A few months ago, an Inside Philanthropy article praised a $15 million gift to improve healthcare services in the needy community served by the Martin Luther King, Jr. Community Hospital in south Los Angeles.
“I only wish we could report gifts like this in Inside Philanthropy more often,” editor David Callahan wrote.
Few big hospital gifts go directly to underserved, economically struggling regions, he noted. Recipients of such multimillion-dollar donations are more likely to be prestigious medical centers engaged in research or located in wealthy neighborhoods like New York’s Upper East Side.
But the $15 million donation, a joint gift by Steve and Connie Ballmer of the Ballmer Group and the Weingart Foundation, is unusual for other reasons, making it worth a closer look.
First, the money “is not an endowed gift that will generate interest,” says Dyan Sublett, president of the hospital’s fundraising arm. “This is more of a venture capital business plan.”
The $15 million, she explains, will guarantee salaries and attract nearly 40 new physicians to work in the new MLK Community Medical Group. The nonprofit physicians’ group will attract doctors from prestigious institutions who want to work in economically challenged south Los Angeles but need financial security to do so.
Second, the Weingart Foundation, a previous hospital donor committed to fostering equity in poor communities, recruited the Ballmers, who’ve recently emerged as major donors giving to lift people out of poverty. The couple’s grantmaking institution, the Ballmer Group, has become an important funder in Los Angeles and nationally in the past few years. Together, the donors visited the hospital and invited its leaders to tell them how a transformative gift could meet the hospital’s greatest need. The most urgent need, the donors learned, is addressing a gaping doctor shortage.
“An average U.S. community has 10 times the number of doctors we have,” Sublett says. “If someone doesn’t have access to an urgent care facility and cannot say ‘my doctor’ because they do not have one, the community is very, very sick.”
The donors, she recalls, asked if the hospital had a business plan to attract more physicians. It did. Over the next few months, the hospital and the two donors worked to develop a viable business model that would generate revenue to guarantee compensation for new doctors at the hospital.
After forming a tentative business plan, Sublett says, “We found the very best hospital financial consultant to tell us where we had weak spots. It was very, very rigorous.” The revised plan was then given to the donors, she says, “and they hired their own evaluators.”
The final plan calls for the five-year, $15 million gift to be supplemented by $5 million in additional contributions from other donors. (Another $2 million in new donations has been secured so far.) In addition to philanthropic support, the hospital will pay a percentage of the money saved by adding more doctors to the new physicians group, thus reducing costly emergency room visits.
Sublett says the gift is “a true example of partnership. The donors came together and worked with us on a common goal to get healthcare done in this community.”
What fundraising lessons can we take away from this example? The donors had tremendous faith in the hospital’s plans and in its data, Sublett says. That led them to take the lead in initiating a record-breaking new gift.
“We were not chasing the money,” she says. “It was the donors’ trust and confidence in us that led them to ask, ‘What is your greatest need?’”
Once a dialogue was underway, the leadership of the Martin Luther King, Jr. Community Hospital was ready to do considerable work to build a strong case for a major gift. It was willing to engage over time with hands-on donors who weren’t interested in just writing a check—but rather wanted to help the institution chart a sustainable growth path.