Why it’s hard to raise funds for hospitals

I’ve been helping nonprofit hospitals with their fundraising for a lot of years. It’s hard work. And it routinely brings in less response than other fundraising sectors.

There are a number of reasons for this, some of which you can’t do anything about. Please note that I’m talking specifically about hospital fundraising in the US. The challenges in other countries are different. Here’s what they are:

One audience, two messages

Marketing healthcare and fundraising for healthcare use very different types of messages: marketing of a hospital needs to emphasize that the organization is superhuman, able to save your life. Fundraising is different, making the donor and the organization partners in doing something great.

Trouble is, you’re talking to the same people for both. Often the same people (or their bosses) do both marketing and fundraising — and they don’t understand the difference. This often leads to “give because we are awesome” fundraising. Which doesn’t work very well. Donors can easily take that as, “they don’t really need me.”

Marketing and fundraising should be done by different people, or at least by people who thoroughly understand the difference between the two.

Fundraising is a minor source of revenue

Even the most charity-driven of hospitals gets a lot more revenue from insurance billings than from philanthropy, which adds up to a small percentage of overall revenue. That makes fundraising unimportant, getting less emphasis and less support from leadership.

If a hospital needs philanthropy dollars (and it usually does), they should raise funds like they mean it!

HIPAA

That is, the Health Insurance Portability and Accountability Act of 1996. Don’t get me wrong — as a patient, I have no problem with HIPAA. It prevents a lot of abuse.

But HIPAA regulations keep us from talking in a relevant way to patients who might become donors. You can’t talk to cancer patients about their cancer care. You can only say vague things about the importance of the care they got.

Bad experiences

It’s no secret that the US healthcare system is a hot mess. And it’s patients who bear the brunt of the messiness. As a recent hospital patient, I’m right in the middle of it: a seemingly endless stream of “nickel and dime” bills (where the nickel is $5,000 and the dime is $10,000) with no clarity that insurance will cover any of it. If you have less than great insurance, it’s frightening. And you feel victimized by your hospital, just when you might have been feeling grateful for what they did for you.

Until there are meaningful system-wide changes, this is going to be a millstone around the neck of hospital fundraising.

Bad branding

The nickel-and-diming gives many hospitals a bad reputation. Add to that the occasional news story about aggressive billing practices. This can lead to a widespread belief that the hospital is a money-grubbing, inhuman institution. Who wants to donate that that?

You can’t change some of these factors. But you can mitigate some of them in your fundraising. But knowing what you’re up against can only help.


Comments

4 responses to “Why it’s hard to raise funds for hospitals”

  1. Jeff,
    Having worked in advancement for two academic medical centers and two smaller community hospitals back in the day, I can tell you that one of the primary reasons for the difficulties in productive fundraising today for healthcare institutions, particularly the so-called “nonprofit” or “charity” institutions, is that they are increasingly viewed as anything but “nonprofit” or “charity” organizations.
    As the hospital/healthcare sector continues to contract into networks of enormous, corporate entities, people see them more and more as simply that … corporate entities or businesses that provide care.
    It’s doubtful that even the most talented of communications/marketing and fundraising professionals can engage in messaging successful enough to fully offset that perception, because it’s based on personal experience.

  2. Jeff,
    Having worked in advancement for two academic medical centers and two smaller community hospitals back in the day, I can tell you that one of the primary reasons for the difficulties in productive fundraising today for healthcare institutions, particularly the so-called “nonprofit” or “charity” institutions, is that they are increasingly viewed as anything but “nonprofit” or “charity” organizations.
    As the hospital/healthcare sector continues to contract into networks of enormous, corporate entities, people see them more and more as simply that … corporate entities or businesses that provide care.
    It’s doubtful that even the most talented of communications/marketing and fundraising professionals can engage in messaging successful enough to fully offset that perception, because it’s based on personal experience.

  3. I’m afraid you’re probably right about that, at least some of the time.

  4. I’m afraid you’re probably right about that, at least some of the time.

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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