AHP Connect Articles

CEO Corner: Communicating the Power of Philanthropy to Your C-suite

According to a 2018 Moody’s Investor’s Service report, health system operating margins have hit 10-year lows as of last year because costs continue to outpace revenue. There has never been a more urgent need for new revenue streams – and we all know that philanthropy can be a powerful bottom line revenue driver.

But in order to ensure philanthropy is seen as a priority in your organization, you need to get your C-suite on board. So how do we speak in the language that our C-suite partners understand to make the case for investment in philanthropy?

I’m increasingly convinced that return on investment (ROI) is a far better measure than the cost to raise a dollar because it allows people to see the dollar invested in philanthropy as generating $4 in return — a significantly better ROI than any other dollar invested throughout the hospital. When a CFO hears this, it should have the benefit of encouraging investment in philanthropy rather than seeing it as an area for potential cost savings.

This study, done by my former employer, the Advisory Board, confirms that CEOs continue to focus on cost containment and expense reduction. The new addition is a distinct focus on diversifying revenue streams. The study found that 90% of hospital and health system executives indicated new revenue streams were an urgent priority. Every participant in the study acknowledged the need to diversify revenue.

Additionally, Moody’s and others like them now take philanthropy effectiveness and results into account when setting the organization’s debt rating. So, if philanthropy does well, it is cheaper for the organization to borrow the money needed for new projects. Another way to communicate the value of a donor dollar is to compare it to a patient dollar. How many patient revenue dollars does it take to equal one donor dollar in terms of the bottom line?

Financial impact is not the only story to tell at the C-suite table. As we all know, there are also psychological and physical benefits to our work. Philanthropy is one way patients have found to express the gratitude they feel for caregivers, hospital staff and our organizations as a whole. We know this is important because expressions of gratitude are scientifically proven to help patients heal both physically and psychologically. But in addition to that, we are beginning to show the positive effects of gratitude acceptance among our caregivers. We know the statistics on physician burnout, exhaustion, depression and suicide. It is a frightening crisis for our caregivers and for health care in this country, and one which is a tremendously difficult one to solve.

Studies are showing that when we create an environment in our health care organizations that allows patients to express their gratitude and our caregivers to accept it (rather than saying, “Just doing my job”), burnout is reduced and the issues it brings to our caregivers are lessened. You can read more about this in AHP’s “Transforming Health Care Philanthropy.”