Healthcare Fundraising Moving to the Next Level of Excellence. Keith Heller and Sid Mallory November 8, 2011

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2 Healthcare Fundraising Moving to the Next Level of Excellence Keith Heller and Sid Mallory November 8, 2011

3 Introductions Sid Mallory, FAHP, Principal Henderson Mallory Partners Austin, Texas Serves a variety of clients across the United States 2010 Si Seymour Award winner Former EVP Philanthropy, Allina Health System, Minneapolis Minnesota Keith Heller, Principal Heller Consulting San Francisco, Chicago, New York Experts in fundraising operations and The Raiser s Edge 15 years, 800+ clients, projects 28 team members San Francisco, Chicago, New York

4 Context and Trends Healthcare delivery in the United States is changing significantly Three main sources of funding for all healthcare systems: Excess revenues from operations Bond funding proceeds Philanthropy Three distinct areas of system fundraising: Local (will always be most important) Emerging lines of service across the system Innovation initiatives affecting large populations

5 Two Distinct Types of Donors Are Emerging Donors interested in traditional healthcare philanthropy Investors interested in innovation and new models of care that affect large populations

6 Innovative Healthcare System Fundraising Today Fundraising across healthcare systems being done in absence of silos Shared vision for philanthropic goals Attracting investor philanthropists Local foundations are achieving increased fundraising success by aligning all philanthropic activities with the system strategic plan and not leaving large sums of philanthropy on the table

7 Innovative Healthcare System Fundraising Today Coordinated donor data bases Coordinated solicitation strategies Balanced local fundraising staff expertise and local fundraising programs Consistency in donor reporting and stewardship Communication between system fundraising staffs Coordinated annual and long-term fundraising goals Consistent return on investment in philanthropic infrastructure

8 The Human Challenges of Change Practical considerations are important, but the most crucial challenges tend to be people issues. People issues = an organization s culture and politics, how staff and leadership feel about change. The ease or difficulty with which an organization meets and resolves the practical challenges rests largely on the state of these less-practical and very human factors.

9 The Human Factors Fear of change - examples: What potentially unflattering information might this process reveal about what I or my individual foundation has been doing? What will be my personal role at the foundation, or the role of our foundation within the system, if we make these changes? Politics & Perception example concerns: Is the system trying to take over my foundation? Is what I m giving worth what I m getting?

10 A Process That Involves Five Possible Stages Communication build trust among stakeholders Collaboration creating opportunities for small successes Standardization explore and adopt system-wide standards and practices Consolidation optimize mission critical philanthropy infrastructure and services (common donor data base, other back office services) Integration - all philanthropic activities strategically integrated within the system vision and plan at all levels

11 Allina s Fundraising Results $13,649, $29,525, $37,699,718

12 Keys to Success Common vision and case for support for philanthropy at the local and system level. Engagement and support of the system board and local fundraising boards. Engagement and support of the system CEO. Collaboration and coordination Fundraising staff education/collaboration/standardization Centralized back office services Centralized donor data base

13 Fundraising Operations Defined The practical steps taken to implement fundraising strategies, the nuts and bolts of your day-to-day activities. Sample Tasks: pulling accurate prospect lists & sending appeals. processing and acknowledging gifts. reconciling with accounting. generating fundraising reports. Requirements: Fundraising software organized to support your strategies (codes, lists and reports). A staff team with the skills to use and maintain the system (business practices, documentation and training).

14 Opportunities: Across Foundations Improved Fundraising Efficiency Adopting best practices for Development Operations and your common software. Documentation (consistency now and over time). Coordinated within and across Foundations. Maintaining flexibility! Improved Fundraising Effectiveness Sharing best practices. Detailed Reporting, Comparative Metrics

15 Opportunities: Health System Central Offices Fundraising Evaluation Summary Roll Up Reporting. Overall performance can be easily reported and benchmarked, including against past years. Identifying trends (positive and negative). Promoting what s working. Accountability Facilitating reconciliation and General Ledger integration. Show you are good stewards of funds to your boards.

16 A Spectrum of Possibilities 0) Nothing 1) Some Communication 2) Sharing Knowledge 3) Sharing Practices 4) Common Reporting 5) Benchmarking Consolidated Buying Power Shared Back Office Functions 6) Shared Data Entry Staff 7) Hub & Spoke Support Model 8) System-wide Back Office 9) Integrated Database / Independent Data Sets & Fundraising 10) Full System Integration Data, Operations & Fundraising

17 Using the Spectrum Any point on the spectrum can be: A stepping stone to further points A final and beneficial goal Going too far, too fast has downsides So does not moving far enough, fast enough!

18 Choosing Your Goal Where are you now? Where do you want to be? What strategic goals will you meet by moving along the spectrum? What will you need to get there? A plan Communication Time and proper timing Expertise (in-house / external) Money (hardware, software, training, etc.)

19 Finally Our Donors are Watching! The healthcare philanthropy case for support has changed from being one of hospital centric cases to one of health for populations. Donors and other external stakeholders are driving the migration to collaboration and coordination of system philanthropy activities. Investor philanthropists are drawn to support system-wide activities. It s all about the process. Are we listening and moving forward?

20 For more information Please contact us: Heller Consulting Over 800 clients and 1,700 projects, nationwide San Francisco Chicago New York Heller Consulting helps fundraising professionals achieve new levels of excellence, optimizing their use of fundraising technology and streamlining development operations for maximum efficiency and efficacy. In the course of this mission, we hope to develop mutually-rewarding, long-standing relationships with our clients, sharing a dedication to socially responsible business practices. Henderson Mallory Partners bitsy@hendersonmallory.com sid@hendersonmallory.com As independent consultants, Henderson Mallory Partners offers specialized approaches to philanthropic fundraising. We apply over 40 years of fundraising and management experience to craft custom solutions for nonprofit clients across the United States. From increasing the effectiveness of established development programs to creating new philanthropic foundations and fundraising programs, all services are provided personally by one, or both, principals. This hands-on approach allows us to develop relationships with volunteer leadership and staff that inspire confidence and ensure the growth and success necessary to benefit organizations for the long term

21 Appendix Spectrum Details

22 Starting on the Spectrum 0) No coordination at all - (there s actually a - 1 distrust) 1)Some communication - Fundraisers talk, gather occasionally.

23 Level 2: Shared Knowledge What different avenues Sharing independently created documentation. System-wide software user group. Shared training (in-house or external trainer). Why increased knowledge & skills. How Survey colleagues for key questions. Share existing methods / documentation. Schedule user group / training to address.

24 Level 3: Shared Practices What Common best operational practices fundraising, database. Centralized documentation that everyone adheres to. Why Better practices Consistency Use colleagues as resources Invent the wheel once How Survey colleagues for common practices / key challenges. Select 2 or 3 first topics (easy ones!) Gather existing documentation, modify and publish.

25 Level 4: Common Reporting What The same report(s) run from different databases. Why Make better use of fundraising database. Sets stage for benchmarking (if desired). How Determine the desired report. Adopt the same codes to support the report. Document use of the codes to ensure consistency. Run the report and compare (repeat until satisfied).

26 Level 5: Benchmarking What All affiliates agree to record and report specific metrics in the same way. Can be for benchmarking within affiliated system. Or for participation in industry-wide program. Why Evaluate effectiveness of fundraising strategies. Share what works for strategies. How As with Common Reporting with more stringent definition of field usage and business practices.

27 Consolidated Buying Power What - Pool financial resources for purchase of: Direct mail acquisition lists Mailing house services Prospect data screening Training or consulting services Why Deliver beneficial services to more affiliates. Cost savings. How Determine affiliate needs. Indentify potential vendors & get proposals. Negotiate for reduced rates based on multi-site contract.

28 Level 6: Shared Data Entry Staff What Single point of gift entry for simple gifts (and maybe running thank you letters to be printed by affiliates). Why Consistency in entry. Staffing easier to hire, less impact from turnover. How Determine where shared staff will live. Establish connectivity to individual databases. Agree to what kind of information these staff will enter. Route information to shared staff (mail transfer, faxes, s, etc.)

29 Level 7: Hub & Spoke (1 of 2) What - Consolidation and centralization of key business practices: gift processing and acknowledgment financial reconciliation generating prospect lists (direct mail, major gift) publishing standard reports, producing complex ones System-level database administrator supports end users with a high-level expertise. Individual databases may be centrally hosted.

30 Level 7: Hub & Spoke (2 of 2) Why Free foundation staff for fundraising. Efficiency, consistency, accuracy, timeliness. How Start small Choose two to four foundations to combine, usually one larger (has capacity) and the others smaller (have needs) Implement and refine Incrementally add other foundations

31 Level 8: System Wide Back Office What As with Hub & Spoke, but there s only one Hub, and many Spokes! Why Maximum operational efficiency. Maximizes use of fundraising expertise. Supports coordinated fundraising, benchmarking, sets stage for greater integration. How as with Hub & Spoke.

32 Level 9: Integrated Database/Independent Data Sets & Fundraising Data integrated into a single database BUT silos within the database. Multiple records for the same prospect / donor so that some information isn t shared between affiliates. Discussion of strategies around shared donors and some coordination of timing, but each affiliate still engages the donor themselves.

33 Level 10: Full System Integration Data, Operations & Fundraising What All databases rolled into a single fundraising system. Core business practices are centralized. All users have access for reporting and ancillary input. Why Support synchronization of fundraising strategies. Identifying and cultivating prospects Reporting results and refining strategies Realize substantive operational efficiency. Efficiency, consistency, accuracy, timeliness How Two Routes Gradual Start with any of the other goals, culminating in System Wide Back Office. Leap!

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