Published Reports FY 2006...available only to participants of the AHP Performance Benchmarking Service.

General Overview Fiscal Year 2006 - Report 1

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As part of the AHP Performance Benchmarking Service, AHP will publish reports to assist with analysis and interpretation of data. For FY 2006 data collection and analysis, AHP published four reports. "General Overview Fiscal Year 2006" introduces the concepts of efficiency and effectiveness as measured by cost-to-raise-a-dollar (CTRD) and return-on-investment (ROI). Gain important insights into social, economic, and institutional factors that enhance or hinder fundraising efforts and more accurately measure human and financial resources needed to become more effective and efficient.

Here is a sneak peek at some of the valuable information you will find in Report I:
General Overview Fiscal Year 2006:

Program Specific Performance
The charts below provide an even deeper examination of fundraising effectiveness (ROI) and efficiency (CTRD) on a programmatic level.

Systems and hospitals alike show higher returns from impactful major giving programs and higher costs associated with annual giving and special events – commonly considered to be new donor development and recognition programming. One exception to this finding is the lower level of planned giving performance reported by systems (median ROI of $2.40) compared to hospitals (median ROI of
$9.95). While planned gifts naturally ride a much more unpredictable tract, this disparity could also be associated with more recent emphasis on planned gift activity by systems. New programming requires greater investment and a lower payoff in the early years with rewards emerging at the 3-5 year mark.

Both hospitals and systems do quite well in maximizing annual giving returns. In comparison to program level performance reported by the Advisory Board in 2005, median ROI s in this study rate nearly five times (for hospitals) and three times (for systems) the $1.60 median reported in that study. Little can be said about these disparities aside from an assumption of longer-term emphasis on annual giving among the partners within our study. Longer programmatic emphasis is commonly associated with decreasing expenses and higher returns from a dedicated market of committed supporters.

Data show that at every program level, hospitals register higher returns on investment paired with lower costs to raise funds than their system counterparts. This is likely due to greater efficiencies gained by hospitals who are able to keep fundraising (both operational and human resource) costs low through centralized foundations, lower staff sizes, and reduced operating expenses. As previously mentioned, systems naturally spend a great deal more on raising funds in multiple locations. The bottom line, though, reflects a different story in systems’ overall revenues. Data show that, at the median level, health care systems raise almost $2 million more in production than hospitals and nearly $100,000 more in cash. [Both medians are reported in the ner (gross less expenses)].

Again, the ranges reflect wide variation in performance at the programmatic level. A closer look at segmented findings requires a breakout of performance through percentiles provided in the data tables included in Appendix A. Data reported at the percentile level also facilitate individual-level comparisons between partnering hospitals and systems.

Observations from the data analysis (numbers 2 through 4 of 7 that are discussed in the report):

• AHP’s findings are comparable with other groundbreaking studies of fundraising performance. At the same
  time, however, our comparable statistics illustrate that our partners rank within the higher echelon of health care foundations in terms of overall performance. Our careful methodology that tracks and allocates expenses to direct and indirect fundraising activity may influence higher returns among this sample. (Discussion on pages 9-10)

• It takes a while for early investments in new fundraising programs to pay off. The lower and even negative returns reported for individual fundraising programs are largely a result of fresh, upfront investment in staff, materials, and relationshipbuilding activity that will yield higher returns and lower costs after 3-5 years. (Discussion on pages 11-13)

• Major gifts programs pay off. Hospitals and systems that have invested time and resources in major gifts from individuals, corporations, and foundations and through planned giving yield higher overall returns than those who do not. Many larger gifts from these sources make up a larger share of their revenue pie. (Discussion on pages 11-13)

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