COVID-19 has created a perfect financial storm for our nation.
Almost 3,000 nonprofit hospitals struggle with expenses to address the virus, canceled elective procedures and ambiguity about what the government will ultimately fund—on top of a decade of thin median operating margins.
However, there is a valuable revenue resource many are failing to effectively tap right now: voluntary charitable giving from individuals, corporations and foundations. Many organizations express discomfort and uncertainty about asking donors to give given the health crisis and economic uncertainty.
However, past crises, including the 2008 recession and the terrorist attacks on Sept. 11, 2001, show giving continues and shifts toward the affected sector in a time of crisis. Many donors value giving as a way to actively participate in providing solutions.
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So, it is incumbent upon hospitals to give donors the opportunity to help address the crisis by making charitable, financial gifts to their local hospital.
To provide further context, $427 billion was given in charitable contributions to U.S. not-for-profit organizations in 2018 with almost $40 billion of that benefiting health causes. Of money directed to health causes, $10.8 billion specifically went to U.S. not-for-profit hospitals and health systems.
Philanthropy is also incredibly leveraged.
While a hospital performing at the current median operating margin of 2.1% would need to earn almost $48 million from clinical operations to have $1 million to reinvest in the hospital, hospitals that receive just $1.3 million in charitable gifts would achieve the same financial impact.
Right now, America’s hospitals need philanthropic investment to aid them in fighting COVID-19. While needs evolve day to day and community by community, philanthropy not only could assist in securing protective personal equipment, obtaining ventilators and building ancillary treatment areas to prepare for the anticipated surge but also can address very human needs, such as:
- Enabling temporary shelter to clinicians who fear carrying the virus home
- Procuring iPads to enable those who are sick or dying to stay connected to loved ones
- Providing emotional and psychological support to healthcare teams on the front line
- And much more
While financial gifts to hospitals are generally tax-deductible, the COVID-19 Stimulus Bill also encourages charitable giving by providing a $300 above-the-line charitable income tax deduction. This will not only give non-itemizers a tax break but also will reduce your adjusted gross income, which could trigger other tax benefits.
As hospitals overcome incredible obstacles to diagnose and to treat those seeking care for COVID-19, it’s time to ask others to help. The need is real. The time is now.
Betsy Taylor is a 25-year leader in advancing healthcare philanthropy in community, academic and children's hospitals.