Relative Importance of Philanthropy in Healthcare on the Rise?

Fitch Ratings, which is a New York-based credit rating agency, provides a report annually about the creditworthiness of non-profits across the United States. Because of size and scope, many of these ratings relate to healthcare indirectly to hospitals. In 2020, Fitch reported a number of downgrades, meaning weak financial stability outpaced the number of upgrades by almost 2:1. And in healthcare, it’s more than 4:1.

You might ask what this has to do with fundraising.

Studies have shown that the amount of philanthropic revenue brought in by healthcare organizations is just 1.5% of all revenue received. Compare that to education, particularly higher education, where it’s nearly 13.5% of all revenue received by the non-profit educational unit.

Healthcare has depended on bonds in a much stronger way than other parts of nonprofit work. If those bonds, or at least the interest rates, increase, that will place more pressure on finding capital revenue opportunities. I think of that as a good thing for fundraising. 

Can foundations and development offices in hospitals and medical centers leverage this pressure to create more opportunities to make philanthropy more viable in the total revenue a hospital recognizes on an annual basis? Will this mean that the CEO and C-suite will have to pay more attention to philanthropy because it’s more needed? And is a foundation or development office in a hospital ready for this kind of pressure? All important things to think about moving forward.