Many US Hospitals Are Depending on Donations for Their Financial Health

Hospitals are a vital part of the infrastructure of civilization. Also, a lot can be said about a community depending on the state of its hospitals.



The first hospital was built in the fourth century in present-day Sri Lanka and the infrastructure has come a long way since then. A doctor’s ability to see patients in a timely and accommodating manner depends on the quality of the hospital and the space it provides.

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Often, many people rate their hospital visits based on how they were treated by doctors, nurses, and other medical personnel. But all of their actions are strongly linked to the hospital building and management.

With so many things to care about, running a hospital is a tedious task. State-of-the-art hospitals with modern-day technology are quite important for the health of the community and the overall health system. However, maintaining and managing such a hospital is proven to be quite expensive. Ridiculously expensive, in fact.

An important aspect of hospital management is the financial health of the hospital, which basically is a term for the state of the hospital’s finances or it can be better generally defined as, ‘an ability to manage expenses, prepare for and recover from financial shocks, have minimal debt, and ability to build wealth.’

Another important aspect to look into, especially when analyzing and assessing the hospital management and infrastructure, is ‘financial performance,’ which is a subjective measure of how the hospital uses its primary assets to generate revenue.

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Types of Hospitals

There are three types of hospitals in the United States, each of which has varying financial health and financial performance value.

Fully Private Hospitals

These are privately owned hospitals that are backed by shareholders and investors, and follow the same management plan as any other privately owned business.

These types of hospitals are quite burdening on the patient’s pockets, and that is one of the ways how they gain revenue. They are not a reasonable choice for those with low socioeconomic status. However, these hospitals often do pro-bono cases to help out those who need it. Sometimes, an organization backing this hospital may collect a fund to make these hospitals more accessible to all.

They gain revenue from their board of investors who are convinced into financing the hospital through lavish fundraising parties and charity events often held by the hospital board of directors.

Public Hospitals

These hospitals are run by the state or the government and cater to all people, regardless of social status. They are actually obligated to treat underserved populations.

They are a more affordable option and usually backed by the tax-payers money. But the wait time in these hospitals for the patient may be longer, given that it is the hospital that most people, especially those from underserved communities, are likely to visit.

The hospital infrastructure may also be quite poor in certain regions due to the lack of governmental funding. However, most public hospitals generally have good infrastructure.

Non-profit Hospitals

Non-profit hospitals are private hospitals that do not make profits or revenue for the owners, but rather work for and serve the community. These types of hospitals are exempt from paying income, property, or community taxes as far as they are providing a certain amount of ‘community benefit’.

They are often associated with a charitable cause or have a religious denomination. However, that is not necessary. Most of the hospitals in the United States of America are actually non-profit hospitals. In fact, in New York, all hospitals, by law, have to be non-profit hospitals except outpatient surgical centers. These hospitals depend on patient donations to keep the hospital up and running.

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How do hospitals get donations?

Hospitals, especially non-profit ones, are always in need of donations to keep themselves afloat. Many people think that since non-profit hospitals are exempt from paying taxes of any sort, and that they are privately owned, these hospitals must be thriving and profitable. That couldn’t be far from the truth.

Yes, the nonprofits have a tax exemption but what is important to remember is that these hospitals are often dependent on donations. Without these donations, the hospital infrastructure is likely to crash.

So, how do these hospitals convince their patients and benevolent investors to donate and be a part of something big?

Fundraiser Events

Non-profit hospitals and the charity organizations running them will often hold lavish fundraising galas and parties to collect donations for their hospital.

They may hold a fundraising event for a specific medical condition to raise awareness and combine that with corporate philanthropy under corporations that will receive positive publicity and even get to promote their specific products in exchange for ‘sponsoring’ the hospital’s event and giving a generous donation. These types of events result in a mutually beneficial relationship with the great marketing of both.

Sponsorship of large corporations is also bound to highlight the hospital and increase donations in the long run.

Patient Donations

Some hospitals may also ask for donations from their satisfied patients to increase net revenue for the hospital. The patients are given the opportunity to donate in order to honor a friend, family member, or even hospital staff like a nurse or a doctor.

Patient donations are often solicited by the use of a patient satisfaction program–making a donation to the hospital as a way of expressing gratitude.

This type of program needs to be run with extreme care as even a slight slip-up can be a huge violation of the HIPAA laws, landing the hospital and the associated staff in hot water.

Online Donation Forms

Some hospitals have online donation forms and programs that they market religiously on their website and all social media platforms. These forms are a relatively low-budget way of soliciting donations and they are the only ones that provide a wider audience reach.

These forms also allow the donors to put just as much personal information as they want, allowing certain donors to be anonymous if they wish to do so. Moreover, this method of donation collection allows donors to choose the amount of money that they would like to donate without any obligations.

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How do hospitals thank the donors?

Everyone who donates to a nonprofit hospital is a hero as they help improve the healthcare system and infrastructure in the United States. Their donations are not lost on the hospital and they are hugely appreciated by the board who make their appreciation very visible. They may show appreciation in various ways, a few of which are mentioned below:

Donor Recognition Walls

Donor Recognition Walls used to be massive plaques in the general entrance of the hospital with the names of the donors engraved in a list. This was done to thank the donors publicly for all their contributions to the hospital and the healthcare system.

Nowadays, the donor recognition walls are no longer wooden or glass boards but rather a digital screen with a list of donors. This obviously has benefits over the old method as it allows for frequent, remote-access additions of donors to the list.

This public appreciation not only sits well with the donors but also encourages more people to donate.

Hospital Wings/Rooms named after Donors

Some hospitals, both private for-profit, and private non-profits, often name hospital wings after their donors. Donors can even have the wing named after someone they care about, like their parents or spouse. This allows donors to be remembered throughout time as long as the hospital exists, making them feel appreciated.

Post Donation Landing Page

After an online donation, most online donation programs will redirect you to a ‘Thank you for your donation’ landing page that explains how your donation will help the hospital.

Although this is just seen by the donor, it is more than enough as it makes donors feel good about themselves and explains to them why their donation was important. This increases the chance of re-donation, allowing them to keep on supporting the cause/hospital.

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Thank you (Premium) Gifts

Some non-profit organizations may give their donors a thank-you gift, something related to their cause, to appreciate them, and to raise awareness about their organization and the cause.

Donor Recognition on Social Media Platforms

Nowadays, a good social media strategy is one of the keys to success. Hence, for non-profits to reach a wider range of audiences, they need to be on social media. This helps them raise awareness and connect with other brands, charity organizations, individuals, and firms that may like to support them.

Mentioning donors on social media with a thank-you note makes the donors feel appreciated and broadens their connections, hence acting like a mutually beneficial relationship.

Although non-profit hospitals are under constant scrutiny for asking for donations and not paying taxes, they have no other choice. Especially during the COVID-19 pandemic, these hospitals have taken a major hit and are suffering greatly. They need donations to keep on running and benefiting the communities.

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