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Some Hospitals Rely on Foundations, Donors to Get Projects Done

Reimbursements from insurance companies and government agencies aren’t the only sources of funds for Orange County hospitals. In some cases, particularly among not-for-profit or nonprofit facilities, they also depend on support from foundations or the work of development departments.

At Hoag Memorial Hospital Presbyterian in Newport Beach, Hoag Hospital Foundation is in the midst of a campaign to bring a new women’s healthcare facility to the hospital campus. So far, the foundation has raised $37.3 million toward a $50 million goal for a planned 309,000-square-foot, eight-story women’s pavilion on its upper campus, said Jim Dale, the foundation’s acting administrator.

Hoag’s Women’s Pavilion is expected to cost $100 million, with reserves and bond funds making up the difference of the cost. The pavilion is expected to start taking patients at the end of 2004.

Ginny Ueberroth, Arden Flamson and Sandy Sewell, all Hoag Hospital Foundation directors, head the women’s pavilion fund-raising campaign. The campaign’s methods include tapping prior Hoag benefactors, along with working to create new support.

“We’re receiving support all over our service area,” Dale said. Besides Newport Beach, Hoag’s service area also includes the more conventionally upper-middle-class cities of Costa Mesa and Huntington Beach.

Hoag Hospital Foundation members have held luncheons and other functions for potential donors earlier this year, Ueberroth said. Those activities have included talks by Dr. Stephanie Nichols McClellan, an obstetrics and gynecology specialist who is the pavilion’s medical adviser.

Also, Michael Stephens, Hoag’s president and chief executive, is contacting other chief executives to talk about Hoag and its women’s pavilion campaign, Dale said, mentioning that Disneyland Resort President Cynthia Harriss has expressed interest in the project.

On Hoag Hospital Foundation’s role, Dale said he sees it as “as going to our community to raise funds and awareness.” Although Hoag is in Newport Beach, one of OC’s most affluent cities, that doesn’t mean that it’s particularly easier for it to raise money, Dale said.

“You still have to be able to communicate a compelling vision and need. (There are) competing opportunities to donate,” Dale said, mentioning performing arts and education as two other sectors that mount aggressive fund-raising efforts.

Hoag Hospital Foundation received just less than $11 million in contributions for the fiscal year ended Sept. 30, said Debra Legan, a hospital spokeswoman, down from $16.5 million in the prior fiscal year. But Legan cautioned that foundations never know what they will receive in terms of pledges and donations that are derived from estate planning.

“Every foundation is unique to the hospital it serves,” said Jeffrey Wilcox, executive director of CHOC Foundation for Children. “For us, we take a community development approach as a direct strategy for resources.”

Earlier this summer, CHOC Foundation for Children issued an annual report pointing out that CHOC’s main hospital in Orange and CHOC at Mission, Mission Viejo, provided more than $34.7 million in community benefits during fiscal 2000.

The foundation reported that 86.4% of those funds went to medical services for impoverished or medically underserved children. The non-profit hospital system also returned $18.08 in community benefits for every dollar of tax exemption received, the foundation said.

Community development examples cited by Wilcox included CHOC’s opening of a pediatric clinic at the Boys and Girls Club of Santa Ana and its “mobile safety house” that travels to educate children and parents.

Wilcox said the foundation helps with a network of guilds and support groups for CHOC that total around 1,800 members.

Hospital foundations, like many other endeavors that rely on donations, are keeping a wary eye on the sputtering economy. Many institutional or family foundation-related contributions are dependent upon yields from investment portfolios, which have fallen along with the stock market, Wilcox said.

“At this point, it appears that donors are exercising a great deal of caution,” he noted.

At Hoag, the hospital’s foundation hasn’t yet seen the effect of a slowing economy, according to Dale.

In some markets, hospital foundations have to raise funds in order to offset reimbursement cuts and help institutional operations. Hoag Hospital Foundation, CHOC Foundation for Children and UCI Medical Center’s development department, however, aren’t involved in those roles, officials said.

“It is not the role of the foundation to get involved in (CHOC) operations,” Wilcox said. “Our role is to be an advocate and generate a groundswell of support in the community.”

Hoag Hospital Foundation uses its funds for capital projects and educational opportunities for staffers, Legan said.

In her experience, said Beth Tjoflat, senior director of development at UCI Medical Center in Irvine, donors almost never earmark their contributions for operating costs. Instead, she said, “people are interested in advancing things, naming a building.”

Some foundations are looking at alternative ways to drum up support. For instance, CHOC and CHOC at Mission recently launched a giving page on the hospital’s Internet site. The page allows potential donors to provide financial support for the facilities via a credit card.

CHOC Foundation for Children hopes that it can increase donations by 67% over a three-year period using the Internet, Wilcox said.

Business giving, meanwhile, isn’t a big part of the fund-raising mix at Hoag, Dale said.

“Eighty percent of our contributions come from individuals,” he said.

Hoag’s corporate efforts, Legan said, are aimed more toward marketing than direct philanthropy. She cited the Toshiba Senior Classic golf tournament as an example. Proceeds from the tournament benefit Hoag.

Meanwhile, at UCI Medical Center, “we’re putting together a development structure for the medical center that’s tied to the new hospital,” Tjoflat said. UCI Medical Center, in order to meet state seismic standards, is planning to build a new hospital on its campus.

Dr. Ralph Cygan, UCI Medical Center’s chief executive, nabbed $235 million in state funds for the pending building, but said in January that the project still faced a shortfall of $50 million to $75 million, depending on what UCI Medical Center ultimately decides to build.

A dollar goal hasn’t yet been set for UCI Medical Center’s building campaign, Tjoflat said. “The hospital’s still finalizing its plans, so it’s still sort of vague.”

In the meantime, Tjoflat said she was going to work on identifying leadership for the hospital building campaign and involve the University of California, Irvine’s main campus, including the College of Medicine and Health Sciences. Before coming to the hospital, Tjoflat spent 3 1/2 years as a fund raiser for the UCI College of Medicine.

On the business question, UCI Medical Center’s development office will be looking to build relationships with its existing vendors when it comes to needs for the new hospital building, Tjoflat said.

Another issue that hospital foundations and development departments face is assuring accountability.

Accountability is “critical. The donors need to have confidence that you will honor the donor’s intention,” Tjoflat said. “The vast majority of donors give to restricted uses.”

“We want to be able to ensure the donors that their contributions will go to what they want,” said the Hoag Foundation’s Dale. “We have to be good stewards of their gift.” n

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