May 1, 2010; Source: The Gazette | This interview with the new CEO of the Memorial Health System Foundation is useful for its insights into an unusual kind of change in the hospital sector. We have written in the NPQ Newswire about nonprofit hospitals being acquired by for-profits. In this case, a public hospital in Colorado Springs is undergoing major changes in its health care practices while a citizen commission examines whether to reorganize the hospital as a nonprofit.

At the public hospital’s fundraising arm, a new CEO is also taking over, replacing someone who was forced to resign in 2009—a somewhat murky affair that caused some big donors to take their money elsewhere. So the situation facing the new head of the foundation is this: the hospital has a new CEO making changes, the community is considering changing the structure and status of the hospital, the previous top fundraiser was somewhat inexplicably canned, and major donors got ticked.

What does Cary Blanchette do with all of this? In the interview, Blanchette laid out a plan including educating the community about the funding of Memorial (he says that the city-owned facility receives zero in the way of “tax money”; talking to the donors who upped and left; not saying bad things about the previous foundation director who was publicly credited with making the foundation effective and successful (she may well have been fired over a personality dispute of some sort); and putting out some stretch fundraising targets (he said that after raising $1.8 million in a year when the director was terminated, the foundation should be raising $3-5 million annually within three years).

Lurking in the background is the potential sale or conversion of the public hospital to nonprofit status. Settling “the governance issue”, according to Blanchette, is a linchpin toward achieving the $3 million a year fundraising goal. And what happens to a fundraising foundation if the hospital itself becomes a nonprofit? The fundraising foundation becomes a grantmaking foundation. Given that public hospitals are usually much better in providing charity care than their nonprofit counterparts, we would have asked, unlike the Gazette, about what gets lost if the hospital becomes a nonprofit.—Rick Cohen