October 8, 2020
15 Minute Read
Health systems are putting more time and resources into community partnerships that address underlying drivers of poor health: food insecurity, unstable housing, lack of access to quality education, and more. Nevertheless, many development teams are reluctant to step outside their legacy focus on clinical and capital priorities. By not proactively supporting community partnerships, they risk a reduction of value to their institution and their donors.
In this report, we present the case for expanding the scope of philanthropy’s value to better serve emergent community health goals and describe three approaches to doing so.
In the context of this publication, the term “community partnerships” refers to collaborative efforts between provider organizations and external nonprofit organizations to address social determinants of health and related community health challenges outside of the clinical environment.
As hospitals and health systems increasingly adopt strategies to address the social determinants of health, their development teams are caught in an existential dilemma. Philanthropy professionals have long understood their role vis-à-vis the hospital as providing funding for internal investments: capital projects, clinical technologies, research, and so on. But with social determinants of health, the investment opportunities often exist outside of the institutional environment: community health programs managed, at times, in whole or in part by other organizations. In fact, an Association for Community Health Improvement study found that 78% of hospitals have community partnership strategies in place (including nine partners, on average).
Even though 72% of surveyed hospitals report not having dedicated funds to address social needs for all of their target populations, many development programs remain on the sidelines. Advisory Board’s philanthropy benchmarking survey found that the median hospital raised less than 4% of its funds in FY2019 for population health programs.
When asked why they aren’t yet helping to fund or facilitate community partnerships for their organizations, development leaders often explain that doing so would fall outside of their mandate. Quite simply, they argue that their development function exists in order to provide funding for the clinical enterprise. Any time or resources spent elsewhere necessarily detracts from that core purpose and riskscannibalizing their primary initiatives. Added to this fear of mission-creep is the reality that many foundations are incorporated as single-organization support entities with the IRS, thereby limiting their ability to provide funds beyond their hospital or health system.
While the mission of an organization should always be its guide, hospital philanthropy teams risk a loss of institutional value if they don’t proactively adapt with the health system as it expands to include a community health focus. They also risk losing interest among their funders, who are increasingly keen on supporting systemic and collaborative approaches to solving health problems.
The risk of inaction
As health systems choose to invest in social determinants of health, development teams must assume that those choices will impact their function. Consider the example of the foundation for a mid-sized health system that took on a fundraising initiative for a mobile health clinic, not realizing that in doing so they became implicitly responsible for managing the program until a clinical leader stepped up. At another health system, foundation leaders struggled to update their case for support to donors when the system announced it would begin making its own community impact grants to external organizations out of an operating revenue surplus. In cases like this, an unprepared philanthropy team may find itself challenged to perform even its core function.
Chief executives can at times move quickly—one CEO built a new strategic framework around health equity, including a new C-level position, within four months of attending an Advisory Board meeting on the topic. Foundations that do not anticipate these emergent strategies will be caught off balance, or worse, left unable to leverage their expertise and relationships as part of the solution.
New opportunities with donors
While avoiding these downside risks is essential, there are also upside benefits for development teams in pursuing a community health funding strategy. Individual and institutional donors indicate that community health investments are a top priority. A Fidelity Charitable survey of 3,200 individual donors found that the most important societal issues for both millennials and baby boomers are social determinants of health. A Grantmakers in Health survey from 2018 found that 88% of health-focused foundations and corporate giving programs invest in neighborhood conditions that shape health. More than 60% specifically fund coalition-based solutions. While hospital foundations may prefer to raise funds for internal investments, many of their existing and yet-to-be-discovered donors are excited by collaborative approaches.
The value of evolution
It is no longer necessary to interpret a foundation’s mission so narrowly as to exclude its involvement in community health funding initiatives. While constraints imposed by specific IRS determinations must be considered, we feel development leaders should proactively identify opportunities to add value to the organization’s community health strategy.
Foundations and development departments have deep expertise and established processes for fund procurement and distribution, project selection, and stakeholder engagement. This background can serve institutional goals as they evolve to tackle community health challenges. This publication outlines several approaches to creating value for the health system that extend the mission of the development team, while remaining within its core capabilities. These are not the only approaches available, but they have all proven their potential for success.
Philanthropy teams are uniquely situated to provide added value to their health system’s community health strategy, despite a long history of primarily funding clinical and capital projects. The following three approaches exemplify how philanthropy can improve community partnerships by using core capabilities in new ways.
Health systems will continue to deepen their commitments to addressing social determinants of health. And in doing so, they will pursue new investments in programs that are often managed—in part or in whole—by partner organizations. Philanthropy professionals must take notice and proactively identify opportunities to aid the health system as it expands its mission.
The approaches we outlined in this report are not exhaustive of all the ways foundations and development teams can support the work of community partnerships. Nor are they mutually exclusive approaches. The intent of this publication is to illustrate—using examples—three powerful and accessible strategies available to the typical organization. We hope that many other approaches emerge in the coming years.
Below are several guiding questions for philanthropy leaders and their teams to consider when charting their own path forward:
For additional support or questions, please contact philanthropy@advisory.com