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VOL. 128 | NO. 16 | Thursday, January 24, 2013

Stretched Care

Nonprofit health care organizations face funding challenges

By MICHAEL WADDELL

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The Herb Kosten Foundation and the International Children’s Heart Foundation (ICHF) are two of many local health care-related nonprofit organizations that face ongoing funding challenges.

Financial needs for Dr. William Novick and the International Children’s Heart Foundation are increasing as the number of lifesaving cardiac surgeries the organization conducts has doubled.

(Photo Courtesy of International Children’s Heart Foundation)

A November report from the Alliance for Nonprofit Excellence concluded that, in general, local nonprofits are facing increased costs for running operations, and some cannot fully meet the demand for their services because of funding constraints.

“There’s a lot of competition in the charitable marketplace for donors’ contributions,” said Terry Carter, ICHF executive director. “ICHF has to continually update and adapt its fundraising strategies to changing trends, and this means many things, including expanding our presence on the Web and social media sites. We are committed to demonstrating tangible results among donors through stewardship so they can more readily see the impact of their donations on the children’s lives.”

ICHF revenues are used directly to fund trips to impoverished countries to perform lifesaving cardiac surgeries on infants and children. This year the organization will make 30 trips to countries on five continents and will perform nearly 900 surgeries, a number that has doubled in the past two years. Each trip costs between $35,000 and $60,000.

The Alliance for Nonprofit Excellence report indicates that 64 percent of local nonprofit organizations experienced revenue increases between fiscal year 2011 and fiscal year 2012, and 63 percent reported that their cost of doing business also increased.

For the ICHF, $5.6 million in revenue last year paved the way for more than $5 million in program services to children around the globe. ICHF revenues, which come from private donations and government grant/contracts, dipped slightly in FY 2012 due to a decrease in available medical supplies donated, while the cost of doing business rose.

“Expenses for doing business always increase from one year to the next, despite our commitment to control such costs,” said Carter, who is optimistic about the organization’s financial outlook for this year. “Reflecting on the global marketplace, one has to be cautious as trends can change very rapidly. We have a very deserving and worthwhile mission saving children’s lives who have congenital heart disease, and we remain hopeful that the donor public will continue to support us so these children have a better chance for normal lives.”

A big topic recently has been a possible federal cap on tax deductions and what could it mean for nonprofit organizations.

“Obviously, if charitable tax deductions were seriously restricted or reduced, then it could have a negative ripple effect on the entire charity world,” Carter said.

Upcoming ICHF fundraisers include the annual Taste of Caribe June 10 and the “20 Years of Medical Missions Celebration” event at the Cadre Aug. 23.

The Herb Kosten Foundation formed in 2003 by Alan Kosten to raise awareness and fund research for pancreatic cancer, a particularly deadly form of cancer (with a five-year survival rate of only 6 percent) that took his brother, Herb, in 2002.

The Kosten Foundation receives all of its funding from private donations and fundraising events.

The foundation’s main event had been an annual tennis tournament at The Racquet Club from 2004 to 2007, but when the economy began to sour in 2008 corporate sponsorships for the tournament dwindled.

Following three years with no major fundraiser, the foundation held its first Kick It 5K race in 2011, and participation has grown rapidly since. Approximately 280 people signed up in 2011 and more than 1,100 runners and walkers entered the race last year, in part due to widespread area awareness of 15-year-old Trey Erwin, who was battling pancreatic cancer at the time and passed away last July. The 2013 Kick It 5K will be held March 24 at Shelby Farms Park.

“To date we are not directly raising as much money as we did from the tennis tournaments, but indirectly I think we are doing better now raising awareness in the community,” Kosten said. “The economy is also doing better this year, and we are getting more corporate sponsorships for this year’s race. Some larger companies have already signed up. Our No. 1 goal is to cure pancreatic cancer, and in order to do that we have to fund research programs.”

The foundation announced and funded a grant in 2011 to the University of Tennessee Health Science Center doctors led by Dr. Ram I. Mahato, and the grant was renewed for 2012-2013. The next phase of the research will be costly clinical trials in the next 12 to 18 months.

“The need for money is going to multiply greatly in the coming years,” Kosten said.

The foundation also provides one of the only support groups in the area for people dealing with pancreatic cancer.

“We also conduct a free monthly support group at the Cordova library on the second Saturday of every month,” said Yvonne Ressel, the foundation’s executive director and also a pancreatic cancer survivor, who wants to see as much awareness and funding for pancreatic cancer research as there is currently for breast cancer and other illnesses. “There’s obviously a lot of need out there.”

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