The functionality of major-donor fundraising for German hospitals an empirical analysis from the viewpoint of hospital executive personnel and (Ultra-) High Net Worth Individuals.

Abstract

Due to financial constraints, urgent investments or even cutting-edge medical research projects with high financial requirements cannot be realized. Solicitation of major donations as an additional funding source can contribute to this. Crucial here is the knowledge of the most potent donor target group - the high-networth individuals (HNWIs = financial assets of at least $1 million, UHNWIs = financial assets of at least $30 million) as major donors. However, there are hardly any comprehensive empirical data on wealthy individuals as donors to cuttingedge medical projects in Germany. This study, therefore, investigates for the first time to what extent the annual funding gap of the billing-based hospital financing system can be reduced with the help of UHNWIs and HNWIs. In addition, the focus is on how this target group can support specific medical funding projects in cutting-edge medicine and research to derive practical action recommendations.

These scientifically based findings, obtained for the first time through the study, are essential for successful systematic major gift fundraising for hospitals and clinics in the healthcare sector. The study follows a mixed-methods approach. First, by dividing the study into two separate sub-studies, each with different target groups (senior hospital staff and fundraisers) and high-net-worth individuals), the research question is examined from two different perspectives. Major gifts fundraising is the most significant growth area in the German fundraising market. The research makes it clear that UHNWIs and HNWIs in Germany are willing to get involved socially and that hospitals represent an attractive donation object for them in terms of a major gift not only during their lifetime but also after their demise.

High-net-worth individuals want donors to be approached in a way tailored to them, with direct contact with hospital executives with the appropriate authority and decision-making powers regarding fundraising. However, hospitals do not approach the high-net-worth consistently, effectively, and sustainably. That is because German hospitals are not appropriately structured and staffed to adequately meet the wishes and needs of the target group. Fundraising must be understood as a central management task and actively supported by the management to establish major-donor fundraising in German hospitals successfully. However, hospitals see the difficulty in particular because financial bottlenecks make it almost impossible to focus on the target group and major-donor fundraising since corresponding investments must be made here in advance. In addition, hospital managers fear that high-net-worth individuals, through corresponding donations, want to buy a say in hospital management. This fear, as the study shows, is entirely unfounded. For the future, a significant reorientation comes on hospitals because, without first investments, large donation fundraising cannot be established as an additional source of financing. On the other hand, the study shows that major gift fundraising by (U)HNWIs has gigantic potential to become the most important alternative funding source in German hospitals.