Hospital Foundations: Securing a Future for Health Care

Tuesday September 25, 2007

Chances are, you’ve probably heard of hospital foundations, like Columbia Memorial Hospital Foundation. But like most people, you may have no idea what they are, or why they’re so necessary. For a non-profit hospital like Columbia Memorial, they are critical.

Simply put, a hospital foundation raises money and community awareness for a hospital or medical center, like Columbia Memorial Hospital. The same way a concrete foundation physically holds up a house, hospital foundations financially hold up thousands of not-for-profit hospitals and medical centers.

A foundation may share some board members with a hospital, but it’s a separate organization with a separate focus, explains Bill McGinley, president and CEO of the Association for Healthcare Philanthropy. The CMH Foundation is incorporated under the laws of the state of Oregon and has its own ruling from the Internal Revenue Service as a non-profit charity. The CMH Foundation Board has some cross-over with the hospital. The CMH CEO, Terry Finklein, and the President of the CMH Board of Trustees, Katherine Hellberg, both sit on the Foundation Board, although the Trustees’ President position is ex-officio.

The focus of the CMH Foundation is to provide resources for CMH for equipment, programs and services that otherwise would not be possible. Its mission statement is: “Columbia Memorial Hospital Foundation establishes and maintains relationships that generate philanthropic support to enhance Columbia Memorial Hospital’s ability to provide excellence in health care.”

Through fund-raising efforts and community education, hospital foundations help keep health care providers and their communities in touch with each other’s needs.

Why are they important?

Foundations became more popular in the late 1960s, McGinley says, when government funding for hospitals started to decrease. Since then funding has continued to decline while costs of providing services have continued to rise.

“Back in the 60s and 70s it was more like “Here’s what it cost us to provide this service, we add our profit, that’s what we bill,” McGinley says.

Now hospitals often receive less reimbursement from insurance companies and the government than what it costs to provide the service. This reduction in payment costs hospitals billions of dollars every year. At the same time, the costs of labor, medications and technology are increasing. Hospital employees’ salaries and benefits continue to rise. And then there are the approximately 44 million uninsured Americans who need health care whether they can pay or not. Taken together, these forces have “created some very, very difficult times for hospitals in recent years,” McGinley says.

According to the American Hospital Association, nearly one-third of U.S. hospitals lose money every year. These strains have made foundations and fund raising more important than ever to hospitals’ survival.

Money well spent

Hospital foundations raise money in several different ways, including:

• Annual campaigns—-yearly mailings to former patients and community members. The mailing may include an update on the hospital’s activities and growth, but always includes an appeal for a gift. CMH Foundation conducts an annual campaign.

• Capital campaigns—-one-time efforts over limited periods of time to raise funds for specific projects, such as a new facility, new equipment or a new service. Examples of past projects funded by capital campaigns at CMH Foundation are the Healing Garden, the OB Surgical Suite, the Trauma System Upgrade and soon, the Chemotherapy Infusion Center.

• Planned giving—-when a person leaves part of his or her estate for the hospital foundation in a will, or establishes a charitable gift annuity or trust. CMH Foundation is licensed through the state of Oregon to issue charitable gift annuities.

• Endowments—-investments set up by the foundation for the hospital. The money for the investment comes from contributions. The returns go to the hospital, but the original money isn’t touched. This provides a stable, long-term income source for the hospital.

• Special events, such as black-tie dinners, golf tournaments and galas. CMH Foundation holds a golf tournament and auction each year. Last year’s event raised over $200,000 for CMH.

• Major gifts, large one-time donations from individual donors.

Where does the money go?

Contributions may help with building or maintaining facilities, buying new equipment or making up losses from operating costs.

Foundations also fund special programs such as mammography vans, free clinics and dental care for low-income families, and programs to help people pay for long-term medications when they don’t have prescription drug coverage. CMH Foundation has funded diabetes education, breast health transportation costs and children’s intervention programs.

A reason to give

“People give for a number of reasons,” McGinley explains. “More often than not
they believe that they are contributing to better health care in their community.”
And they’re absolutely right, he says. Better hospital funding means more and better services. In the long run any contribution to a hospital’s foundation is an investment in your and your community’s health. To contribute to the Columbia Memorial Hospital Foundation, call 503-325-3208, email at foundation@columbiamemorial.org or on the web at www.CMH-foundation.org

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