Episode 19: Program Support Fundraising - Are You Ready?
Welcome to another edition of “Around with Randall,” your weekly, ten-to-12 minute podcast, about making your nonprofit more effective for your community. And here is your host, the CEO and Founder of Hallett Philanthropy, Randall Hallett.
It's great to have you back here on “Around with Randall.” This week I want to talk a little bit about maybe some of the things we're going to have to think about in philanthropy that are going to look different than our past. For me, this all started here recently with a webinar that was done by Becker's Review, which is a pretty remarkable organization that captures an immense number of stories and data from different aspects of that healthcare - clinical world. It's just not about philanthropy. They have a subscribed service to a free email. You can go to Becker's Review, I highly recommend it if you're in healthcare, just to keep up with what's going on in the industry.
And it was a webinar that came across my email that dealt with how space would be used in the future. So I jumped on when I had an hour free while I was working on some other things and I was just entranced and figuring, well, wait a minute, this has a direct relation to the way we looked at philanthropy in the past and what we're going to be doing in the future.
So just a couple of quick highlights from the webinar. It was entitled “Rethinking Health System, Facility Strategy.” It was by a member of the advisory board who had done some work in surveying. He is a director and a former CFO from the University of Rochester Medical Center and served as CFO at Boston Children’s Hospital. What I found fascinating was is that healthcare organizations are beginning to figure out that they may have way too much space or space is not properly suited for what's going to happen in the future.
A couple of stats for you. COVID has brought the idea of a virtual visit so much to the forefront. There's been - according to Blue Cross Blue Shield - a 35 times increase in physicians taking virtual visits. The advisory board found that before COVID below 2% of physicians did virtual visits.
It jumped In April and May up to 45% and then leveled out after that at about 25%. So that's an enormous jump on top of it. Hospitals became very aware, as much of society did, that during the pandemic that the current structure, physical structure of hospitals, limited patient space, and what's come out of it from a planning perspective.
Looking forward is questions like how do we turn a parking garage into a patient care area in an emergency. How do we take multiple beds and put them into a private room so there's more space? How do we set up many ICUs throughout the hospital? How do we take non-patient space waiting rooms, hallways, and turn them into patient space? The flexibility of a facility needs to be better understood. Well, that caused me to think a little bit about, are there other industries or other parts of our industry and philanthropy that are struggling with this idea space? And so, cause I'm a little bit intellectually curious and a little crazy, I started doing some reading in higher ed.
There've been two building booms. For our colleges, universities, one right after world war II from, let's say 1948, 50 through about 1975. And there's been a resurgence in buildings and their needs and their building booms from about just after the turn of the century, 2000 through the last year or two. The big difference is that the number of college students jumped dramatically after World War II. This was a demand in space because of need. Today, we actually have maybe as many or fewer college students, but yet we're building a lot more space. This is causing an enormous problem when it comes to costs of these buildings.
In a study done by the education department for the state of Missouri, the University of Missouri system has $1.4 Billion in upgrades and remodeling or renovation, or just upkeep, that's backlog. They don't have the money to get to it because they have too many buildings. They don't know how to take care of them to keep them at the level that they initially had intended. The University of California system has the same issue at $4 Billion.
So one other thought for you. During COVID my son who loves animals and loves the zoo - we have spent more time virtually going to zoos around the world, looking at live cams and other things, because it gives him an opportunity to enjoy something he can't do here in Omaha on a regular basis. And that leads then into things like art museums and other places. Am I going to go to Paris and see the Mona Lisa? Or, can I do it virtually? This idea of space is really important because what we're going to see is it probably less space in so many of our non-profit areas are going to be needed where we've just overbuilt overconstructed.
So, that’s kind of the data. What does this mean for you?
So the tactical, as we always try to do here, we have in our industry depended way too much on this, what I'll call a traditional method of buildings. And we do things like building, naming opportunities, space, naming opportunities, uh, frankly, we're our own worst enemy. At the same time, there has been a change in the public perception of space. Two quick examples when our son was ready to be born, our first child, I working at an academic medical center, was asking questions at the place I worked because I had not spent much time up in the birthing center. The maternity ward.
And I asked questions like, well, how far is the NICU? And where's the surgery. And if there were this issue, how do we handle this? And I was told that I was being escorted, because I was an executive, by a very high-ranking person giving me a tour, which was very nice. But she looked at me like kind of befuddled. And I said, why do you have that look on your face? And she said, well, we usually don't get those questions. So what kind of questions do you get? Well, how many television stations do you get? How big are the rooms? Are the rooms nice? And I thought, well, I want nice, but more importantly, I want medical care.
People make decisions on where to give birth many times based on aesthetics, more than they do clinical care. That doesn't mean the clinical care is bad. It just means the decisions are made differently.
How about kids going to college? The idea of dormitory space or, it’s not even dormitories shows you how old I am of residence halls and this idea of a standard residence hall room. We had two people in a bunk bed, or do we have quad rooms with living spaces and, and, and student activity centers and all kinds of other things. People are making decisions differently.
So you couple, this idea of we've been building in philanthropy, we've been using it as a catalyst to get people involved and the ID people are making decisions differently, brings us to this moment where we may not be building buildings anymore, or at least in the same way. So the tactical pieces are to start looking at how we fund programs. What happens in the buildings?
I was very lucky early in my career to spend some time in the Jesuit network, doing some fundraising and St. Ignatius is the patron Saint of the Jesuits. And if the idea of education, which is what the Jesuits have spent 450 years providing and believing in, and there's an old adage, you know, you can teach well underneath the tree. There's some value to that, but. The programs and the universities and the healthcare units and the secondary schools and the art museums and the zoos and other things are going to have to figure a way. And we're going to have to figure a way to support the programs that go on in and around these facilities.
Some examples higher ed out ahead of most, they started this idea of a chair system to attract and keep great faculty members to provide research dollars. Those are operational costs. This is why universities, according to the last numbers I saw, see 13% of their revenue come from philanthropy, where places like healthcare see 1% the idea of scholarships, particularly in secondary education, private schools got to offset costs. Now we're beginning to see in private schools, this idea of a similar chair system.
So the idea of recognizing and finding endowed revenues for the teachers, because they're the value of the education. I'll give credit to the Henry Doorly Zoo here in Omaha, Nebraska, amongst the best zoos in the world. If you get a chance, come and see it, it is well worth it. They have a program where you can literally be the donor who feeds the fish for the year or feeds the whatever, or they've found ways to create funding opportunities for operationalizing. What goes on in the zoo, the animals or the attraction, how we take care of them, not just the facilities.
So what are the four or five things I would recommend? So the first thing is something you are very much aware of, but we don't talk about it enough. You've got to overeducate your leaders, particularly those that are not in philanthropy and particularly those in finance. That the idea of funding operations, which we are hearing and seeing more pressure on for fundraising, doesn't come from the unrestricted 1950s version of someone, giving you a gift, an organization, a gift, and saying, “Hey, use it for whatever you want. I trust the organization.” The 1950 version of that died in 1980. And those of us in philanthropy know, that's just not the way it works anymore. So we need to start a progressive, aggressive education of our nonprofit leaders, particularly those that aren't fundraisers, and particularly those in finance, they have them better understand that unrestricted dollars are not going to be the savior of our organization. People are more sophisticated than that.
The best example I ever experienced was in healthcare and population health, a buzzword about 10 or 15 years ago. We need dollars for population health. And I would say as a fundraiser, that's great. Can you explain it to me? Well, it's for us to take care of the population. We need to be more assertive, more aggressive. I say, great. What kind of programs are those? What do you need the dollars for what well, we'll figure that out.
Well, I can't go ask people for money for that. And it's true. Almost a decade for many hospitals to figure out what that means about outreach and building clinics and providing programmatic, supporting and partnering with other nonprofits that have more credibility in their particular community to be the idea of just, Hey, the CFO coming to me.
And I remember, well, we need money for population health and I don't, what did you tell me? What, what really was other, they understood the concept, but what is the value? How are we going to measure it? We have to aggressively with our boards, our executive teams, our CFOs explain. They have to come back with information that can help us better explain the value of program support. What are the outcomes? What are the reasons this is going to be of value to a donor? Why would they buy into this? How does this help the organization? How does this help the community?
When you're doing any type of campaign, number two, highly recommend you include a portion of some type of operational support in the budget for the campaign for building a building for say, how are you going to keep it open? I work with in one of my mentors, father, Tom Peshy had as a part of the campaign. The first campaign I ever worked on was this concept of depreciated fundraising. He had a fund to build out a long-term endowed set-aside investment pool that could be in 10 or 15 years every year to build rebuild or to reconstruct or to remodel, or just do general upkeep in the buildings at Rockhurst high school in Kansas city, Missouri was building. I thought everyone did it. And what I found out is he was so far ahead. He didn't, no one had ever even contemplated it. That level you've got to create. Long-term sustainability is a part of your fundraising opportunities.
We're also going to have to number three, move to the idea of mini-campaigns. Things move so quickly and particularly in healthcare where I spend most of my time, but it's also true in universities. You may have smaller campaigns and multiple ones going at a single time.
So in healthcare, you might need $5 million for this particular programmatic approach in cardiology, but at the same time, you might be starting, while that cardiology campaign is in its final public phase, you might be starting in the silent phase and oncology series of needs that are $6 million. They won't be comprehensive. There'll be lined up probably in a little bit more effective way to highly show value for that specific need. There'll be multiple, but separate, but specific.
And lastly, number four, we're going to have to figure a way to talk about with donors, how important reallocated or remodeled space is that we don't always need to build new, that if we transform this area into this, the value of that is from an aesthetics perspective, let's say in healthcare, we know environment makes a difference in patient experience and outcomes.
Or in education, we need less classroom space because we're doing more things online, but we could reallocate the space to do these types of whether it's co-curricular, and I'm not talking about sports, I’m talking about internships. I'm talking about externships. I'm talking about hands-on experiences that we can reallocate space to give a better experience and a better education to prepare people for the working world.
What is it that we have to do to begin a new conversation to explain new is not necessarily needed, but rebranded, remodeled restructured will change our organization or specific parts of it in a very positive way?
So the idea of the tactical is to start thinking about how you would have these conversations about educating your leadership about needing specific things in terms of a clear picture of, of outcomes and value of, including operational costs in almost everything that you fundraise for in some way, shape or form that you create many campaigns to meet the needs of those specific things. And to be able to articulate the value in those individually. And lastly, to better communicate the idea of remodeled space and that we don't need new. What we need is to create a better environment in the spaces that we have. To create better value in what we're trying to do.
Appreciate everyone listening today. If you have any comments or thoughts, you can email me@podcastathallettphilanthropy.com. That's two L's two T's in Hallett Philanthropy.com. And if you disagree with me on this or anything else, email me at reeks, R E E K S@hallettphilanthropy.com. I also would ask if this is helpful to subscribe and to rate, or, put in a comment on your favorite podcast platform about Hallett Philanthropy and share it with four or five people.
If you find it helpful, maybe somebody else will as well. And I also remind you, I, I seem to be writing more often than I realized, but the blogs are up on the website and they're just. Minute - minute-and-a-half reads on things that I'm seeing in the industry that parallel various parts. Maybe sometimes the podcasts sometimes in isolation, just, an interesting thought that I think might be helpful.
I am so fortunate to do what I do. I hope you feel the same way. I love working in the non-profit world. I love being a very, very small part of the multiple clients that I'm fortunate to partner with to watch their successes and know they're making a difference.
And that leads me to my final and pretty much always ending part of the podcast. My favorite saying some people make things happen. Some people watch things happen. Then there are those who wondered what happened. We are people by nature. If we're a nonprofit work, we want to make things happen for people who are wondering what happened, to make a difference to fill the hole in our community.
And we have boards and volunteers and leaders and clinicians and teachers and others. Curators and experts are walking alongside side with us as we raise money. They're the expert at many times at getting out the service or the product that non-profit work does or creates. Okay. I can't imagine a better career.
I get up every morning, wondering how I got this lucky. I hope you feel the same way. You're someone who's making a difference. And I hope things like this and just realizing the value you bring creates a sense of energy and a smile on your face to keep doing what you're doing for your nonprofit and your community.
We'll see you next time here around with Randall. Don't forget. Make it a great day.