More Need for Philanthropy…Now More than Ever

How important will philanthropy be in the future? Just consider two recent articles, completely independent of each other, but when placed together provide potential catastrophic financial impacts on two of the largest industries in the nonprofit sector.

The first article came from Becker’s, in late September, and talked about hospital losses now totaling $54 billion this year. The article comments on a report done by Kaufman Hall in partnership with the American Hospital Association and indicates that delayed care, higher expenses for supplies, labor challenges, and drug pricing will affect the bottom line of hospitals across the United States totaling a $54 billion net loss even after taking into account specific coronavirus aid provided by the federal government. The second article, from Bloomberg, in early September, commented on the financial status of multiple higher education institutions, in particular those around the Philadelphia area. University of the Sciences, Saint Joseph’s, LaSalle, Washington and Jefferson are all in deep financial strife. One had its debt rating cut to a junk level, two others were considering merging, and one was considering removing several colleges or majors out of its institution.

While philanthropy can’t fix the totality of either industry, it may well become the investment vehicle for organizations to grow. I have a client in a system who is indicating to their local hospitals that the total amount of investment capital to purchase equipment and expand services may be as little as 10% of its pre-pandemic total. I also have a dear friend, who I have spoken with recently and is the vice president of a really great liberal arts private college, who said that the pressure from the president and the board of trustees to find revenue streams through philanthropy has increased exponentially in the last 18 months. And in particular, defined unrestricted dollars, if it all possible, to stave off major cuts and changes to the organization.

Now is the time for philanthropy leaders to be running to their CEOs and boards. To be aligning with them. To be educating as to the importance of fundraising with the proper investment. To show the return on investment that can happen with proper resources and great support. And most importantly, explain how donors and their philanthropy truly can be used for strategy and growth. While what we do won’t save everything for everyone, it has the chance to be the difference maker in the life and being of many organizations.