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Advancing Health
From Dollars to Difference: How CommonSpirit Health's Donor Support Drives Community Health
00:14:42
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- [00:01]
A
Welcome to Advancing Health. Philanthropic support of a hospital or health system can support tactical investments that will impact a community for years to come. In today's podcast, we hear how Common Spirit Health leveraged its donor support to create a plan that helps unlock other investments that continue to drive the mission.
- [00:24]
B
Welcome to Advancing Health. My name is Sue Ellen Wagner, Vice President of Trustee Services with the American Hospital Association. Very happy to have with us today leadership from Common Spirit. Specifically, we have Daniel Morissette, senior Executive Vice President and Chief Financial Officer, and Nancy Busani, Executive Vice President and Chief Financial Officer and President of the Common Spirit Health Foundation. Dan and Nancy, very happy to have you with me today.
- [00:55]
C
We're thrilled to be here.
- [00:56]
D
Thank you, Sue Ellen.
- [00:58]
B
Philanthropy can have a huge impact in helping a hospital or a health system achieve its mission of caring for patients while also supporting operations. What role is philanthropy playing right now in health care? And can you each talk about what is happening at Common Spirit?
- [01:16]
C
Thank you so much for that question. I guess I can summarize it briefly first by saying it plays a huge role in helping us achieve our strategic capital and operational objectives. And so the money that we receive from our various philanthropic sources really does make a dramatic impact on funding our mission and doing the strategic initiatives that we have ongoing of providing even cash flow support to some of our important endeavors. And as you know, in today's health care environment, it is, I can't recall a time where it's been more challenging just from a pure operations standpoint. So at Common Spirit, Nancy will go into this some, but at Common Spirit has made just a dramatic effect in our various communities.
- [02:06]
D
Well, thank you, Dan. And I know our goal when we raise funds is to make sure they really make a difference for the health system. Last year we raised about 316 million, which was really in a very challenging environment where there was some volatility in donor sense of how they want to give. And we did it in an environment where we had to streamline, where we really had to look at how do we make sure that we're as efficient as possible. So we had a return on investment about $5.25, so that every dollar that came in really provided $5.25 back to common Spirit. So, but that's only as good as where it goes. So I think the strategy of making sure it goes for the most critical programs and equipment and facilities is really one of the most important things we're focused on right now.
- [02:56]
C
I'll just add to what Nancy said, you know, $316 million does make a really big difference for us at Common Spirit Health. But it is important that we think about the fact that, you know, our alternative sources of revenue, you know, like, such as patient care revenue, we would need to generate much, much more than the 316 million to actually have the same impact in our margins. So, you know, reverting to my CFO background, when you look at patient care revenue, we would need to generate about, oh, $100 or so in patient revenue just to net about $4 after you're done with all the expenses. But as Nancy said, when we look at it from a philanthropy standpoint, for every $100 that we're able to receive, we do net about $81. You know, it really does have a big impact, particularly on the, you know, community based programs and initiatives that we have in our various markets. Therefore, I just want to mention that philanthropy is just a huge piece of what we need to do to be more and more effective from an operational and financial standpoint. And so it's been just a thrill for me to be part of our growing enterprise here because it is so critical to what our mission is. You know, it is important to add that, you know, philanthropic funds have become a pretty significant data point when we meet with our outside investors with bond rating agencies and the like, because it is one way to help assess the strength of the health system's creditworthiness and its bond rating. But also it does help to know that the donors have confidence in us and the value we're bringing to our community. So the dollar amount really does make a difference from just a pure financial and operational standpoint because it is an alternative revenue stream that is of course, less sensitive to the volatile environments we deal with like payer mix and reimbursement pressure and fluctuating volumes. So, you know, philanthropy oftentimes does offset some of our debt funded capital project. Therefore, it does reduce our leverage as well as strengthen our balance sheet.
- [05:20]
B
Very important points about the value of philanthropy. Just to expand a little bit on what you both talked about, philanthropy can be a strategic investment and it has the value beyond the dollars raised. You both mentioned that a little bit. Can you expand a little bit and talk about why health care leaders should view philanthropy as a strategic investment in addition to what you've already said.
- [05:44]
C
Well, first of all, we have so many projects in the large health system. Like we have even been a community based health system. And so we have both immediate needs. And I'm always asking Nancy whatever she can do to get us unrestricted gifts that we could apply. It is important that we align our operational and our strategic leaders to partner closely with our philanthropy team so we can make sure the donations we receive do have the greatest impact possible.
- [06:14]
D
I think you can tell Sue Ellen how lucky I am to have a CFO that understands the nuances of philanthropy, that, you know, donors, at the end of the day, are going to give where they're most passionate. But I do believe donors want to make the biggest impact for their entire community. And so when philanthropy teams have a seat at the table with their strategy leaders, with their hospital presidents, with their executive leadership, they can listen and understand where that strategy is driving the most critical investments. And it's those conversations with our donors that help to make for the best match. So when they do give, they understand how they're making the biggest impact. So we really do work hard to make sure that our leaders, we have 80 foundations throughout all of Common Spirit, they each have a seat at the table with their leadership team so that they can listen, they can learn, and they can understand how to have those important conversations with donors to make sure those dollars make the biggest difference they can. So it's not just about the volume. It's about the purpose. And to me, that only happens if your philanthropy leaders are sitting at the table listening to those conversations. Dan and I have had a lot of conversations about the timing of that, too. How do you have those conversations at the right time? And he's been, well, I'll let you talk about that, Dan, because you've been really helpful in helping us to determine when philanthropy needs to be brought in.
- [07:47]
C
You know, Nancy, that's a great point. Certainly, I agree with that. Right. We know that the timing is really important because, you know, if you engage the donors too early in the process, and then somehow we decide for various reasons that the project doesn't go forward, you know, it can create some negative feelings in the, you know, in our donor community. And then, of course, on the flip side, if you wait too long and the major project is already up and running, going, you know, most donors feel like their support might really be needed. So, you know, we are continually encouraging our strategy and finance teams to include philanthropy, you know, so that we can all get, you know, better at finding that balance of the, you know, the desires of the donors, I'd like to point out that how critical philanthropy can be to innovation for a major health system like ours, as well as for the future of healthcare, philanthropy can really help support to make a difference. From an innovation standpoint, certainly we as a mission based health system are fully devoted to serving everyone in our communities. With certainly we have a unique strong focus on those who are most vulnerable. But with the healthcare dollar so tight right now, we often do wish to rely upon our donors, whether they be individual corporations, foundations, government agencies, you name it, to invest in our vision for what innovative programs or research is going to make a difference in the future. It can be our most dedicated, long term and connected donors that will walk with us to launch high risk, but hopefully super high reward projects.
- [09:30]
B
Thank you so much. Nancy, you talked a little bit about the importance of having a seat at the table. So successful philanthropic initiatives really need the support of the board and executive leaders. And I believe that equates to having a seat at the table. Can you talk about both of you? What are the ways you see boards and leaders fitting into your philanthropic investments?
- [09:53]
D
Yeah, absolutely. Well, I want to start by saying that our CEO Wright Laster, has been very supportive of the importance of philanthropy and he plays a really strong role in it. He serves not only as the CEO for Common Spirit, but he's also the CEO for our national foundation. And that sends a really strong message to our boards that we have the attention and the investment of the leadership we have throughout all of our AD foundations, about 1500 local board directors. And so it really is that connection between our philanthropy leaders, understanding the strategy, being able to articulate it, and then taking that back to those board directors and helping them be our advocates. They can only help us as much as we give them the information to help us. So being able to have kind of those succinct messages about what really is going to move the hospital forward in their community, what's going to make us be able to provide the best clinical, excellent care to everyone. Because as you heard Dan say, we have a lot of hospitals in very vulnerable communities. But our goal isn't just to open the doors and have access. It's to make sure that everyone has the best care. And that's where our donors come in. They can make the difference between covering our costs and creating great investments in the innovative programs that really make us excellent. We can't do that without the boards. Their voices really help to expand. So you take in a community, two or three executives and the philanthropy leaders, and then you maximize that by 20 or 30 people on your boards who typically are very influential people in their communities. That's where we start seeing true visibility and awareness and belief in the work we're trying to do. So I can't overestimate the value that our board directors have in making these investments a reality and the right investments.
- [11:56]
B
And Dan, do you want to elaborate any more on that point, just really briefly?
- [12:01]
C
Thank you. Over the years, I've gotten more and more involved in partnering with our philanthropy teams and making sure that all of our local chief financial officers, for example, at our hospitals and within our regions, they do know the importance of putting every dollar raised into action. So I consistently discuss philanthropy in our regular meetings, but also go through issue a quarterly memo to all the CFOs to share how critical it is for them to work with their philanthropic leaders to get the funds transferred so that we can put it to good use. And this certainly helps our philanthropy leaders by having equal partner on the financial and operational side of the hospitals.
- [12:47]
D
And that's information that when that doesn't happen to Ellen, if you don't have a CFO that partners with you that way, sometimes our dollars don't get put into action as quickly as we need. We cannot go back to donors and to boards and show the impact of their investments if that doesn't happen. And so it's such a critical bridge for us to be able to say, not just raise the money, but to demonstrate back to those who were generous to us how we used it and the impact that made. And so sometimes it's this financial partnership that allows that to happen with everything going on. That's not always the top priority for a CFO to make sure those dollars get transferred to cover all of those costs that those dollars will help to support. And it really doesn't allow us to feed back to the board what's happening in their communities if we don't have that partnership. So it really has changed how we work with our CFOs throughout all of the hospitals.
- [13:47]
B
Love those final words. Thank you. Well, Dan and Nancy, thank you so much for being with me today. You've talked a lot about the importance of not only your CEO partnership, but your CFO partnership. So I think our listeners have a lot to learn about that. And really, given the complex environment that we're in, still, being able to get that return on investment for your philanthropic dollars is really important so that you can continue to fund your innovations and your initiatives. And getting that board to, you know, be supportive and participating in the philanthropic initiatives I think is really important. So thank you both, really appreciate all of your great information.
- [14:29]
A
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