Why Healthcare Philanthropy Ranked LAST In Growth

With the 2020 pandemic, healthcare was top of mind for every community across the country, and in-kind donations were at an all time high, topping $170,000,000 nationally, but even though charitable giving has grown over the last few years (even through the pandemic) healthcare philanthropy has seen much smaller jump in cash donations, when compared to the 10 other top charity subsectors.

According to a Blackbaud study involving thousands of nonprofits, the three year rolling average for philanthropic growth ranged from 7-26% across the subsectors of animal welfare, arts & culture, environment, faith communities, higher education, human services, international affairs, k-12 education, and public safety & benefit. Healthcare only saw a 2.6% growth, and medical research actually showed a decline of 3.6%. Charitable giving is supposedly at its highest ever, so what's happening here? Experts believe it could be a combination of the following factors:

The average healthcare donation was already on the high end, and other sectors are catching up faster. Besides education, healthcare has been towards the top for decades in term of a philanthropy engine, specifically with gift size. Lots of buildings, wings, or expanded areas in hospitals/hospices are named after big donors because that was the focus of healthcare philanthropy for so long. Healthcare is still a strong philanthropic contender, but many of the once smaller subsectors like environmental charities, human services, and international aid have seen strong growth recently and have caught up or passed healthcare.

Newer younger donors care less about healthcare and more about other sectors. Those who care most about healthcare philanthropy are those with the closest experience to it, and as those donors age-out, so does the desire to be involved in local healthcare philanthropy. There is some industry debate on whether this is a generational issue or just a cycle, but we know it's more challenging to keep younger donors engaged in healthcare.

Other subsectors are struggling less financially, so have the resources to launch large campaigns and ask for big gifts. The road for hospitals, hospices, and community health clinics has been a struggle over the last three years, and that paused campaigns and moved projects down the road to be revisited later. With no specific objectives available for so many months, healthcare philanthropy stalled as well and is just beginning to relaunch as an industry.

Healthcare fundraisers shifted to remote work sooner than anyone AND were the slowest to return to in-person philanthropy. We know that asking for money over Zoom is possible, just much harder, especially with older donors, who tend to be the biggest contributors to healthcare. By the nature of the work, the optics of in-person meetings with healthcare staff members (even those on philanthropy teams) were shaky much earlier and much later than in other subsectors.

COVID-19 changed the major priorities for healthcare nonprofits overall. With the pausing of elective surgeries, staffing shortages, and strains on emergency rooms, healthcare admins shifted out of growth mode and have been slow to return to big capital expansion projects - which is where the big money is. Strategic plans that involved risk, growth, and investment have changed to involve longevity and stability, to which the fundraising industry will have to adjust.

So what is to be done about this? We know investing in our major giving programs and philanthropy teams is one of the best ways to grow the organization financially, and with some help, healthcare can pivot (to use everyone's favorite pandemic word) to focus on programming, endowment, and capital needs that will support the longevity of the industry.

But what do you think? Is this just a slump, or do we need more sweeping industry change to keep healthcare philanthropy moving forward? Join the conversation on one of our Free Virtual Forums every other Friday morning!