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As the saying goes, there’s never a good time to raise money. However, as the global financial crisis has deepened, the past couple of months have been particularly challenging for Greater Des Moines’ health-care foundations.

The Iowa Health Foundation, which earlier this year lost a major naming commitment that had made up more than half of its $28 million West Hospital campaign, has experienced further setbacks as potential donors face new economic uncertainties.

“We’ve been talking with potential donors who are in that six- and seven-figure range, and felt we were making progress at getting some commitments,” said Dennis Linderbaum, the foundation’s president. “Then (the events of) September, early October happened, and as with lots of businesses and individuals, they’re concerned about what’s going to happen with the economy. So we’ve got to be patient.”

The current economic conditions have made non-philanthropic funding sources tighter than ever for health-care organizations, said Bob Ravenscroft, president of Mercy Foundation. That’s making the foundations’ efforts to fill the gaps more important than ever, he said.

“There are essentially three ways to reinvest capital into your facilities: You can earn it through the services provided, you can borrow it or you can raise it,” he said. “With what’s going on in the economy and the insurance constraints that people are under, people are choosing not to do elective (medical) procedures, so that makes it more difficult to truly earn it. The borrowing environment is not unknown to anyone, and that’s why I could see us entering a golden era for health-care philanthropy.”

Different tack

Both of the nonprofit foundations are responsible for assisting a broad array of organizations. Mercy Foundation provides support for both Mercy Medical Center – Des Moines and Mercy Medical Center – Centerville. It also helps fund the Bishop Drumm Retirement Center, the House of Mercy shelter for chemically dependent women and their families, and Mercy College of Health Sciences.

Mercy took a different track in funding Mercy Medical Center – West Lakes, drawing on its reserves rather than establishing a capital campaign, Ravenscroft said.

“So during the time that West Lakes was being planned, the foundation turned its efforts to scholarships at Mercy College, helping the House of Mercy and Bishop Drumm (Center), and targeted clinical programs at the medical center,” he said.

Mercy Foundation, on average, provides about 1 percent of Mercy – Des Moines’ funding. Year-to-date, the foundation has raised about $5.5 million, and is now in the midst of reorganizing its fund-raising structure to improve what Ravenscroft termed “slow but steady growth” over the past several years.

The foundation is currently in the early phases of planning for a yet-to-be-announced capital campaign for expansion projects beyond Mercy – West Lakes, he said.

Though philanthropic dollars support a relatively small portion of the budget, they have a significant impact, Ravenscroft said.

“If Mercy would want to move its bottom line by $5 million, it would have to raise its revenue by quite a lot,” he noted. “So philanthropy has a pretty good return on investment right now.”

One of the most significant continuing needs for Mercy has been support of Mercy College of Health Sciences, particularly in helping fund scholarships for nursing students.

“About 92 percent of our kids need some type of financial assistance,” Ravenscroft said. “We’re facing a nursing shortage in our state. I don’t think there’s a more compelling time to support nursing scholarships when we need nurses.”

Long history

Iowa Health Foundation had received a $15 million naming commitment from the family of the late Michael R. Myers for the new West Des Moines hospital. Earlier this year, however, the foundation released the Myers family from that commitment following the financial collapse of Regency Homes, which Michael Myers founded. Now six months into the leadership phase of the West Hospital campaign, the foundation is seeking a new naming donor.

“This is a historic opportunity for someone, because it’s very rare for a new community hospital to be built in Central Iowa,” Linderbaum said.

The foundation has received commitments for about $2.5 million so far. “We feel good about that, considering how the past couple of months have been,” Linderbaum said. He said the campaign’s leadership phase, in which it’s seeking donations of $50,000 and above, will probably continue for the next 12 to 18 months.

Linderbaum said Iowa Health has a long history of philanthropic support, dating back to the 1940s with the construction of Blank Children’s Hospital. The John Stoddard Cancer Center, Younker Rehabilitation Center and the Powell Building are other prime examples of major facilities that were built through significant philanthropic support.

“So when we started talking about this (West Des Moines) hospital back in 2001, it seemed natural to take a look to see if the community would support a hospital with philanthropy,” he said.

In addition to its current fund-raising campaign for West Hospital, the Iowa Health Foundation typically raises between $5 million and $10 million per year, Linderbaum said.

“We also seek annual gifts and major gifts, $10,000 and above, to help us just from an operational standpoint – to help with the cancer center, to help with Blank Children’s Hospital, to help with Taylor House Hospice, because all of these operations need philanthropic support,” he said.

Last year, the foundation provided $6.5 million to Iowa Health organizations. This year, it budgeted for $7 million, but will probably reach $5 million, Linderbaum said.

Though they work for competing health systems, the two foundation presidents recognize they share common goals. In separate interviews, the two said they enjoy a collegial relationship. Getting the message across to the public about the needs the foundations fill is probably the toughest part of their jobs, Ravenscroft said.

“When the hospital foundations go to the community for capital needs, it’s not for extravagance; it’s because we’ve identified a community need and the only way to meet that need is with the help of the community,” he said. “People see our shiny new hospitals and they think we have a lot of money, but there’s a lot that goes into it.”