The importance of philanthropy in healthcare continues to rise as organizations face challenges in securing adequate dollars to help them reinvest in their mission.
The Association for Healthcare Philanthropy’s 2023 Report on Giving for FY2022 showed that charitable giving provides a return on investment of $4.96 for each dollar invested in fund development—a rate of return that far exceeds what’s possible from any clinical service line. As a result, philanthropy has become essential to providing capital and operational dollars to achieve a healthcare organization’s potential.
However, most CEOs today face the untenable position of needing to provide time and attention to philanthropy when it is not formally recognized as an organizational priority. As the board considers the potential of philanthropy as a revenue source to sustain the mission and strengthen strategy, it’s time to formalize the CEO’s role in advancing development.
Adding Development to the Job Description
As philanthropy has become a lever to organizational excellence, it can no longer be an optional role for the CEO. Governing boards can affirm the importance of philanthropy as a key revenue strategy and support the CEO’s role in development activities by adding this role to the job description.
If participation to bolster this key revenue source is a leadership activity, the board should honor and evaluate it as part of the CEO’s role. That means not only setting expectations but also aligning those expectations with performance evaluation criteria and at-risk incentives.
Adding philanthropy to the formal list of expectations provides a benefit to CEOs by removing a hurdle to dedicating time to it and by creating a mutual understanding of the CEO’s role in supporting it as a vibrant and sustainable revenue source.
Facilitating Donor Relations
CEOs have been entrusted with the successful management and financial health of their organization, so it naturally follows that they would be obligated to take on a meaningful role in fund development. Simply, no other organizational leader is as effective in conveying the organizational vision for the future, instilling a sense of trust and confidence in the organization, or rallying internal resources and advocates.
This is particularly important to the donor relationship. With backing from the board, CEOs can bring the stature, prestige and credibility of their office in building stronger relationships with donors. CEOs are uniquely positioned to give donors confidence in the organization’s strengths, strategic vision and plans; those considering substantial investments in an organization’s vision would also want to meet the individual who will ensure the diligent implementation of the proposed vision, which may also include board members.
CEO and board involvement demonstrate respect to those who are or would be the organization’s staunchest allies, and significant donors are accustomed to having access to and interaction with an organization’s top leaders. Thus, board and CEO involvement are essential in securing transformational gifts.
Presenting a Unified Front—Internally
The symbolic and tactical importance of the CEO in prioritizing philanthropy within the organization cannot be overstated, since no other organizational leader has the stature and relationships to single-handedly deploy the organization to advance it. The CEO’s verbal support, physical presence and active modeling signals that philanthropy is important, elevates it on the agenda, sets expectations, unleashes resources and builds momentum with advocates.
With backing of the board, other ways CEOs can enhance philanthropy include:
- Ensuring strategic alignment. The CEO makes sure charitable dollars are directed to the organization’s highest priorities rather than being squandered on optional or low-value projects and can facilitate access to information about multi-year objectives, the supporting rationale, timeline, cost and more. This role fosters alignment with philanthropy by including the chief philanthropy officer in key strategy conversations, both to hear the dialogue and to provide perspective on the likelihood of donor support for an initiative. The CEO also collaborates with the foundation board to ensure a shared vision for the role of philanthropy in enabling future plans.
- Leveraging allies. The CEO has relationship equity to seek the active involvement of board members, clinicians and other senior executive allies as connectors, advocates and influencers. This role also can encourage physicians to champion philanthropy by sharing the clinical rationale for strategic projects and by enabling patients to express gratitude for care in a way that respects, affirms and enriches the patient experience.
- Making adequate investments. The CEO can ensure fund development is recognized as a revenue center rather than a cost center and can advocate for investment in the program consistent with the level of financial opportunity that exists. The CEO may sometimes also support expansion of budget and staff resources to build or expand the program, even when cuts are required in the organization’s operational budget since dollars invested in philanthropy can be multiplied and returned.
- Positioning for credibility. CEO support is pivotal in positioning the fund development function as credible and strategic. Key actions in doing this include engaging the chief philanthropy officer on the executive team to gain access to both information and internal allies. A strong working relationship between the two, based on mutual respect, regularly scheduled interactions and open communication, also enables effective collaboration.
Ultimately, CEO engagement and board support—both inside and outside the hospital or healthcare facility—can enable philanthropy to flourish, and it is critical to optimizing fund development efforts.
Betsy Chapin Taylor, FAHP, is CEO of Accordant (betsy@accordanthealth.com), Ponte Vedra Beach, Fla., and an ACHE Member.
A CEO’s Perspective
by Kimberly A. Russel, FACHE, CEO, Russel Advisors
The highlight of my healthcare executive career was serving as CEO of a community hospital, followed by service as CEO of a regional health system—totaling 25 years. A CEO’s days (and nights) are filled with immense challenges and high stress levels, but interacting with philanthropic donors can be an uplifting, energizing and impactful aspect of the position.
For CEOs who may be reluctant to become deeply engaged in philanthropy, remember that philanthropy is based upon relationship-building. Most CEOs have a successful history of relationship-building with internal staff, physicians and community organizations. Extending the CEO’s relationship-building skills to include current and potential donors is a natural continuation of the CEO’s talents.
CEOs may be concerned about time demands. Sharing time with donors is a win-win; the organization will ultimately benefit, and the CEO can focus on the positive stories—along with current needs and future dreams—with friendly advocates. Consider these scenarios:
- Meeting with a family around their kitchen table to relate the importance of their deceased parent’s past work as a pioneering physician at the hospital while sharing opportunities to continue their relative’s impact.
- After an inpatient experience, developing an ongoing relationship with a local business leader with an interest in supporting workforce development.
- Intentionally allocating CEO time to philanthropy will support mission-critical work and move the strategic plan further and faster. In my opinion, spending time with those who financially support the organization’s initiatives is personally gratifying. Interacting with current and potential donors should be a bright spot in the CEO’s crowded calendar.