Philanthropic donations to U.S. nonprofit hospitals and health-care systems grew 8 percent last year to $8.26 billion, with individual donors contributing nearly 60 percent of the total, a new report says.
But fundraising costs grew and return on investment fell, says the FY 2010 AHP Report on Giving/USA by the Association for Healthcare Philanthropy.
Donations and grants to health-care institutions increased $620 million from $7.644 billion raised in fiscal 2009.
Last year’s total fell short of the nearly $8.59 billion raised in fiscal 2008 and the nearly $8.35 billion raised in fiscal 2007, AHP says, but the rate of growth was the highest since fiscal 2006.
Annual giving accounted for 20 percent of all funds raised, followed by major gifts, 17.1 percent; capital campaigns, 15.4 percent; and special events, 14.8 percent.
Planned giving accounted for 9.5 percent of donations, similar to levels before the recession.
Health-care groups invested the largest share of donated dollars, 22 percent, to fund construction and renovation projects, down from 27.3 percent in fiscal 2009.
New and upgraded equipment purchases accounted for 20.6 percent of donated dollars, while general operations accounted for 17.6 percent, both up slightly from fiscal 2009.
Community-benefit programs accounted for 10.7 percent, roughly the same as in fiscal 2009.
Return on investment has fallen the past three years of the recession, while the cost of raising money has climbed.
Health-care groups spent 33 cents to raise $1 in fiscal 2010, exceeding 30 cents for the third straight year.
Return on investment fell, on average, over 4 percent to $3.05 for every dollar spent on fundraising.
“Taken together, these metrics indicate increased expenses associated with raising the same (or for some foundations, less) than previous years,” AHP says in a statement. “The bottom line: Fundraising has become more challenging and, therefore, more expensive. Additional resources are needed to raise the same amount of funds during difficult times.”
Fundraising programs to support hospitals associated with academic institutions and children’s hospitals, as well as programs that are at least 15 years old and those with at least four professional fundraisers on staff posted higher-than-average success in securing donations.