be raised, 10. Shinkman, R. (2001). The science of approximately 15 referrals just such as when a patient expresses giving. Modern Healthcare 31; 44–8. 11. Stanley T.J, Danko W.D. (1996). The two years earlier—a 900 percent interest in the physician’s work or Millionaire Next Door: The Surprising increase in activity. asks questions about what’s being Secrets of America’s Wealthy. New York: Now, part of each department’s done about the disease in general. Pocket Books. work plan at Johns Hopkins The doctor can then mention Medicine is to measure the number that lack of funding for his or her Steven Rum, M.S.A., is vice of interactions between physicians project is an obstacle to success. president for development, and gift officers as well as the • Have development officers and Johns Hopkins Medicine, number of referrals of potential physicians work together on The Fund for Johns Hopkins Medicine, donors so that these metrics can a regular basis to identify and Baltimore, Md. He was be reported to the clinical director qualify potential donors and previously vice chancellor at the end of each year. Clinical follow up with them. for development and alumni affairs at Duke University Medical Center and assistant directors incorporate development vice president and chief operating officer activity as part of the annual review References at the Children’s National Medical Center of their physician group. 1. Association for Healthcare Foundation in Washington, D.C. His Philanthropy. (2010). FY 2009 AHP professional fundraising career began with the Special Olympics International. Suggestions for success Report on Giving—U.S. 2. Johns Hopkins Development Having “philanthropic coaches” and Alumni Relations. Impact of Scott M. Wright, M.D. is who guide physicians through Philanthropy. http://www.giving.jhu.edu/ , impactofphilanthropy. professor of medicine, sound principles and skills, and Division of General 3. Council on Ethical and Judicial Affairs. Internal Medicine, Johns who check in with physicians (2003). CEJA Report 4 - A-03. Gifts Hopkins Bayview Medical Center, Johns Hopkins Author’s Note: The study this article is based on was supported by a grant from the Osler University School of Medicine, Baltimore, Md. He is also director Center for Clinical Excellence and by the Miller-Coulson family, who partially funded of the Miller-Coulson Academy of Clinical the efforts of Scott Wright, M.D., through a Miller-Coulson Family Scholar grant. Excellence, which seeks to recognize The authors wish to thank Edward Miller, M.D., Patrick Walsh, M.D., Walter Stark, exceptional clinicians. His work has been M.D., Morton Goldberg, M.D., Kim Morton, Chuck Turner, Kathy White and Jane published in leading biomedical journals Wheeler for their efforts and support of this project. Additionally, Martina Grunwald, including New England Journal of Medicine, Ellen Stifler, Michael Zini and the staff from the Fund for Johns Hopkins Medicine JAMA, Annals of Internal Medicine and American Journal of Medicine. were critical to the project’s success.

29 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 FEATURE | By William Marty Martin, Psy.D., M.P.H., M.A., M.S.

Community benefit: Friend or foe? Both philanthropy and community benefit must be part of the strategic plan for nonprofit health care organizations.

f you’re part of a nonprofit health care organization, here’s a question some of your potential donors may struggle with: Does this hospital need my money when it is giving Iaway money as part of its community benefit program? 30 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 Maybe donors become confused when Form 990 Schedule H. The form’s purpose they receive a request for a contribution is to give the agency a more accurate picture and then read in the news how much of the nonprofit hospital sector and help it free care, medical education and funded assess nonprofit institutions’ compliance research your health care organization with the community benefit standard. has donated to the community. Or maybe Schedule H asks for information on they drive by your brand new, state-of-the the cost of charity care, unreimbursed art facility and wonder why the doctors’ Medicaid, health improvement services, parking lot is full of BMWs, Mercedes health professions education, research, and Jaguars—and hardly any Hondas or contributions, activities that address the Fords. root cause of community health problems Donors who are especially savvy and bad debt expenses. According to a may search websites such as GuideStar study published in 2009 about the effects (www.guidestar.org), which gathers and of filing new community benefit reports in publicizes information about nonprofits, Maryland,3 which has had requirements and learn how much your health care similar to those in Schedule H since organization contributes to charity care 2004, officials remain uncertain about and community benefit, as disclosed how to classify community benefits and on the new U.S. Internal Revenue they tend to adopt a managerial approach Service (IRS) Form 990 Schedule H or to charitable activities by focusing on the Canada Revenue Agency (CRA) complying with requirements rather than Form T3010-1. Which, of course, may commitment. They take a short-term trigger the question that kicks off this accounting view that looks at profit or article—and prompts me to ask you this: loss rather than emphasizing a long-term Are community benefit and health care investment in the community. philanthropy in your organization friend The U.S. Patient Protection and or foe? Affordable Care Act (PPACA), signed Linking According to the American Hospital into law by President Barack Obama on executive Association, the U.S. has more than March 23, 2010, and largely upheld by the compensation 5,700 hospitals, and of these, 2,900 U.S. Supreme Court on June 28, 2012, 1 with community are nongovernmental nonprofits. will have a considerable effect on the health goals can This article explores the relationship community benefit programs of nonprofit between community benefit and health health care organizations because the demonstrate care philanthropy in U.S. nonprofit estimated 30 million people without organizational institutions, including the ways they are health insurance—many of whom have commitment at sometimes at odds, and how they can received charity care—will have coverage to community complement each other. by 2014. The law calls for opening state needs. health insurance exchanges, expanding of The community benefit Medicaid and providing federal subsidies landscape to pay for premiums. The Catholic Health Association of the United States defines community benefit Fundraising becomes essential as “programs and services designed to As the Wall Street Journal reported on improve health in communities and August 8, 2011, nonprofit hospitals’ increase access to health care.”2 Nonprofit revenue is growing at the slowest rate in 20 hospitals must provide a community years—a four percent median growth rate.4 benefit to qualify for tax exemption under Given the increasing financial pressure section 501(c)(3) of the U.S. Internal these institutions are facing, fundraising Revenue Code. In the past, the types of is becoming more important than ever. activities that qualified as community According to Jane Haderlein, vice president benefit were not clearly delineated, but the of philanthropy at Huntington Hospital, IRS changed that in 2009 by introducing “Philanthropy was once considered simply

31 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 ‘nice to have,’ but discussions major gifts (17.1 percent), capital benefit programs and conflicting regarding the role and strategic campaigns (15.4 percent), special messages being sent to the public. imperative of philanthropy can events (14.8 percent) and planned A key problem is that far too now be heard regularly at both the gifts (9.5 percent). The donated many health care organizations management and board levels.”5 funds were used for construction fail to include health care Now, she said, nonprofit hospitals and renovation projects (22 philanthropy in the strategic see fundraising as essential to their percent), new and upgraded plan.8 In my experience as a health survival. As an example, plastic equipment (20.6 percent), general system board member and former surgery departments in academic operations (17.6 percent) and hospital executive, this failure institutions are establishing formal community benefit programs (10.7 extends to community benefit, philanthropic efforts to support percent). too. Community benefit and education, research and clinical health care philanthropy must be programs.6 Inclusion in strategic priorities that are clearly The amount that nonprofit strategic plans delineated in the strategic plan, hospitals and health care systems In times of declining revenue, operational plan and budget. raised in FY 2010 increased eight internal competition for limited When you examine these three percent over the previous year, resources increases, including documents, you should be able according to the FY 2010 AHP competition for money, time and to see that community benefit Report on Giving—U.S.7 Overall, staff. Also, development staff and philanthropy support each $8.3 billion was raised in FY 2010. may report to entirely different other, rather than compete for The report found that nearly 60 leaders than staff involved in resources. Unfortunately, I’ve percent of the total dollars raised providing community benefit found that these initiatives often came from individual donors. The programs—which can result in are not aligned—and are not even largest source of funds was annual lack of coordinated effort between included in the strategic plan. giving (20 percent), followed by the philanthropic and community Another issue is the failure of Hospital Ad 7 x 4.583 final_Layout 1 9/8/11 11:57 AM Page 1

The right direction for healthier fundraising

Are you looking for more effective ways to maximize your fundraising revenue? Carl Bloom Associates is an expert in individual giving – cultivating donors in the communities you serve. And we use every available tool – direct mail, telemarketing, email and the internet – in pursuit of one goal: building a valuable, long term, stable source of revenue. Call or email us – or visit us on the web – to see how CBA can dramatically increase your hospital's or clinic's support, as we have for hundreds of organizations for more than 35 years.

81 Main Street, Suite 126 EMAIL: [email protected] White Plains, NY 10601 WEB: carlbloom.com/healthcare PHONE: 914 468 8949

32 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 executive performance indicators and compensation to be tied to philanthropy and community benefit. During my years as a human resources professional in health care, as a member of a large health system’s executive compensation committee and as a graduate educator in compensation, I’ve found that executive compensation is where Culture can the rubber hits the road in terms of promote alignment how well aligned the organization’s mission, values and strategies are Organizational culture can make it difficult to align with day-to-day decision-making fundraising and community benefit with strategic priorities. and resource allocation. Executives Organization development consultants have a saying, largely follow the incentives that “culture kills strategy,” which means that the way an are put in place by executive organization makes decisions and allocates resources is compensation committees. often in opposition to its articulated mission, strategies and According to a 2009 values. National Center for Healthcare In a 2006 article in Health Affairs, Jane Haderlein points out the power of chief executive officers (CEOs) to Leadership report, Navigating in mobilize leadership and staff to build an internal culture of a Shifting Executive Compensation philanthropy. Among her suggestions: Environment, “Increasingly, • Write articles and op-ed pieces from the CEO about the critics of executive compensation importance of philanthropy in the community. are questioning the perceived • Include fundraising performance on dashboard disconnect between compensation measurements, similar to the way scores are tracked for packages and organizational 9 patient satisfaction. results and community benefit.” • Mention at internal meetings and public appearances the The report recommends that, important role of philanthropy in helping the organization when health care organizations fulfill its mission. determine incentives and adjustments to compensation, “the process should heavily weight mission attainment and community benefit outcomes as well as financial viability.” Goal alignment appropriate resources to address An article in Health Progress The hospital board and senior them. looking at the role of governance leadership must view community • Improving health outcomes at the in managing community benefit benefit and health care individual, family, community recommends that chief executive philanthropy not as two separate and population health level. officers (CEOs) be accountable organizational functions but as to the board for community two institutional resources which, Examples of health care benefit activities and that specific together, can help achieve strategic institutions that align philanthropy criteria for improving community hospital-wide goals. Such goals may and community benefit with health status be included in the include: strategic goals are not easy to CEO’s performance review.10 • Raising financial capital and social come by. One good example is “Linking executive compensation resources, such as expertise for the Children’s Hospital of Orange with community health goals public good. County (CHOC), which has can demonstrate organizational • Identifying common needs “Focus on Financial Stewardship” commitment to community among diverse stakeholders in as one of its six strategic goals. needs,” the authors state. the community and allocating The goal says, “The ability of

33 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 CHOC to execute on current and improvement initiatives in the (2009). The accountability of nonprofit hospitals: Lessons from Maryland’s com- future initiatives is contingent categories of primary health munity benefit reporting requirements. on achieving financial targets in care, health screening and Inquiry 46; 122–139. areas such as profitability, bond prevention, centers of excellence 4. Mathews, A.W. (2011). Hospitals Put ratings and philanthropy. Through and disease management and on Sick List. Wall Street Journal, August 10. efficient management of resources health innovation, education and 5. Haderlein, J. (2006). Unleashing the 14 and an emphasis on philanthropy, research and development. untapped potential of hospital philan- CHOC will further reinvest There are many reasons thropy. Health Affairs 25, no. 2; 541–5. 6. Bentz, M.L., Ahmad, J., and Rohrich, in its facilities, programs and why community benefit and 11 R.J. (2011). Fundraising and philan- capabilities.” philanthropy must be friends who thropy in plastic surgery: an essential Catholic Health Initiatives, work collaboratively for the good tool for academic excellence. Plastic and Reconstructive Surgery 127, no. 5; a national nonprofit health of the institution and the people 2108-12. organization headquartered it serves. Both efforts do the 7. Association for Healthcare in Colorado, has “creation of following: Philanthropy. (2011). FY 2010 AHP healthier communities” as part of • Place an emphasis on complying Report on Giving—U.S. (www.ahp.org/ 12 reportongiving) its mission. In 1996, it established with the legal and regulatory 8. Spaeth, R.G. (2004). The CEO’s role a Mission and Ministry Fund aspects of nonprofit and tax- in healthcare philanthropy. Healthcare through which it awards grants to exempt status. Executive 19, no. 6; 35–6. 9. Cotter, T.J. (2009). Executive Action serve disadvantaged populations, • Concentrate their efforts on the Series: Navigating in a Shifting Executive help improve health and prevent interface between the internal Compensation Environment. National violence. Over the years it has organization and the external Center for Healthcare Leadership. (http:// nchl.org/Documents/Ctrl_Hyperlink/ supported hundreds of projects, community. doccopy5731_uid532012321522.pdf) including reducing congestive • Rely heavily on disseminating 10. Evashwick, C.J., and Gautam, K. heart failure readmission rates in information about the health (2008). Governance and management London, Ky., and improving the care organization’s role as a of community benefit. Health Progress, September-October; 10–15. safety of a playground in Oakes, steward of organizational and 11. CHOC Children’s Community N.D. community resources. Benefit Plan. (2009-2010). Children’s • Demonstrate to stakeholders Hospital of Orange County. (www.choc. Ways to be friends org/about/CommunityBenefitPlan.pdf) that their respective functions 12. Catholic Health Initiatives. (2011). Both of the institutions cited provide a benefit in return Mission & Ministry Fund 15 Years. above provide examples of how for taxes not paid and money (www.catholichealthinit.org/documents_ public/Mission%20and%20Ministry%20 philanthropy and community received from donors. Fund/MandM%2012-6e.pdf) © benefit can be friends, not foes. • Engage with external 13. Staff report. (2012) Parkview hospital Another is the Parkview Hospital stakeholders using influence donates $500,000 to health partners. FW Foundation, part of Parkview and collaboration rather than Daily News. January 17. (www.fwdai- lynews.com/index.php?option=com_ Health in Indiana, which command and control. content&view=article&id=15675) coordinates the Community Although they are separate 14. Parkview Health. (2012). Community Health Improvement Program efforts, community benefit and Health Improvement. (www.parkview.com/foundations/ and was established in 1998 health care philanthropy should communityhealthimprovement/Pages/ to provide support to the come together as two interlocking welcome2.aspx) community through collaborative pieces to address the health partnerships. In 2012, Parkview and well-being of individuals, Hospital donated more than populations and communities. Dr. Marty Martin is director $500,000 to organizations such and associate professor in References Health Sector Management as Cancer Services of Northeast at DePaul University. He Indiana’s client advocate program 1. American Hospital Association. (2012). also has significant board Fast Facts on U.S. Hospitals. (www.aha. experience in different and Super Shot Inc.’s children’s org/research/rc/stat-studies/fast-facts. 13 types of organizations. immunization program. Each shtml) His research interests include population hospital in the Parkview system 2. Catholic Health Association health, community health, workforce of the United States. (2012). diversity, disruptive behavior and health gives back 10 percent of its Community Benefit. (www.chausa.org/ technology. Dr. Martin has consulted with annual operating surplus by communitybenefit/) numerous organizations domestically and carrying out community health 3. Grey, B.H., and Schlesinger, M. internationally.

34 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 FEATURE | By Dan Buck

Rally visits with a patient at the SSM Cardinal Glennon Children’s Medical Center. A cute, cuddly squirrel leads to a great idea What better charitable match-up than a beloved mascot and the kids of SSM Cardinal Glennon Children’s Medical Center?

here were “sightings” in past seasons at Busch Stadium in St. Louis, Mo. Then, the break-out event. It was the fifth inning of Game Four in the 2011 National League DivisionT Series: A squirrel darted across home plate, launching the St. Louis Cardinals comeback rally against the Philadelphia Phillies. It ignited a love affair between St. Louis baseball fans and a common, gray squirrel aptly named Rally.

35 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012 Before Game Five on Friday, October 7, 2011, Cardinal Glennon Children’s Foundation communications manager Rose Fogarty was wrapping up her day when I came to her with an idea. I wanted to create a way to donate to the SSM Cardinal Glennon Children’s Medical Center through Rally Squirrel charity apparel, including shirts, hats and trading cards. What better charitable match-up than a cute, cuddly squirrel and Cardinal Glennon kids? Long-time Cardinal Glennon supporter Anheuser-Busch was on board by Sunday with a $30,000 grant. In roughly two days, we had produced Left to right: Dan 5,000 t-shirts and Foundation staff days, the Foundation staff decided that Buck, patient Lauren worked feverishly to create an in-house Rally fever would continue through the Lee, Dave Peacock, distribution center. World Series—with a new shirt. The new former president of We recruited 12-year-old Hodgkin’s “Squirreled Serious” shirt depicted a more Anheuser-Busch, and hospital mascot lymphoma survivor Lauren Lee as Rally fearless Rally Squirrel with his foot firmly Rally Squirrel. Squirrel’s spokesperson. Lauren unveiled planted on home plate. Rally’s charity apparel on local television I believe that the spirit of Rally Squirrel stations at 7:30 a.m. that Monday was sent from God. Every member of the morning. Foundation was involved throughout this The first shipment of Rally Squirrel entire effort and we were certain we were In just merchandise to 12 locations sold out in getting divine support. four days, 45 minutes. The next shipment sold out Soon after the Cardinals captured the Rally Squirrel’s quickly and my Foundation team realized World Series championship, Rally and that keeping up with the enthusiastic Lauren appeared in front of Anheuser- charity apparel demands of Cardinals fans was not going Busch Headquarters atop the Clydesdale- generated more to be easy. drawn wagon, announcing the grand total than $150,000 In just four days, Rally Squirrel’s raised: a whopping $470,000. By the time in donations. charity apparel generated more than the playground opened on April 12, 2012, $150,000 in donations. With this news, that number had grown to $500,000. Rally decided that it was time to visit his The Cardinal Glennon Children’s biggest fans—patients and families at the Foundation is continuing its charity medical center. Rally strolled through the efforts through its new Homers for Health child patient rooms, giving out trading program, in partnership with the St. Louis cards and hugs. Cardinals. For more information, visit us Rally keeps spirits high at www.glennon.org. After this visit, Rally knew he needed to Dan Buck is the executive director of Cardinal do something to keep the patients smiling Glennon Children’s when he wasn’t around. He announced Foundation at SSM that the money raised would be used to Cardinal Glennon Children’s Medical Center. Each year, build an outdoor playground at the medical the Foundation raises more center. With this, Rally declared himself than $11 million to help more than 200,000 children needing specialized pediatric care. the official mascot of the medical center, Prior to joining SSM Cardinal Glennon, Buck which made staff and all the kids erupt served for eight years as chief executive with joy and anticipation. officer of the St. Patrick Center, the largest homeless services agency in Missouri. After the adventures of Rally’s first 12

36 | HEALTHCARE PHILANTHROPY JOURNAL / Fall 2012

Helping Extraordinary Hospitals Do More Good...

CCS helps Healthcare Institutions realize their fundraising potential. Our firm creates sustainable development programs through best-in-class services, including feasibility studies and assessments, campaign planning and management and major gift initiatives. The CCS team also brings expertise in benchmarking, analytics, strategic planning, leadership development, custom learning and social media to all of our engagements.

Let CCS help you surpass your development goals. 800.223.6733 | www.ccsfundraising.com | [email protected]