Stop Saving for a Rainy Day
When the answer to the question is “What are you waiting for?” that normally means there's something amiss.
I ran across a situation recently where a dutiful new chief development officer was getting a handle on the finances. Nothing nefarious overall, but there was a realization that there was $16 million sitting in the bank. And almost none of it was endowment. And as it turned out, it had been raised, at least a majority of it, many years ago and had done well from an investment perspective. The foundation board was basically sitting on the money.
At the same time, the CEO of the hospital has a long list of realistic and important needs that could make healthcare better for the community. And like most hospitals nowadays, finances were not great. And somewhere in the middle there was an abyss between the people who had the money restricted for that hospital and the executive suite who needed money.
It shouldn't be this difficult, should it?
In a conversation with the CEO, he indicated that he didn't want to “drain” the money from the foundation. Again, much of this was unrestricted and undesignated. I asked him why the hesitancy. As healthcare’s finances have descended into negative returns, now is the perfect time for philanthropy and philanthropic dollars to be used for critical needs that we're going to make the community healthier. Plus, it's really hard to go back to those donors who made those dollars possible if you don't steward them by showing the value and importance of their giving.
At the same time, I asked the foundation board what they were waiting for. They had a decent understanding of the financial situation of the hospital. Why wouldn't they start pushing to get those dollars to be used for critical healthcare needs and improvements?
No one likes a savings account more than I do. There is security in knowing you have an emergency fund, backup savings on top of that, and then very little debt. A dream come true. But at the same time, you have to take care of the here and now.
In the end, I've tried to explain that it's not raining right now in healthcare, it's pouring cats and dogs. Saving these unrestricted resources at this critical juncture is not only a bad idea but it is also probably borderline anti-fiduciary at some level.
