Kansas City, Missouri

Strength Amidst Change: One Hospital’s Education in Shaping Their Own Destiny

At a time when anxiety was high over mergers, buyouts and acquisitions, and what effect they would have on the identity of our hospitals, a Kansas City hospital prepared themselves to take the dominant position in determining their future. Thanks to the successful completion of the $59 million Strength Amidst Change campaign, Saint Luke’s Hospital of Kansas City, MO, is now able to influence the shape of their own destiny.

The goal of the three-year campaign was to raise funds to strengthen and sustain medical education and research at Saint Luke’s Hospital, enhancing its stature as a private teaching hospital.

“We were in a unique position in that we saw an opportunity to help determine our own destiny, rather than waiting for the national anxiety over healthcare to determine it,” says Harold Schultz, Executive Director at Saint Luke’s Hospital Foundation.

The 35-year-old Foundation is the Hospital’s philanthropic arm and raises money for medical education and research at Saint Luke’s, the largest private teaching college in the Kansas City area. As director of the Strength Amidst Change campaign, Schultz’ prime role was major gift solicitation. With 20 years expertise in service as a college president, Schultz possessed a great deal of savvy regarding fund raising and led the process with consummate skill.

Setting A Goal

Saint Luke’s selected Kinetic to do an Integrated Campaign Assessment™™™ in the Fall of ’93. The study was completed during the “crisis in healthcare” when a great deal of anxiety existed among physicians, hospital employees, and the general citizenry. Our analysis revealed significant and deep support of the Hospital from among its supporters. We tested a $37 million campaign, a number that was influenced by a previous $10 million campaign that barely made goal and received average gifts in the $15,000 to $20,000 range. We recommended a $50 million campaign based on our belief that various departments of the Hospital could make a strong case to the community for their support.

“When some first heard of our goal of $50 million, the Board considered it a stretch. But with the results we’d seen in the Kinetic study, we had good reason to believe it was an attainable goal,” says Schultz. “We knew the marketplace was shifting, but I think we all enjoy a challenge. When I first saw the numbers I was reminded of Robert Browning’s poem which reflects ‘ah but one’s reach should exceed one’s grasp’.”

There were weeks of review and thought by staff and Board members. We proposed a planning period of six months in which we could organize the campaign, develop a private campaign and commence solicitation of major gifts. The Foundation used the six months wisely to educate the medical staff, Foundation and Hospital Boards, and put everyone in a “campaign mindset”. Board solicitation was purposefully delayed in order to give them confidence in the campaign.

The campaign was quietly initiated in late 1994. Early in the campaign the Wall Street Journal published an article indicating that Columbia Health Care System was interested in acquiring Saint Luke’s Hospital. While the Hospital denied interest in such a purchase, rumors were rampant about the possible elimination of Saint Luke’s as a nonprofit hospital. Our firm recommended a private campaign that would not necessarily ever go public, to alleviate the fears of how this campaign would be perceived by the community. Ultimately, late in the campaign, a virtual merger occurred with another smaller local hospital. The campaign went public in May, 1997, in the final six months of the campaign.

First Donors Set The Standard

To the surprise of many bystanders, the first gifts were close to home. The initial donor, a doctor, made a gift of $1.2 million. Another co-chair made a gift of $1 million and another, a gift of $500,000. The Boards of Directors of the Hospital and Foundation eventually gave $10 million, with an average gift of more than $100,000 — six times more than in previous campaigns.

A Decentralized Campaign Approach

We recommended a unique arrangement in developing liaisons between the Foundation and the various departments of the Hospital, implementing a committee structure that allowed significant involvement by the Board and volunteers. Largely due to this arrangement, 180 Saint Luke’s physicians gave $7 million, with an average gift of nearly $100,000.

“One of the most important things I learned in this campaign is that, in healthcare specifically, people give more to the parts than the whole,” says Schultz. “Ours was a very de-centralized campaign. In addition to the ordinary major gift apparatus, we had 14 mini-campaigns being conducted, each with its own case statement, list of goals and projects,” explains Schultz. “Each project was chaired by a doctor and lay person within that area. Thus, they were able to focus on their own patients and medical staff. When a doctor made a gift, he was giving to his own department. Each individual effort combined to make a system of giving whereby the greatest needs could be met individually within each department.”

Challenge Gifts

A unique opportunity came when we learned, after beginning the campaign, that the State of Missouri allowed a match on gifts that were made for endowed chairs to affiliated institutions. For each endowed chair, the state would match the amount, dollar for dollar. Saint Luke’s was successful in endowing six chairs and one professorship in cooperation with the University of Missouri Kansas City School of Medicine. Each chair provides funding to attract a distinguished medical scholar in the fields of neuroscience, internal medicine, cardiovascular research, anesthesiology research, emergency medicine, and metabolism and vascular disease research. This was especially helpful because the campaign did not receive support from the traditional Kansas City foundations. Further, it was at a time when many corporations were deciding not to give to healthcare.

Against odds many refused to bet on, the campaign competed with some of the largest campaigns in the history of Kansas City including Science City at Union Station at $250 million; the Nelson Atkins Museum of Art at $150 million; and the Kansas City Royals underwriting campaign of $60 million.

100 Gifts Over $100,000

“We had no ‘ultimate’ or ‘mega gift’ compared to the single $25 million gift made to Children’s Mercy Hospital, a very successful local children’s hospital. Yet, you have to consider, we had never had a single million- dollar gift in any previous campaign,” says Schultz. “At the close of the Strength Amidst Change campaign we ended up with 17 million-dollar gifts.” The largest individual gift was $2.9 million.

With our firm’s assistance, the Foundation developed creative gift packaging for both outright and deferred gifts, as well as life income arrangements. The campaign received 100 gifts of $100,000 or more, and 17 gifts of $1 million or more. Additionally, they were able to build the Heritage Society, the Foundation’s deferred gift club, to almost double its level prior to the campaign.

Staff Changes & Volunteer Leadership

A major obstacle the Foundation faced during the campaign was turnover of personnel including: changes in the presidency of the Hospital, three members of the nine-person Foundation staff went on extended maternity leave, and three staff members left the Foundation. In spite of these obstacles, momentum for the campaign kept a running pace and the cost of the campaign was negligible.

Outstanding leadership was key in propelling the campaign forward. Campaign leadership set the stage leading not only with their words, but with their individual gifts. The campaign was chaired by J. Thomas Burcham and co-chaired by Albert C. Bean, Jr. and Gerald F. Tuohy, MD. Mrs. Aileen Calloway, Board Trustee and Committee Chair, also provided active leadership during the campaign.

“The success of this campaign really demonstrates the depth of community support for Saint Luke’s Hospital and its employees,” says Burcham.

A Project Well Done

At project completion, December 31, 1997, the Strength Amidst Change campaign had raised $59 million, surpassing its goal by $9 million. The final breakdown of gifts included $38.5 million outright and $20.5 million in deferred giving, (discounting the deferred gifts’ present value) making it the largest Hospital endowment campaign in Kansas City.

More than 2,000 members of the Kansas City community contributed to the campaign, which resulted in 50 major projects and programs, as well as numerous other initiatives. Perhaps the most astounding feature of the campaign is that it produced a face value of $64 million with no national foundation support. Assets are now approaching $100 million, making it one of the largest private teaching hospital endowments in the country.

Recognition was an important part of the campaign, with all items of recognition being personally delivered. The campaign committee worked hard to keep staff members, board members and a roster of over 2,000 donors informed throughout the campaign. In addition, special recognition banquets were held for all donors.

While “going over goal” is a significant accomplishment for any hospital in today’s fund-raising climate, Schultz is quick to point out that it’s not the money, but the means to make good things happen that is most significant about the Strength Amidst Change campaign. “We have 50 direct medical benefits and a long-lasting research benefit. This campaign has made philanthropy a much more active ally and displayed a reservoir of good will towards the Hospital,” says Schultz. “We are no longer at the whims of what a national ‘crisis in healthcare’ may dictate. That’s the true legacy of the campaign.”

SIDEBAR:

Saint Luke’s campaign highlights many important gift closing lessons.

1. A single gift from the right person can set the standard for others. The physician’s gift of $1.2 million was an important signal to other physicians of the expected size of gifts.

2. Creativity in allowing donors to set their pace and timing to satisfy pledge commitments (within reason) allowed donors to go to higher levels.

3. Recognize the role of outside influence, but be true to who you are as an institution. Donors respect that.