Donors have intensified scrutiny of healthcare providers' grant proposals.
The challenge is to ensure that the hospitals and small healthcare providers they invest in today won't be out of business five years from now. They also seek to avoid the trap of adding to the overall healthcare infrastructure if it doesn't lead to better care for the community.
Healthcare grantmakers "are tremendously concerned about doing the right thing," said Catherine E. McDermott, president of Grantmakers in Health, a Washington-based educational corporation that's supported by about 100 grantmaking organizations nationwide.
Sandra Cohen, regional program and contribution manager for BankAmerica Foundation, the charitable arm of San Francisco-based Bank of America, said, "In the past...people may not have questioned to the extent they do now what a project was going to do."
Now, BankAmerica tries to assess whether a grant is really going to help a hospital and community. If the funding is to be used for "a new high-tech whatever" and there's "one on every corner," the grant may not be helpful at all and could stick a hospital with an expensive technology that it doesn't have the volume to support, she said.
William C. McGinly, president of the Falls Church, Va.-based Association for Healthcare Philanthropy, isn't surprised that grantmakers are more diligent in assessing the standing of institutions in their communities. "I think that's just the natural evolution of what's going on in the managed-care race," he said.
Despite such concerns, healthcare remains a high priority of many grantmakers. Donations to health-related organizations increased 5.7% to $10.8 billion last year, according to the American Association of Fund-Raising Counsel, a New York-based association that represents fund-raising counseling firms.
The Association for Healthcare Philanthropy, which represents 2,500 healthcare development professionals, said overall giving to not-for-profit hospitals increased to $3.4 billion in 1993.
And, an analysis by the New York-based Conference Board found that corporations' median contribution of $670,155 to health and human services organizations in 1992 exceeded the median amount given to other charitable causes. But as a percentage of total contributions, gifts to health and human services are shrinking, the analysis showed. The median contribution to health and human services dropped to 34.6% of total giving in 1992 from a high of 41.1% in 1982.
Ongoing changes in the nation's healthcare delivery system have intensified the challenge of investing wisely, grantmakers said.
"We're not requiring greater information, but we're certainly looking at the return on our investment closer," said Dyanne M. Hayes, assistant vice president of the Conrad N. Hilton Foundation, a Reno, Nev.-based grantmaker. The foundation seeks to make grants that meet a real need in the community served by a hospital or clinic, not "just to perpetuate their existence," she said.
Len McCandliss, president of the Sierra Health Foundation, a private foundation in Northern California, said, "The question of survival of many of the safety-net providers and small providers is an issue for us very often." In considering grants to clinics and other small providers, Sierra often asks, "Is this a provider that's going to survive?'*"
The foundation tries to assess the provider's chances of survival, but if it can't, "we may stand back from the grant," Mr. McCandliss said.
Indeed, there have been several instances in which Sierra has decided not to make a grant for this reason.
The Houston Endowment, which funds charitable causes in Houston, Harris County and the state of Texas, has it a little easier because recipients of its grants are usually known quantities, said Michele J. Sabino, a grant officer at the Houston-based philanthropy.
This year, for example, the Houston Endowment gave a total of $2 million to M.D. Anderson Cancer Center, Memorial City Medical Center and St. Joseph Hospital, all of which have longstanding relationships with the philanthropy and good track records in the community.
Still, increased scrutiny by many donors is having a noticeable impact, development experts said.
"The decision to support an organization is taking longer," said Brad R. Holmes, vice president for philanthropy at St. Luke's Medical Center in Milwaukee and a vice chairman at the Association for Healthcare Philanthropy.
Several years ago, St. Luke's embarked on an effort to build trust by getting donors more involved in the hospital and showing them how their donations are being invested. The hospital invites individuals and small groups to see its cancer research operations, for instance. Guests have included the heads of corporate giving and medical directors of three of Milwaukee's major corporations.
"Relationship building has to come first," Mr. Holmes said. "Without the trust, there isn't going to be any major type of support."