Amid worries about the future, giving to hospitals goes up, slowly

Uncertainties about the economic recovery and health system reform make contributors hesitant to commit larger amounts for longer periods.

By Victoria Stagg Elliott — Posted March 28, 2012

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Charitable giving to nonprofit hospitals and health systems increased in fiscal year 2010 as the economy continued its gradual recovery. However, a dampening of pledges for future money attributed to ongoing uncertainty and expected decreases in payments from public and private payers means that physicians may not have funding for research projects and newer facilities.

“There are going to be fewer dollars for capital improvements, and physicians may see a falling off of donor support for research projects,” said Bill McGinly, PhD, president and CEO of the Assn. for Healthcare Philanthropy.

Money donated to nonprofit medical entities in the U.S. and Canada grew 8% from $238 million in fiscal year 2009 to $258 million in 2010, according to the organization’s annual report on donations, released March 6. Numbers for production, which measure cash donations and pledges for the future, grew by only 3%, from $280 million in 2009 to $288 million in 2010.

Anecdotal evidence suggests that pledges were stretched for smaller amounts over longer time spans than in the past. The report noted that planned giving in 2008 comprised 17% of total revenues of nonprofit health care institutions, with an average gift size of $100,000. In 2010, planned gifts declined to 14% of annual revenue, with the average gift size shrinking to $58,747. The AHP report is available by contacting the organization; it is not online.

“People are pulling back and delaying even in making a commitment,” McGinly said. To compensate, organizations held more special events such as galas, golf tournaments and community walks.

“In the long term, if production growth continues to remain flat, then we might expect declining cash revenues in future years,” the report concluded.

Researchers say these trends are driven by questions about the sustainability of the economic recovery, the implications of the Patient Protection and Affordable Care Act and the status of health care institutions’ tax-exempt status, which has been challenged in some areas because of questions about whether they provided a sufficient amount of charity care.

Other documents also have suggested that charitable giving is tepid. Sixty-five percent of the 875 charities surveyed were faced with increased demand for services, but 28% had raised less money in the first nine months of 2011 than the first nine months of 2010, according to the Late Fall 2011 Nonprofit Fundraising Study, published by a half-dozen organizations, looking at health and nonhealth nonprofits. An additional 31% said fundraising was the same, but 41% reported growth (link).

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