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Health-related data: it increases fundraising response. (Privacy).

Using specific health information about donors in fundraising appeals is a proven method of increasing response, income and donor loyalty. But collecting and using that information requires an understanding of new consumer privacy laws and their impact on nonprofit organizations.

It also involves consideration of the sensitive nature of the health data and obligates organizations to employ high ethical standards in using that information to improve fundraising results.

As the general privacy debate continues, it is expected that additional laws will be passed that will touch the broader nonprofit community. Until that time, it is clear that certain data-health data among them-are considered "protected" and the collection and use of these data will be restricted. Getting ahead of the privacy curve, then, is a proactive step in protecting future income and maintaining a viable donor database.

Hospitals and HIPAA

The Health Insurance Portability & Accountability Act (HIPAA) forever changed the way nonprofit hospitals, clinics and healthcare facilities raise funds. This act, which became law in December, 2000 and to which covered entities must comply byApril 14, 2003, restricts access to and use of health-related information for fundraising.

Traditionally, these entities have used disease and treatment information to select patients for fundraising appeals as well as to craft targeted, relevant fundraising messages. Proposed revisions to the act, while eliminating the need to obtain consent from patients prior to soliciting them, do not change the prohibition of using data related to disease, illness or treatment for non-treatment purposes without patient authorization to do so.

This means that nonprofit hospitals or their foundations cannot use even area or department of service information (e.g., oncology cardiology) which has proven successful in raising funds in the past unless patient permission has first been obtained. While the Association for Healthcare Philanthropy (AHP) is working with the U.S. Department of Health and Human Services to change the ruling regarding area or department of service, until a decision is made, this information remains on the prohibited list. That decision was pending as this column when to press.

Mailing fundraising appeals to an entire patient audience and with generic messaging or with targeted messaging that may or may not be relevant to the recipient is costly. And, response will diminish, threatening the capacity of these institutions to provide the community services and equipment and facility upgrades funds support.

What can hospitals do? One strategy is to contact former patients and ask them for the information. Data obtained would then be self-reported and usable. Information on how the data may be used should be included in such an effort and should be communicated in terms that promise a consumer benefit.

To contain costs, the request could be part of a regularly scheduled solicitation. This timing may depress response of the mailing, but because the value of obtaining the information can be quantified from previous response data, the longer-term payoff should far outweigh the investment. For example:

* On the reply device of a fundraising appeal, a hospital or foundation could ask former patients: "To help us better communicate with you, please tell us why you were hospitalized or visited us. This information will be used only to provide information that may be of interest to you, -----."

* Or, use the back of the reply device or a separate insert to provide guidance on the type of information requested, listing the departments or areas of service as check-off boxes. This would simplify the data entry process, and help standardize the data categories.

* And, test a premium such as health tips or a wellness guide related to the area of service the patient indicates s/he is interested in to encourage response.

In all cases, deliver on the promise by including area of service information and updates in follow-on communications and solicitations. To grateful patients that tell you they were serviced by the oncology department, provide information about cancer. If a patient volunteers information on the specific illness or condition (e.g., breast cancer), include information about what the institution is doing to help survivors or to enhance services.

Make sure you keep a record of how the notification was made and how and when the prospect provided the information.

This strategy may initially require making an investment and sacrificing short-term income, but the resulting database will be rich with usable data that will increase response to fundraising appeals.

Health charities take heed

Although HIPAA does not cover health-related charities, the act's tentacles could reach into the broader sector, and through its extension, impose similar restrictions on them.

More importantly, as consumers are educated about their privacy rights, legal or regulatory restrictions may be moot. Consumers' expectations may evolve into an ethical standard that prohibits the collection and use of health-related data without consumer permission.

Voluntary health agencies whose missions involve disease research or quality of life objectives fail into this category. Two in particular have been aggressively collecting and using disease-specific information in fundraising appeals and getting impressive results.

The Arthritis Foundation (AF) in Atlanta began collecting disease-specific information in 1992, testing its impact to direct mail fundraising as it built data volume. The early testing proved worthwhile. By incorporating messaging in appeals about the specific kind of arthritis donors had, the performance of solicitations improved, as did the value of donor relationships.

According to Angie Moore, group vice president, customer relationship marketing for the foundation, the frequency of giving across the donor file increased 22 percent in 2000 and the overall average worth of donors increased 58 percent.

Newer to the practice is the American Diabetes Association (ADA), in Alexandria, Va., which began collecting and using type of diabetes a few years ago. Even though it's early in the process for ADA, the results are strong. Joanne DelGiorno, national director, direct response marketing, reported that frequency of giving from donors with a disease code increased 22 percent in the association's 2001 fiscal year, and cumulative donor worth increased almost 12 percent.

Both organizations invested in collecting data directly from donors. This self-reported information was then added to the donor record and used to segment the files, matching messages to specific disease-based groupings of donors.

Data collection the Right way

Successful data collection integrates four critical components:

1. Asking for information;

2. Notifying donors of the intended use of the information sought;

3. Providing a consumer benefit (e.g., relevant information), and;

4. Assuring donors that their information is confidential.

The AF asks donors "If you're concerned about a particular type of arthritis, please tell us so we can inform you about research advances and new medications." There also is space to indicate whether the donor has this type of arthritis, or someone the person knows has it, and the relation of that person to the donor.

Most messaging also attempts to overcome any consumer hesitation to responding that may be related to privacy issues by affirming, "Of course, any information you share with us is confidential."

The ADA uses a survey appeal to collect disease information from its donors. The messaging invites donors to complete the survey "so we can serve you better." Data requested is in a questionnaire format and includes whether the donor has diabetes and if so, whether it's type 1 or type 2. It also asks if a family member has diabetes.

Messaging with health data

Messaging for both the AF and ADA follows a twofold strategy:

1. Mentioning in the copy that the donor has shared specific disease or disease state information with the organization, and;

2. Mentioning the specific disease or disease state.

Including information about the specific disease, such as research updates, sometimes is incorporated into the appeals as well, which fulfills the promise of "better serving" the donor. Statements as simple as "...because you've told us that you have type 1 diabetes" or "because you've told us you have osteoarthritis" remind donors that they have shared information and overcome possible fears related to where specific health-related data was obtained.

This is important because people often forget what information they share with whom. It also provides proof for regulators, if needed, that such information was self-reported.

Six ethical steps

Although nonprofit hospitals and their foundations must comply with HIPAA regulations, and because health charities may, by extension or consumer expectation, find themselves bowing to a new ethical standard, there are ways to collect and use health-related data within current and emerging requirements and guidelines. Here are six ways to survive and thrive:

1. Invest now in collecting self-re ported health data that is relevant to your cause and could improve response. ADD requests to existing appeals or consider separate surveys or questionnaires to obtain the data;

2. Code donor records appropriately and ensure security procedures are in place to safeguard the information;

3. Make sure that requests for health-related data are constructed to not only ask but also to notify donors about the intended use of the data, provide a benefit (e.g., disease-specific information), and assure confidentiality;

5. When using health-related data in appeals, remind donors that they supplied the data referenced to overcome possible donor fears about where the data was obtained.

6. Whenever possible, but at least periodically, fulfill the "better service" promise by providing specific information related to the donor's specific self-reported disease or health situation.

Following these steps will allow health-related organizations and institutions to build a permission-based donor file and ethically cultivate donors according to their health interests. This- not only increases response and income but also fulfills mission by providing meaningful and relevant information to those who have, by choice, disclosed specific health information.

Lindy Litrides is founder and principal of Litrides & Associates, a firm specializing in relationship marketing and privacy issues for the nonprofit community. Comments are welcome at lindylit@msn.com.
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Article Details
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Title Annotation:fundraising techniques and laws for nonprofit hospitals
Author:Litrides, Lindy
Publication:The Non-profit Times
Geographic Code:1USA
Date:Sep 15, 2002
Words:1626
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