Fair warning: A financial tsunami will hit healthcare in 2020.
Fortunately, there is a proven strategy – Fundraising Performance Improvement – that your foundation can adopt before this fast-approaching crisis hits. FPI will help your healthcare system not only endure, but prosper, in a time of unprecedented demand for healthcare.
Demographers say 2020 is when the leading edge of the Baby Boom generation will turn 75, the age at which people begin to require more and more healthcare. But Generation X, coming right behind the Boomers, has 9 million fewer people.
The result: Medicare costs will rocket up as tax revenues drop like a stone.
Gen X can’t foot that bill, so the healthcare industry will have to figure out how to do much, much more for much, much less.
The typical hospital operating margin today isn’t sufficient to fund the radical healthcare system redesign necessary to cope with tomorrow’s crisis. In fact, for many healthcare organizations the prognosis is dire.
A Different Order of Magnitude
But not just philanthropy at the level most are experiencing now. To be part of the solution, we in healthcare fundraising need to step it up by a factor of at least two.
Can we do it?
Emphatically, yes! Some foundations are already doing it. Association for Healthcare Philanthropy data is proof.
In AHP’s latest available Report on Giving, the so-called High Performers for both the U.S. and Canada outperformed the average benchmarking respondent by a factor of five. Over the years, the figures continue to document a huge gap in performance between a few consistently high-performing organizations and the majority of reporting participants.
Your Foundation Can Raise Far More
You, too, can be a High Performer. You can transform your foundation through a Fundraising Performance Improvement plan based on the principles of Lean Six Sigma, which originated in manufacturing and is used in many industries to increase value, use resources effectively and reduce waste.
But Lean Six Sigma isn’t about doing more with less. In fact, the links between your overall budget, staff size and revenue are clear from studies done by the AHP. Essentially, as AHP’s Healthcare Philanthropy Journal said in summarizing how the top achievers are set apart from the rest of the field: “… the most powerful predictor of fundraising success is a foundation’s total fundraising expense budget. In other words, the more you spend, the more you make.”
Hope Is Not a Strategy
It isn’t quite as simple as just asking for a bigger budget.
But the point is that your system’s leadership at a minimum must invest in building an organization that focuses on a more dynamic and productive major gifts program. Or it could opt for a more comprehensive initiative designed to double or triple the amount you are raising.
The worst “plan” is simply to drift along, hoping for increased fundraising while doing nothing to change the essence of your day-to-day approach. An article our firm published in the Fall 2012 Healthcare Philanthropy Journal – “Hope Is Not a Strategy” – is still resonating with development professionals we encounter.
The good news about the coming “tsunami” in 2020 and beyond is that Baby Boomers will be leaving historically unprecedented amounts of money to charities.
Will your foundation be prepared to take advantage of the bounty?
A Fundraising Performance Improvement strategy will put you ahead of the field.