AHP Connect Articles

AHP Connect Member Profile - John Drake

President & Stewardship Officer
Irving Healthcare Foundation
Irving, TX

AHP member since 1994

(Shown with a bobble-head figure presented to him by his colleagues during the 2017 holidays.)

Are there any other foundations within the Baylor Scott & White Health network, or are you the only foundation?

The foundation where I work in Irving is located between Dallas and Fort Worth and is one of six Baylor Scott & White foundations located in North and Central Texas. As the BSW foundations align more closely we have begun to represent each other’s projects, which I love. For example, I just received a gift from an Irving donor who chose to give to one of our Dallas programs. I’ll still be this donor’s assigned development officer and will provide his ongoing stewardship, but his gift will be used for a project that was important to him and is being conducted elsewhere in our system. There’s tremendous synergy in being able to help donors achieve their philanthropic goals in this way.

What is something you wish you knew when you started your career in health philanthropy?

Looking back 35 years, I’ve learned that you must find your own mentors. These good folks will not seek you out nor will the best mentoring relationships simply happen organically. I’m well into two decades of being an AHP member and I can tell you that getting involved as a volunteer is the best path to meeting the folks who will become your most-trusted mentors and advisors. But you can’t just join—you must also get involved by volunteering for conference-organizing committees, for the board and for the AHP Journal editorial board, for example.

What area of giving is Irving Healthcare Foundation most focused on currently?

We are transitioning our shop’s programs on a couple of fronts just now. We are moving from raising funds for capital needs to securing gifts for operations. Operating dollars have become more precious as revenues from hospital business continue to shrink each year.

We’re also seeking to move from being focused on occasional capital campaigns and ongoing fundraising events to annual and major gifts. However, I’m one of those folks who views fundraising events not as a stepping stone to annual or major gifts, but as a proven method of securing these types of gifts.

Why do you think events can still be effective?

The results bear this out for us—thanks to excellent leadership from staff and our organizing committees and to in-kind donations that keep our event costs low. Donors like to come to a party. I will grant you that these donors tend to be older, but they have discretionary income and they like to socialize while helping a worthy cause. They have joy in giving—and they plan for events and give generously each year. For now, reasonable revenue growth from our events proves their efficacy. However, whether this will continue with the generations of folks who follow the Baby Boomers is uncertain. I think you always should evaluate results and be willing to “bless and release” when events no longer produce.

Describe a recent/current project at the foundation that you’re proud of.

Donors gave more than $800,000 to fully fund two 3D mammography devices for the two local imaging centers run by our community hospital. In the past half year, I’ve had calls from three donors who told me their breast cancers had been detected as early as possible because of this recent technology. As a result, they had better treatment options and outcomes.

People are helped every hour of every day at our hospital because of equipment and education funded by philanthropy. That’s immensely satisfying.

How long did it take to raise the money for those devices?

Two years. We funded one in one business year and a second in the subsequent business year.

What were the strategies you used to fund the devices?

It was a mix of community and employee gifts, foundation grants, support from third-party events, and direct mail. It was a multi-channel approach. We made the case in every appeal that we wanted to help patients find tumors when they’re tiny and most treatable. We also made it clear that we could not buy the mammography devices until we successfully raised the funds needed, which added urgency to our appeal in both years.

What strategies do you use to encourage employee giving?

We do an annual campaign and I’m proud to say our results are high; for example, we have had participation rates above 80 percent for the past three years. We’ve also led our system in employee giving participation for the past eight years. Remember, it’s not bragging if it’s true!

As a preamble to my answer, I need to say that the ultimate compliment that an employee can pay is that they would give their hard-earned dollars in addition to their time. Employees ARE the gift. They come to work. They do their jobs with excellence. My team and I then have the audacity (I say jokingly) to ask for their money—and they respond generously. Last year, our base goal was $106,000 and they gave $220,000.

I think THE most strategic message with employees is that we say (and mean) that it doesn’t matter what you give—instead it matters that you give. To us there is no such thing as a small gift; there are only gifts. Someone handed me 14 cents during last year’s employee campaign and said it was all they could give because of a financial hardship at home, but that they still wanted to help us reach our participation goal. That’s a sacrificial gift. We focus on participation, not dollars. I think that makes all the difference.

Have you ever tried a tactic (a communications campaign, an event, etc.) that didn’t go well? What did you learn from that?

Sadly, yes. And I knew better. Last fall, I boldly rolled out to my board at a meeting an idea for a “cannot-fail” new donor-acquisition event—instead of vetting the idea by seeking their input first. I broke my sacrosanct “Never Surprise Your Boss” rule. (I also have a “Never Surprise Your Colleagues” rule, by the way.) As a result, my team and I had to execute our idea without the support of a few of our most important advocates. If there is any silver lining, it’s that this new event a was a tremendous success and our “doubters” were not only apologetic, but eagerly asked how they can help us next year. Still, I made it harder on myself and my team through over-confidence and under-communication.

What are the major challenges you see facing health philanthropy in the U.S. over the next five years?

1. Tax reform: It will be interesting to see how new U.S. tax policy with increased standard deductions will affect giving. When you look at reasons people cited for contributing, tax considerations were always low on the list. We will start to see if that’s true in 2018. And we’ll also start to see if donors will begin to “bundle” their giving (making larger gifts in one year over another to exceed the standard deduction and itemize). This will affect the year-to-year cash flow of gifts if and as more people try it.
   
   
2. Donor Acquisition: Traditional methods of mail and phone are less effective than ever, I’ve found. Social media is great for ever-fleeting marketing awareness, but not for acquisition. We’re spending our money these days on face-to-face events instead of postage, printing and phone these days. It’s a gamble I believe will pay off, but the data will decide.
   
   
3. Explaining non-profit health care: Underpinning all our work is the hope we can continue as an industry to explain the difference between non-profit, public and for-profit healthcare. In speaking to groups large and small, I’ve found that most people have no idea about the difference between hospital types. I hope that AHP and its members can continue to lead in making this topic simpler for people to grasp.
   
   I use a very simple board-game presentation and in about three to four minutes I can help answer for most people in an audience the reasons why my team and I raise money for our hospital. Most people in the U.S. think hospitals make money hand over fist, so you must dispel what I call the “Myth of the Fully Paid Hospital Bill.” People will often say, “Did you know how outrageously high my last hospital bill was?” I typically respond, “No, I didn’t see your bill, but I bet there was a line at the bottom of the itemized charges that read, ‘Please do not pay this bill. It has been submitted to your insurance company.’” It’s at this point I remind them that they are not going to pay their bill—and neither is their insurance company! After negotiated discounts, only a fraction of any U.S. hospital bill ever is paid. Gift dollars, by comparison, have exponential value as we seek to help our organizations achieve their ambitions and missions.

What’s the board game you mentioned?

It’s a fun learning exercise where you challenge folks to allocate $100 in billed-to-insurance charges into six areas: salaries and benefits; supplies; bad debt; deductions from revenue; other (utilities, audit, etc.); and capital.

When you ask them which of the six areas they think gets the largest share of the $100 in billed charges everyone says, “Salaries.” It never fails. However, the “WOW!” moment comes when you instead reveal the largest amount goes to deductions from revenue. At our hospital, deductions from revenue comprise (on average) $70 out of every $100 that we bill. You then remind folks of the (aforementioned) fact that insurance companies will only pay a fraction of each bill because of negotiated discounts. Charity care — financial write offs for those people who have no means to pay — also is a deduction from revenue. After you take the chunk out represented by revenue deductions, you only have $30 left to run your hospital. Of that residual, $15 goes to salary, $7 goes to other, $4 goes to supplies, and bad debt claims $3. If you’re a CFO, that leaves you only $1 of every $100 billed for capital needs. That’s a 1 percent margin — close to what grocery stores make.

That tends to get people to the point where they’re at least willing to listen to why our hospital needs help through philanthropy, for example, to provide continuing education for nurses or to buy new infant warmers or mammography devices. That’s how my team and I help make our case — and it’s very participatory and engaging.

Last year donors gave $4 million in response to our development appeals. For our hospital to have $4 million left from operations — with its one percent margin — it would need to bill an additional $400 million in charges. That’s the “business value of philanthropy” and it’s so important for our advocates and donors to understand.

Download instructions for The Game and — after you secure the breakout of billed charges for your organization from your CFO — you can start playing it with your board members, potential donors, and employees!

What’s the most rewarding part of teaching at the AHP Madison Institute?

Teaching at Madison is like seeing into the future today. My faculty colleagues and I see “the face” of healthcare philanthropy and the people who will lead it at organizations around the world long after we’re retired from this profession.

Over that one week, we also see friendships born that will last across an entire career. I know—because I still am connected to friends from 2007 when I went as a student on a regional scholarship. AHP Madison Institute in 2007 and the Management Track still represent the most meaningful and impactful week of learning in my career. Each summer now, my faculty colleagues in every learning track and I are given the chance to create that same result for our class members.