Physicians Who Give, Receive

December 27, 2011

Tips, hints, and advice for participating in effective and rewarding philanthropy

Each year, surgeon John de Csepel spends the bulk of his vacation (about four weeks) as a volunteer trauma surgeon for Doctors Without Borders.

He also helps raise money for the organization, and donates to two other charities and his church, in addition to the occasional dollars he gives friends for their charity fundraisers.

The hands-on volunteer missions help keep his surgical skills sharp (he left a practice at midcareer and is now doing research), and he says the satisfaction it brings equals or exceeds the benefits of sitting on a beach.

"I don't mind spending all my vacation on this," says de Csepel. "What you hope to achieve on a vacation is a change in environment and pace and getting your mind off your regular job. Going on a mission satisfies those and a lot more."

After the sharpest drop in four decades occurred during the recession, U.S. charitable giving increased 3.8 percent in 2010, according to the Giving USA Foundation and the Center on Philanthropy at Indiana University.

Physician giving is more difficult to track, though the Association for Healthcare Philanthropy noted that physician donations to nonprofit hospitals and healthcare institutions were steady to rising during the downturn. Physicians have founded and continue to give to myriad charitable causes; some health related and others not.

Asked to help lead part of a recent United Way giving campaign for his colleagues at the Cleveland Clinic, immunologist and surgeon John Fung, chairman of the clinic's Digestive Disease Institute, says 71 percent of his potential donors gave to the effort.

"I was impressed by that. I think the campaign appealed to physicians' sense of this community," says Fung, who also has been involved with the American Liver Foundation and other organizations.

There are clearly challenges when it comes to physician giving, however, particularly as concerns abound about everything from the future of physician salaries to spiraling medical costs, to depleting retirement savings.

Fung and other physician donors say there is a palpable feeling that doctors simply can't or don't give at the levels they once did. Instead, they say, business owners, corporate executives, and investment bankers have taken over those roles.

"Physicians have a reputation as not being very good givers," says neonatologist Ed Karotkin, who serves as board chairman for Physicians for Peace and who volunteers and donates to several other causes. "I've been to fundraisers where people will come up to me and say, 'you're one of the few doctors who really support the community.'"

Mid- to late-career physicians "are not feeling they have the additional income for charitable causes," says Monika Bridgforth, senior development director for Physicians for Peace, a missions organization which sends teams of health professionals to the developing world for training missions. "They don't feel they are set for retirement," she says, with tuition payments for children's schooling often still on their plates.

Two reasons for hope, she says: Once retired, physicians often do circle back to organizations and get involved, with donations typically following service. And young physicians are keenly interested in mission work around the globe.

Some physicians strengthen patient relationships through joint volunteer projects, others (like de Csepel) find volunteering relieves stress, and others capitalize on tax benefits due to charitable giving.

The benefits

Trying to spur involvement among younger potential donors, including physicians, the Anne Arundel Health System in Annapolis, Md., recently started a grassroots group of donors under age 40 who call themselves the Building Traditions Society.

The fledgling 27-member group, which includes three doctors, collects $1,000 a year from each member. It then selects a cause within the health system to support, says Lisa Hillman, president of the Anne Arundel Medical Center Foundation and past chair of the Association for Healthcare Philanthropy.

Physician giving to hospitals also may be ticking up as more physicians join hospital-based practices, Hillman says.

"They may see that the success of their practice is tied to the success of the hospital" and its charitable efforts, she says, referring to non-profit hospitals who rely on donors.

Meanwhile, good old-fashioned tax deductions are still important, particularly to higher income physicians, notes Scott Hill, senior vice president for Kanaly Trust, a financial advisory firm.

"A lot of physicians have built large positions in workplace plans or IRAs for both the tax deferral and creditor protections," Hill says. Naming a charity as beneficiary to a portion of those funds is a great way to maximize the donation (charities get the entire donation without your income taxes deducted first).

Hill likes this giving strategy for its simplicity and the fact that with today's markets and economy, most clients don't want to tie up significant assets in inaccessible, complex trust accounts.

Karotkin, the neonatologist, did open a donor-advised fund, however, which is typically a low-cost alternative to private foundations. With the funds, a donor takes an immediate tax deduction on an irrevocable gift but can later direct where the money goes.

This is a popuar strategy. In a November 2010 survey of donors earning more than $200,000 annually, the Center on Philanthropy found that 17.5 percent of affluent donors gave through donor-advised funds.

What to watch out for

Ready to write a check? Keep these tips in mind:

• Keep it simple. Hill recommends establishing charitable remainder trusts, which can take a retirement asset and give a client lifetime income with the remainder of the trust going to charity at the owner's death. He also likes charitable needs trusts, which work in reverse and provide a charity annual income from the trust until the remainder reverts back to the estate at death.

But trusts can be highly complex, so be sure to consult with experts before getting involved.

If you're intrigued by a charitable gift annuity, a contract between a donor and a charity for lifetime income to the donor and the remainder to a donation, keep in mind the credit stability of the organization and costs compared to simply buying a commercial annuity.

• Look behind the curtain. IRS guidelines in place since 2008 make researching charities easier. You can find out a lot about an organization at www.charitynavigator.org.

The charity rating service recently rolled out new metrics, which rate charities not only on their financial health and how much of each donated dollar goes to the cause, but also on governance and accountability issues.

• Think strategically. Get the most bang for your donated buck. Consistent donations over several years are hugely valued by charities, so consider gifts that can be sustained over time. Don't know year-to-year how much you'll make? Consider plowing larger donations into a donor-advised fund in years when your income is high and you need a larger tax deduction.

In lean years, use the fund to maintain previous giving levels.

•Bring the kids. Ophthalmologist G. Peyton Neatrour, based in Virginia Beach, Va., recently brought his wife and three kids on a missions trip to the Philippines.

The children, ages 16 and older, helped raise funds for the trip's expenses beforehand, and helped Neatrour in the field while he performed cataract surgeries.

For family bonding opportunities, it doesn't get much better than that, Neatrour says.
"My father started a family foundation to support university scholarships. I thought this would be a nice way to give back'' in the next generation, he says. "We all got involved."

Janet Kidd Stewart is a freelance writer based in Marshfield, Wis. She holds a bachelor's degree and master's degree from the Medill School of Journalism at Northwestern University. She can be reached at editor@physicianspractice.com.

This article originally appeared in the online January 2012 issue of Physicians Practice.