Health Center Funding: Some Approaches to Consider

Posted on: July 19th, 2013 by Norm

This week, I’m going to discuss some of the issues surrounding health center funding and offer up some ideas for alternative methods of raising funds.

A lot of health centers have gotten so accustomed to what is seen by other human service agencies as having a plush funding source and revenue stream that they have neglected other sources of potential income, much to their detriment. Are you as unto one with the foundations in your geographical area? Do you even know what foundations are operating in your graphical area? Have you failed to maintain contact with the very foundations and corporate contributors that supported the start-up of your health center many years ago?The community foundation development movement of the past 20 years has provided a source of cash that can support small to moderate projects that would not ordinarily be seen as appropriate for a federal funding effort or major national foundation.

With the advent of the ACA, a surge of Medicaid and other patients may put additional pressure on your staff and facilities which could be resolved by a judicious appeal to non-governmental sources of support. Need facility upgrade on the fly? Consider a PRI – a program-related investment – which is essentially a low or no-interest loan from a foundation’s principal.  This could be an excellent source of funding for those with a good financial track record but limited fundraising experience.

Remember, fundraising to build the capacity to provide quality care in a quality setting can promote patient utilization. And patient revenues are the “gift that keeps on giving.” That is of course, if patient satisfaction issues are successfully addressed.

Many larger health centers have loaded on a director of research and development, a person that nominally handles opportunities for external funding. While “fundraising” is not normally an appropriate use of federal funds, a health center’s own bucket of cash can be used for this purpose. The frustration of many health centers with regard to using operational funds to obtain the services of hired hands for grant writing purposes (including federal grants) has caused problems with internal staff. I’m often asked why there seems to be no limit on what you can spend for attorneys and auditors but nothing in the effort to get additional funding or revenues.

In some sections of the country, particularly deep rural areas, there are virtually no sources of local foundations. Likewise, corporate support and even United Way resources are largely lacking in these areas. The best bet for external funding sources in many cases are local and state grants if they become available.

If you cannot write your way into sources of external philanthropic funding, start looking for local, county, and state contracts. Somebody has to provide healthcare at the local jail or county prison or provide services for the local health department. Health centers might be surprised to learn that they can bid for service contracts. They most certainly can if they know that these contracts are available. And if they work hard to create a competitive proposal, then they have a good shot at winning a contract. After all who writes more grants and other governmental proposals than the local community health center?


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