by Andy Canada
The Association for Healthcare Philanthropy (AHP) recently released a report tantalizingly titled “Optimal Investment Levels in Health Care Fundraising for Chief Development Officers.” AHP members can download the report at www.AHP.org.
This report essentially probed the key question for any fundraising executive in health care, “How much should I be spending to raise money?” Generally speaking the answer to that question has always been, “It depends.”
And while the AHP report does not give an exact answer, it does provide some illuminating stats that should make many staff and volunteer leaders in health care organizations around the country reexamine their investments in fundraising.
The AHP report identified high performers by combining the upper quartile of respondents to their annual survey and participants in their benchmarking service. They then utilized a sophisticated regression analysis to evaluate the impact of different types and levels of investment in fundraising among this group. The median net production revenue among these high performers was $13 million in 2012.
The study concluded that several key investment thresholds were met by most high performing institutions in their sample. For hospitals and foundations in the U.S., those were:
- Utilizing seven or more FTE in fundraising;
- Investing $800,000 or more in salaries for those employees;
- Retaining experienced staff with at least five to seven years of experience; and
- Achieving average gift levels of $535 or more.
The report is quick to point out that its findings should not be the sole data point used to evaluate any one foundation’s best strategy, but it does provide some thought provoking points.
For example, the study’s authors point to one participating foundation at a large hospital that currently utilizes three full-time employees with combined salaries of $200,000 to raise an annual net revenue of $682,000. By any measure, this is an efficient operation that is doing good work for the organization it supports.
The authors of this study suggest, however, that they are essentially leaving money on the table. The regression model developed through the study suggests that based on the reported success of its peers, that foundation could add three to four FTE and likely double its net revenue and ultimately its support to the hospital.
The findings of this study reinforce what so many of us already know – that fundraising, when done well, is an incredibly productive investment. When an organization is able to invest in a sufficient number of experienced professionals to share their story and build lasting relationships with donors, the results are significant and positive.