Many health care organizations scaled back on fundraising efforts and reduced the size of their foundation departments after the 2008 financial crisis, but those who bucked this trend found great opportunity.
One organization that reaped the benefits was Children's Hospitals and Clinics of Minnesota. By transforming its practices, the organization grew its annual fundraising more than fivefold in just seven years and completed the largest capital campaign in its 90-plus-year history.
Despite a brighter global financial picture, intense competition for philanthropic funding continues. Children's believed it was more important than ever to rethink fundraising practices. It took a two-pronged approach to accelerated growth and long-term organizational viability and innovation.
Taking a "Science and Art" Approach
To ensure extraordinary donor engagement that results in truly transformational philanthropy, organizations should balance the science and the art of fundraising.
The science. The science of fundraising involves aligning with organizational priorities, forming a major gift leadership structure, and establishing a methodical donor engagement process that can be highly customized.
Fundraising initiatives should match an organization's strategic planning. Board champions, executives and clinical leaders need to be in agreement. In addition, organizations should create business plan priorities, including tracking return on investment.
An uncertain environment doesn't justify cutting back foundation staffing. Instead, it's essential to maintain or increase this staffing. Foundation leaders should identify service line responsibilities and use carefully defined project measurement dashboards and prospect management processes that will hold fundraising personnel accountable.
Major donors require unique, highly customized experiences and thoughtful partnerships. Organizations should establish donor engagement plans that include extraordinary experiences, appropriate solicitation plans, stewardship and gift celebration, and more. However, no one plan should ever be the same as another. The most effective are highly personalized to create more authentic meaning and stronger partnerships.
The art. While the science of engagement provides essential structure to fundraising teams and donor relationships, the art is what allows organizations to build deeper, more effective relationships with potential major donors.
Gift officers should go beyond getting to know a donor's background, experiences and motivation for giving; they must form authentic, strategic and lifelong partnerships with potential donors. This means understanding when a donor is asking to create more than a transactional gift, and using intuition to follow the donor's generosity.
Employing Philanthropy Trends
While the science and art of philanthropy can bring tremendous benefit to an organization, it's essential to know the current environment and to take advantage of the latest trends.
Strategic investor philanthropy. Today's donors want to know that they support an organization that's achieving something important in an effective, efficient and accountable way. They also expect that the relationship will go beyond simply writing a check. To help donors track the impact of their gift, engage clinical and operations staff in advance to determine the best way to report back to donors and be accountable. For major donors, consider developing a detailed business plan that outlines the hospital system's intended approach to achieving a goal that aligns with the donor's area of interest.
Leadership. Great leaders help create a generous culture. Consider the Giving Pledge, which was started in 2011 and now includes a list of more than 125 billionaires who have pledged to give the majority of their wealth to philanthropic causes. While health care organizations do not have a list of billionaires behind them, most have great volunteer and philanthropic partners who can be leading advocates on their behalf. Peer referrals have been shown to garner a 70 percent success rate for initial major gifts, compared with only 30 percent success among those that come from the field. Board members, volunteers and task force members can be powerful voices of support to identify and cultivate future donors or board members.
However, the traditional board and volunteer recruitment considerations such as net worth, corporate leadership and community visibility are no longer sufficient.
In contrast to the typical approach in which a nominating committee meets at designated intervals and recruits to fill board vacancies, hospital systems must establish a multiyear recruitment plan through which they continuously seek future board members. In addition, a disciplined recruiting and on-boarding process is necessary to ensure that candidates have a deep commitment to the mission of the hospital; view their role as a calling, not just a title; and act as role models, door openers and ambassadors who cultivate other strategic relationships on the hospital system's behalf.
Fast philanthropy and embedded giving.A key piece of executing fundraising — for all donor levels — is being present in the places, interactions, devices, social channels and relationships that make up the donors' lives. Operating beyond the hours of 9 a.m. to 5 p.m., creating tailored content for the social channels that donors use, and taking part in broader community conversations and issues are essential to staying top of mind, engaged and responsive to existing and prospective donors.
When Children's Hospitals and Clinics of Minnesota established goals for the recently completed Delivering Next Generation Care campaign, the team knew that its customary approach to fundraising — which had yielded $4 million to $5 million per year in the past — would need a fundamental shift.
The science and art of philanthropy philosophy, coupled with understanding significant trends, has proven to be an effective framework for the organization, contributing to the success of its capital campaign and positioning it to respond to other trends and industry shifts.
From 2007 to 2013, Delivering Next Generation Care campaign secured $168.7 million in philanthropic gifts — 13 percent ahead of its aggressive initial goal. Most importantly, the campaign powered the hospital system to complete a $300 million renovation and expansion to support future innovation, research and advancements in pediatric health care.
Health care will continue to undergo tremendous shifts. When those shifts are employed in conjunction with clear business priorities, they can be both the spark that drives organizations to adapt their fundraising practices and the momentum that makes philanthropy and fundraising campaigns key factors in overall organizational success. When leaders approach philanthropy through this strategic framework and through a tactical approach guided by the art and science, it becomes a powerful way to differentiate an organization among patients and future donors, and it positions hospitals and health care systems for further growth and success.
Theresa Pesch, R.N., is the president of Children's Hospitals and Clinics of Minnesota Foundation in Minneapolis. Michael Ciresi, J.D., is the chair of Children's Hospitals and Clinics of Minnesota Foundation board of directors, and a partner of Robins, Kaplan, Miller & Ciresi LLP in Minneapolis.