Later this year, Baylor University Medical Center in Dallas plans to launch a $200 million to $250 million campaign to endow its medical education activities.
The medical center intends to ask donors to make contributions toward the endowment of its house staff, at $1 million per medical resident, said Boone Powell Jr., Baylor's president.
Baylor is at the cusp of a growing movement by medical centers to create endowments to fill financial needs that are being squeezed.
"I think this is probably one of the most critical areas in fund raising today," said Larry Baum, senior vice president of community relations at Cedars-Sinai Medical Center in Los Angeles. Several years ago, Cedars-Sinai raised $100 million in one of the healthcare industry's first major campaigns for endowment.
"With all the uncertainty emanating out of both the federal Capitol and the state capitals, hospitals must look to themselves (to ensure their future viability)," he said.
Marcus T. Young, president of American City Bureau, a Hoffman Estates, Ill.-based fund-raising consulting firm, said a small but growing number of his healthcare clients are including endowment in their major fund-raising efforts. He said a number of hospitals are combining endowment appeals with capital campaigns. They're using capital fund-raising efforts "as a hook" to gain support for endowment purposes, he said.
However, most endowment appeals are made through discussions with individual donors about their options for giving, Young said. It's a matter of relationship building.
Christ Hospital in Cincinnati, which has a nearly $20 million endowment, tries to tailor donors' interests with the hospital's needs, said William R. Talbot, vice president of development. "The endowments provide that income that might not otherwise be available, which can help you do those extra non-routine things," he said.
Talbot sees endowment building as one important element of a hospital's total fund-raising program. Such programs should provide the financial resources to offer services that may not be reimbursable, such as care for the indigent and funding to provide a margin of excellence above and beyond routine care.
"I think the challenge to hospitals these days in a managed-care and health reform marketplace*.*.*.*is that more and more institutions are going to be perceived as businesses rather than charitable institutions," Talbot said. "In terms of the hospitals' missions, therefore, there's going to have to be an increasing re-emphasis on the charitable character and the charitable mission of the organizations."