UH News

Donors augment University Hospitals' profile

Monday, March 11, 2013

Health system has transformed itself into a fundraising behemoth that is almost on par with the Cleveland Clinic


Cleveland - Over the last decade, University Hospitals has built up not only its physical footprint but also its philanthropic muscle, morphing from a sleepy enterprise that raised about $13 million annually in the 1990s and early 2000s into a giant that now brings in more than $100 million a year in donations.

University Hospitals' transformation into a philanthropic powerhouse was fueled by a $1 billion fundraising effort the health system quietly launched in 2004 — the year its fundraising chief, Sherri Bishop, joined the system's ranks. University Hospitals reached the $1 billion milestone last December, but with its donors showing no signs of closing their checkbooks, the health system vowed to raise another $500 million. So far, the system has brought in $1.03 billion.

We think of it like a surfer riding a wave,” said Ms. Bishop, UH's chief development officer. “This wave has been getting bigger and bigger, and we weren't seeing signs of it stopping.

Given University Hospitals' size — it posts about $2.2 billion in annual operating revenue — philanthropy experts say the breadth of its fundraising push is bold and unusual. By comparison, the nearby Cleveland Clinic, an organization with about $6.2 billion in annual operating revenue, closed a major fundraising campaign in 2010 with about $1.41 billion in its coffers.

That is very special,” said Bill McGinley, president and CEO of the Association for Healthcare Philanthropy, of the UH fundraising prowess. “What we have seen in the health care arena is that a billion-dollar campaign eight or 10 years ago was almost unheard of,” said Mr. McGinley, whose group is based in Falls Church, Va. “As they (health care institutions) have built their (clinical) programs and become more sophisticated, they've awakened to the fact they have to invest dollars to raise dollars.

Last year, University Hospitals brought in a staggering $159.6 million, its most impressive showing to date thanks to a handful of large gifts, including a

$50 million donation from the Harrington family to launch a major drug development initiative.

That successful year puts UH alongside the Cleveland Clinic, which reported raising $148 million in 2012 — a 17.5% increase over its previous year's totals. At the height of its own capital campaign in 2008, the Clinic brought in just north of $180 million.

Proving its worth

University Hospitals launched its big fundraising push as it was plotting its ambitious, $1.2 billion Vision 2010 construction initiative that inspired a bevy of new facilities, including the $298 million Ahuja Medical Center in Beachwood and the $260 million Seidman Cancer Center on Euclid Avenue in Cleveland. UH also saw success in raising cash to recruit top-notch physicians, securing money for 46 of the system's 65 endowed chair programs during the course of the campaign.

Ms. Bishop cited the involvement of administrators and physicians in selling the community on what they thought University Hospitals could become if it could pull off its commanding construction plan.

UH formed so-called leadership councils comprised of donors, physicians and administrators. On the councils, donors serve as strategic advisers for the health system and drum up philanthropic support through their connections. UH also dispatches administrators and physicians each year to Florida to rally support from local donors who move south during the winter months.

With a slew of new facilities and programs to show off, the health system hasn't seen a need to halt its appeal for more philanthropic dollars. “We had to inspire donors with facilities and programs that didn't exist,” Ms. Bishop said. “We didn't necessarily have the credibility to fulfill our promise because this was an extraordinarily ambitious undertaking. People didn't have proof UH could deliver on that. When we reached 2010, we had tremendous credibility as an organization.”

University Hospitals also is competing successfully with the Clinic, Case Western Reserve University and the region's large performing arts organizations in terms of the quality of fundraising professionals it's recruited, according to Nancy Osgood, a local consultant who works with nonprofits and lectures at Case Western Reserve.

I think they've joined their ranks in terms of being a very competitive buyer of development talent in the marketplace,” Mr. Osgood said. “It's not surprising to me that they're ramping up their fundraising machine in terms of the actual results they're producing.

Plenty of room in the pool

Officials at both the Clinic and University Hospitals shrug off assertions either party could see dips into their own fundraising pools because of the big dollars they're both pursuing. They instead suggest that University Hospitals' mounting philanthropic might and the Clinic's continued success are evidence health care giving is on the upswing after tumbling during recession.

In 2011, hospitals and health care organizations raised $8.94 billion — an 8.2% increase over the previous year's numbers, according to the Association for Healthcare Philanthropy. While 2012's totals aren't yet available, the association's Mr. McGinley expects that number to grow as the economy slowly improves and health care organizations look to offset cuts in insurance reimbursements from commercial and government payers.

Other observers suggest the success is a reflection of Northeast Ohio's growing reliance on the health care field as its economic anchor.

“We were struggling for three or four decades to transform ourselves from an economy rooted in smoky industries to one based on services, and here's an indicator we're doing it,” said Stuart Mendel, director of the Center for Nonprofit Policy & Practice at Cleveland State University. University Hospitals' concerted fundraising push hasn't dinged the Clinic's numbers, which have been buoyed since Armando Chardiet, a former University of Pennsylvania Health System fundraising official, took over the Clinic's fundraising operations in 2010.

Officials at both systems noted that donors aren't typically aligned with a particular institution.

Lee Seidman, founder of The Motorcars Group, and his wife, Jane, have made major financial commitments to both the Clinic and UH in recent years. The couple contributed $42 million to University Hospitals' new cancer hospital and $6 million for a new patient tower. The couple pledged $17 million to the Clinic in 2006 to endow a chair in functional neurosurgery and to advance research in areas dealing with the heart and the brain.

Most individuals choose based upon that project in that organization,” said Nelson Wittenmyer, vice chairman of the Clinic's philanthropy institute. “Donors don't see it as one against the other.

Give Now

To find out more about how you can make a difference at UH, contact us: