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Development and Finance — An Odd Couple?

The development and finance departments in a nonprofit are focused on the money that supports the charity’s mission, the chief development officer (CDO) and the chief financial officer (CFO) lead teams with very different functions.

They can work against one another, but when they collaborate, both can create stability for their organization.

Robert Wahlers, CFRE, vice president of development, and Joe Stampe, president of the Meridian Health Affiliated Foundations, told how they are developing a strong relationship with Joe Lemaire, executive vice president for finance with Meridian Health, an eight-hospital health system in New Jersey where they raise about $23 million a year ($31 million when you include public grants).

They made the comments Monday during their session “Development and Finance: Working Together.”

The Meridian Health Affiliated Foundations support each hospital and helped Meridian to enjoy its best year ever in 2014 with a 7.8 percent margin only to then top it in 2015 at 9.9 percent.

Success has not been without challenges. Besides the new rules presented by the Affordable Care Act, Meridian Health had to weather Super Storm Sandy when the Jersey Shore was devastated in October 2012. Working together, the system’s equity base has increased 61 percent to allow for a capital formation plan that has $1.1 billion earmarked for investments in several key areas.

The foundations are supporting the plan with its first-ever, system-wide comprehensive capital plan. The Giving Heals Campaign has funding priorities at each campus. Stampe shared the benefits of giving and added “studies show that generous behavior is closely associated with reduced risk of illness and mortality, and lower rates of depression.”

Wahlers spoke about the changing generational cohorts from his research with co-author Brian Sagrestano in their book “The Philanthropic Planning Companion” (Wiley, 2012) where they defined two main groups: the Traditionalists (born pre-1946) and the New Philanthropists (born 1946-present). “Traditionalists trust charities and make unrestricted gifts, but New Philanthropists do not and will not make gifts to charity unless they can see impact and long-term outcomes. They want verifiability and accountability,” Wahlers said.

For Lemaire, “cash is king and unrestricted cash is better,” but when today’s donors want to restrict their gift, this is one of the challenges of working together. Accounting versus counting was discussed with examples of how we need to make donors feel appreciated and recognized while also maintaining fiscal responsibility. It is important to understand how a gift is restricted.

“Clarity is key,” said Lemaire. Stampe added, “a solid gift acceptance policy can be a useful tool to help manage some of the opportunities that arise.”

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