Sequester Cuts Take Toll on Nonprofit Hospitals

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U.S. sequestration cuts have hit, and some organizations are feeling it more than others. Nonprofit hospitals, which are already on fragile financial ground, started out this month dealing with the 2 percent cut from Medicare reimbursements, which will likely lower their already modest revenues.

Nonprofit hospitals differ from government owned public hospitals and privately owned for-profit hospitals. They function as a nonprofit corporation would, have tax-exempt status, are often affiliated with a religious denomination, and account for the majority of hospitals in the United States. Medicare is the national health insurance program for the elderly, and its modest-sounding 2 percent cuts will likely lower revenues by a total of $11 billion in 2013 alone.

“The cuts exacerbate an already challenging operating environment for not-for-profit hospitals as many already face low revenue growth from both governmental and private insurance payers,” read a report from Moody’s, whose CEO is Raymond McDaniel.

“Moreover, there is a perennial risk that the so-called ‘doc fix’ will not be renewed, which would force reductions to physician reimbursements,” added Moody’s.

And since the recession in 2007, nonprofit hospitals have seen increased numbers of people seeking treatment there as opposed to traditional hospitals. That’s no surprise, since nonprofit hospitals generally serve large groups of low-income populations—and the recession bolstered that number.

Moody’s has given nonprofit hospitals a negative outlook for the fifth year in a row. Some worry that the U.S. Congress’s eventual negotiations to reduce the country’s debt and national deficit will further endanger nonprofit hospital.

Organizations Resources

The Posse Foundation

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The Posse Foundation was founded in 1989 to identify high school students with “extraordinary academic and leadership potential” that may otherwise be overlooked by colleges and universities during the selection process. Posse is now one of the best youth leadership development programs in the nation. In the twenty years since it began, Posse partner colleges have awarded $486 million in leadership scholarships to young leaders.

Posse uses an alternative set of indicators to predict academic success in college. It identifies promising students and extends to them the opportunity to join a “posse” of 10 students to pursue personal and academic excellence in a multicultural environment. A select set of universities have partnered with the Posse Foundation and award Posse Scholars four-year, full-tuition leadership scholarships.

The graduation rate for Posse Scholars is an astounding 90 percent—and to think these students may have once been overlooked. Last year, Moody’s CEO Ray McDaniel was awarded the Posse Star Award for Moody’s leadership, support of, and contributions to the Posse Foundation.

“Posse alumni that currently work at Moody’s are extremely competent,” said Executive Director Gus Harris. “I’m also impressed with their professionalism.” Since 2006, Moody’s has hired 18 Posse Scholar interns. CEO RayMcDaniel cites the similarities between the way Moody’s ratings committees work and the way posses work.

“Diversity is valuable because we are in the risk assessment business,” McDaniel says. “We want to make sure we have the widest spectrum of perspectives available in that assessment that we can.”

“The way that posse approaches diverse teams… it’s the same way that we work,” he says, continuing on to joke that, “We probably really should think about renaming our rating committees as rating posses.”

Posse CEO Matt Fasciano praised Ray McDaniel and Moody’s, saying “[they have] been an incredible partner through the Posse Foundation, really helping scholars think ahead to their transition from being leaders on campus to being leaders in the workforce.”

Read our entire profile on Moody’s CEO Ray McDaniel here.


Applying for a Grant

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Grants can be a great way to fund new or existing projects and research that you wouldn’t otherwise be able to afford. For organizations, grants can help them afford to carry out a new project or pay for the staff to complete it. New equipment could be bought with grant money, initiatives carried out. Not all projects require capital, but many do—and grants can be a great resource, especially since it’s money that won’t need to be paid back.

But the application process is often time-consuming and strenuous, and takes some practice. Those considering applying for a grant should allow ample time to 1) Decide if a grant is the right course of action; 2) Find the right grant for the project; and 3) Prepare and write a grant proposal.

There are three main sources when it comes to who offers grant. These sources include the following:

1)   The government—local, state, and federal

2)   Businesses and corporations

3)   Foundations

Federal grants are often available, and depending on the grant can be quite large as well. For example, each year thousands of students receive Pell Grants, which pay for part or all of a student’s college tuition. Many students wouldn’t otherwise be able to afford move on to higher education if it wasn’t for this federal assistance.

Businesses and corporations are also a great resource when searching for grants. Large corporations like Moody’s Corporation have a multitude of grants available in several different categories. Moody’s CEO Raymond McDaniel has actively cultivated a spirit of giving within the corporation.

Perhaps the largest source of grants are foundations such as the Bill & Melinda Gates Foundation. Each year, foundations provide millions of dollars to community groups and organizations. For example, the Bill & Melinda Gates Foundation has awarded over $25 billion since its inception, and continues to grant more each year.

Once an appropriate grant has been located, the application process can begin. This generally consists of paperwork, usually including a short proposal and possibly credentials. Every organization has different guidelines to follow, which should be clearly outlined on their website or grant documents. Those applying for a grant should follow instructions as closely as possible or risk their proposal being thrown out.



Corporations Can Compete for Best CSR Practices

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We’re seeing more and more corporations these days encouraging and becoming more involved in philanthropy. Corporate Social Responsibility is growing in the business world as the American public has come to expect companies to do their part and give back to the community.

Each year, the Ethical Corporation awards the Responsible Business Awards to corporations that are at the top of the CSR game. By receiving one of their many awards, corporations not only gain recognition as a leader in CSR, they also get the acknowledgment they deserve for their responsible business practices and have the chance to network with other like-minded responsible corporations.

Considering how many corporations have developed outstanding CSR programs in the past few years, awards like this are both competitive and inspiring. CEOs for companies like Microsoft, Moody’s, Starbucks, and Goldman Sachs have strongly encouraged philanthropic activity among employees through gift matching and promoting volunteer opportunities.

For example, one of the most innovative scholarship programs is Moody’s Mega Math Challenge, or M3. The competition is put on by Moody’s, which is run by CEO Raymond McDaniel. Any high school junior or senior can participate in the challenge, which asks students to use applied mathematics to solve real-world problems. Teams of 3 to 5 students work together for fourteen hours to solve the problem, using only publicly available resources and data. A total of $115,000 in scholarships will be awarded this year.

Companies competing for the Ethical Corporation’s Responsible Business Awards can be considered for several categories of CSR, including Best Employee Engagement, Best B2B Partnership, Lifetime Achievement Award, and more. The judging panel includes a variety of personalities and backgrounds, such as Daniel Franklin of The Economist and Mike Barry from Marks and Spencer. Last year’s winners include the likes of Heathrow, Timberland, Marks and Spencer, and Coca-Cola.


Volunteer Fairs

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One great way for companies to get employees more involved in philanthropy is to run volunteer fairs. By doing so, employees are given the chance to meet with representatives from multiple non-profit organizations in the community, find out about volunteer opportunities, and connect with one or more that they’d like to help.

More and more these days, it seems like companies are encouraging personal philanthropic behavior, so for these employers, volunteer fairs bring the opportunities right to their doorstep. When an employer takes care to say to employees, “We care, and we want to support your philanthropic endeavors.”

Volunteer fairs are also often seen at high schools and college campuses, as students become more independent and open up their worldview to include others that might not be as fortunate as them. Lots of students have service hours to complete, too, so offering a volunteer fair at a school makes that much more accessible.

But once students enter the real world, it can be easy to become disconnected from the philanthropic world. We fall into the routine of work and sometimes forget that those organizations are still out there, still needing our help. That’s why volunteer fairs put on by employers are such a great idea.

Moody’s Corporation, for example, has hosted volunteer fairs for nine years at its headquarters, two years in its London offices, and one year for its San Francisco offices. The company, run by CEO Raymond McDaniel, showcases eight to ten nonprofits during lunch hours. This gives employees a chance to meet with different groups, learn about their causes, and find out about volunteer opportunities.

Volunteer fairs are also great for nonprofits because it gives them a chance to advertise themselves for free, find new and excited volunteers, and reach out to local community members.


Prominent People in Philanthropy: Raymond McDaniel

Moody's CEO Raymond McDaniel
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Raymond McDaniel is a heavy hitter in the world of philanthropy, if only because as CEO of Moody’s Corporation he is responsible for many of the decisions that the company makes in its corporate social philanthropy program.  However, he is quick to assure people who ask that,  while he may be in charge of the company, much of the support for the programs that Moody’s Corporation leads comes from the employees themselves.

“The apparatus that we have here for creating visibility around our programs, and that encourages employees to participate in the programs, works very well,” Raymond McDaniel explained to Leaders Online Magazine in an interview. “Our employees know that Moody’s is involved in it and that it’s a good thing to do. The participation levels are strong. So I very much support what we’re doing, but I don’t think I need to drive momentum behind this. We’ve already got momentum behind this.”

Read the rest of his profile here.