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SEBASTOPOL -- The Palm Drive Health Care Foundation will be folded into the Palm Drive Health Care District, which voted unanimously to adopt a report urging the integration of the two entities as a means of producing better fundraising.

The report, “A Leadership Survey on Fundraising for Palm Drive Hospital,” was prepared by two San Francisco health care consultants to help determine the best possible fundraising model for the 37-bed hospital in light of its funding needs. 

Executives at Palm Drive estimate that at least $20 million will be needed over the next few years for multiple upgrade projects, including the renovation and expansion of its emergency department and intensive care unit, replacing a CT scanner and updating mechanical, electrical and plumbing systems at the facility built in 1941 and last seriously renovated in 1991.

“Under the leadership of our CEO and staff, we’ve achieved real stability in the day-to-day operations of the hospital, so it’s a good time to take a look at our long-term capital needs,” said Nancy Dobbs, president of the Palm Drive Health Care District Board. “These are the kinds of improvements and renovations that will allow us to continue providing the highest quality of inpatient, outpatient and emergency care to our community in the years ahead.”

In its current form, the foundation is not equipped for that level of fundraising, according to the report.

"The foundation is not prepared for a capital campaign," the report said. "Most believe that greater collaboration is needed between the hospital and foundation. More significantly, there is an all-around lack of major-gift fundraising experience, personal giving capacity, contacts and influence in the philanthropic community."

Since 2001, the foundation has raised just shy of $1 million through 2011.

The foundation and the district should follow the lead of other successful hospital foundations by making the district the sole member of the foundation board, the report concluded.  The district board would have oversight of setting priorities, bylaws and having final approval of prospective members of the foundation board.

The report was based primarily on interviews conducted this summer with every board member of the district and the foundation, a separate nonprofit organization that raises funds for the hospital as well as other community groups. 

According to the report, interviews revealed that a majority of both district and foundation board members agree that the hospital needs significant philanthropic support, much more than is possible under the current organizational structure.

Upon implementing the report's recommendations, the foundation would raise funds exclusively for Palm Drive Hospital, and its name would change to the Palm Drive Hospital Foundation.   A full-time director of development would be hired to guide the foundation in its expanded fundraising efforts.

“A highly successful fundraising program, fully dedicated to the hospital, is essential to PDH’s future amid the financial uncertainties inherent in healthcare today,” the report said.

“Breakthroughs in technology and medicine have transformed health care, raising expectations for what a hospital should provide and driving up the cost of care,” the report said. “Meanwhile, insurers are reducing what they pay hospitals, and government grants have almost entirely disappeared. “

“The result [for many hospitals] is a serious under-funding of operations and capital investments, intensified by the dramatic shift in the economy since 2008. Dozens of California hospitals have been forced to close, to significantly reduce services, or to merge with huge hospital chains, and thereby lose their local mission and control,” the report continued.

Palm Drive is no stranger to lack of funding, narrowly avoiding closure by declaring Chapter 9 bankruptcy in 2007 after hemorrhaging nearly $7 million in operating losses. It emerged from Chapter 9 in May 2010 after selling off $11 million in bonds.

Last Monday, the district board appointed an ad hoc implementation committee to further analyze the report and make recommendations for next steps.  The report was prepared by Gail Terry Grimes and Vera Berg, both of San Francisco.