Donations to health care institutions drying up

One effect of the recession is that those who usually make charitable contributions to nonprofit hospitals and other health care institutions are keeping a tighter hold on their wallets.

An increasing number of pledges are going unfilled, and donated stocks have become less valuable, according to a report issued Oct. 26 by the Assn. for Healthcare Philanthropy.

"People are still supporting the institutions they care about, but they are giving less," said AHP President William C. McGinly, PhD.

This analysis of data on 220 institutions showed that $8.588 billion was raised during fiscal 2008. This represented an increase of 2.9% from the $8.347 billion donated in fiscal 2007. Inflation, however, was 3.8%. Prior-year increases were 5.6% in 2007 and 11.5% in 2006.

The philanthropy group said the report is of particular concern because many institutions closed their 2008 books in September, before the full scale of the economic downturn became apparent. Institutions that wrapped up their fiscal year in December 2008 saw a 0.2% decline in donations.

"Things are difficult out there," McGinly said. "And it's clearly about the economy."

The number of pledges also went down 6.2%, while those that were unpaid grew 12.9%. Most donations are in cash, but the proportion of securities given dropped from 4.8% of total funds raised to 3.0% because of declines in the stock market.

Academic institutions and children's hospitals remained the most successful fundraisers, even in a recession, although how funds were allocated changed slightly. The proportion used to provide charity care remained the same. Less was spent on construction, renovation, research and teaching.

Previous reports also indicated that charitable giving, including those to health-related nonprofits, was declining in this economy. An American Hospital Assn. survey released April 27 found that 40% of hospital CEOs were noting a moderate or significant decrease in this philanthropy. Another released June 10 by the GivingUSA Foundation reported that charitable giving as a whole declined 2% from 2007 to 2008.

The bulk of AHP's members are hospitals, although the organization also includes nonprofit health organizations and long-term-care facilities.