Big gifts drive the success of a healthcare philanthropy program

The success of a philanthropic program depends on a robust principal gift program that has the support and investment of organizational leadership.

As hospitals and healthcare systems seek ambitious growth targets and innovative advancements in their clinical programs and organizational footprint, philanthropy is becoming a key part of meeting those goals.

While philanthropic programs can grow in many ways, the most critical component is a robust principal gift program that has the support and investment of organizational leadership.

Principal gifts are typically defined as at or above $1 million, although that baseline may shift depending on the size of a healthcare system. These big gifts have the power to transform an organization while showcasing an individual or community support. Effective philanthropy programs in healthcare can typically attribute 40% to 50% of their revenue to principal gifts. According to the Association for Healthcare Philanthropy’s 2020 Report on Giving, high performers have the highest average number of these seven-figure gifts.

Substantial donations are becoming more and more frequent. In December, Becker’s posted a list of the 12 largest donations in 2021.

While principal gifts set the foundation of healthcare philanthropy, they require methodical planning and deliberate execution to be successful as well as dedication from the C-suite, the board, the foundation, and clinical champions.

A hospital board or foundation should be a significant source of community connections, feeding the pipeline to a principal gifts program. Similarly, the clinical team can often provide a referral or introduce a grateful patient or family to the development office. A hospital’s CEO may also make connections, but often they are a key part of strategic conversations and cultivating the donor relationship into a commitment.

In order to move donors through the pipeline, the process for managing principal gifts requires structure, clear operational procedures, consistent use of data, and focus. The philanthropy team needs to carry out a series of methodical steps to close big gifts successfully.

1. Programs should clearly identify their revenue and activity goals. For example, if your organizational goal is to raise $20 million per year, then approximately $10 million should come from principal gifts. If your average principal gift has been $1 million, then you’ll need to close approximately 10 gifts. To close 10 gifts, you’ll probably need to ask for 20 gifts and you’ll need to actively manage 50 or more prospects.
2. All individuals in your CRM along with your patient list should be screened to identify their giving capacity. All individuals with the capacity to donate $1 million or more should be coded in the database as “Principal Gifts.”
3. All coded principal gift individuals should be prioritized as either “top prospects” – these are your 50 prospects (as noted above) who have been qualified for capacity and interest and whom your team is actively managing for a future gift; “middle prospects” – these are individuals whose assets have been confirmed but have not been qualified for interest; “low prospects” – these are individuals who have not been qualified for capacity or interest.
4. Before any identified prospects are assigned, organizations should review their gift officer’s portfolio of prospects, removing any names that are not high priority and making room for new names.
5. With an identified pool of individuals in your database and clean gift officer portfolios, an organization should assign all top prospects and as many middle prospects as are required to fill all gift officer portfolios.
6. Build a key performance indicator (KPI) dashboard to manage activity and revenue progress.
7. Create a list of giving and naming “opportunities” for your organization and begin to match your organizational priorities to the interests of your prospects. Consult regularly with appropriate system staff to continue to identify compelling cases for support.
8. Regular communication is important: meet weekly to review the last week’s progress and actions taken on prospects and set the plan for the following week; also, development staff, the CEO and other key stakeholders should meet weekly to establish the strategy for the solicitation of top prospects, the cultivation of middle prospects, and a qualification plan for low prospects.
9. The CEO and other leadership positions should expect to routinely discuss and review the strategy for prospects.
10. Add all actions and activities to the database.
11. Manage all communication and stewardship for all principal gift donors. Ongoing communications about the gift including annual reports, events, or press releases should also be shared and celebrated.

With the support of Gobel Group, the nation’s leading healthcare philanthropy consulting and technology firm, Hackensack Meridian Health – the largest healthcare system in New Jersey, began a process in 2021 to create a structured and disciplined principal gift program.

In prior years, Hackensack Meridian Health would close approximately 8-10 principal gifts per year. In 2021, Hackensack Meridian Health closed nearly 20 principal gifts. “We’ve had a strong pipeline in the past along with strong gift officers, but we had not built a system that proactively and aggressively managed these relationships to ensure each top prospect was moving forward to an ask. Once we put that in place in 2021, we began to create the movement required to close more and larger gifts. We expect even greater results in 2022 and beyond,” said Joyce Hendricks, President of Hackensack Meridian Health Foundation.

Principal gifts are often the determining factor in driving significant and immediate growth in philanthropy programs. Building a system that drives strategy and execution and effectively engaging organizational leaders are critical to the philanthropy program’s success.