Hospital charities fight to raise funds as giving slows in austerity Britain

Great Ormond Street Hospital, represented by child performers in the London 2012 Olympic Games opening ceremony, raises additional income through its charitable arm. Photograph: Bloomberg/Bloomberg via Getty Images

The Olympics Movement bans corporate logos from official venues, but last year the brand of probably the most successful organisation in its sector found its way into the London 2012 Olympics official opening ceremony. Great Ormond Street Hospital Charity, whose baby and teardrop logo appeared in a tribute to the NHS, raised £66.3m in 2011-12 – around a fifth of the operating income of the health service trust it supports.

Great Ormond Street benefits from a perpetual right to royalties from JM Barrie's play Peter Pan, but has recently raised millions from selling naming rights to new buildings.

In June, Whitbread pledged £7.5m for the Premier Inn Clinical Building, named after the company's hotel chain. This will join the Morgan Stanley Clinical Building (the bank and its staff donated £11m in 2010) and the Mittal Children's Medical Centre, named after Aditya Mittal (heir of billionaire industrialist Lakshmi Mittal) who donated £15m to the hospital in 2008.

Other NHS children's hospital charities tend to be far smaller, earning between £1m and £2m annually to fund specialist equipment, play areas, art therapy and the like. But with state funding effectively frozen in real terms and a string of new hospital buildings opening over the next few years, hospital charities are fighting to raise their profile and their income.

It can be an uphill struggle. "Sometimes you will go to a potential funder and the opening gambit is, why should I give you any money, I pay my taxes," says David Vernon-Edwards, director of the Children's Hospital Charity. "We emphasise that our money only goes on enhancing the NHS service, not subsidising it – and spurring the NHS trust to greater things. We're not a slush fund," he stresses.

The charity aims to raise £20m by September 2016 to support the transformation of Sheffield Children's hospital. To meet its target in tough times the charity has changed its focus, dropping the word 'city' from its name. "It stopped people from giving money to it, as they thought it was just for children from Sheffield," explains Vernon-Edwards. "We have to go out to national sources, to high net-worth individuals." The charity is now asking for larger amounts from existing donors and organising "high end" events.

Liverpool's Alder Hey Children's Charity is working with local businesses. Liverpool retailer Shop Direct donates sample clothes for resale and has helped the charity produce an app. Aintree racecourse help the charity to organise fundraising events around the Grand National, including the sale of jockeys' colours and sponsorship of a race.

In September, the charity will launch a campaign to help equip the new Alder Hey in the Park hospital, which opens in autumn 2015. Director of charities Clare White says this provides an opportunity to install extra equipment, technology and play facilities. An undisclosed national retailer has agreed to provide the charity with access to its customers through direct mail and online via its website, and will sell a product with profits going to the appeal. "The most important thing with companies is that there is mutual benefit in the partnership," says White. "Fundraising is a profession, and you have to work on a professional basis."

Maureen Harrison, chief executive of Edinburgh's Sick Kids Friends Foundation, has worked for the charity for 17 years. She says that corporate fundraising has grown considerably over the years, but has changed as a result of the financial crisis which hit Edinburgh hard. "We no longer have events at which corporates provide sponsorship and take tables in the way they used to," she explains.

Such largesse is now out of place in an age of austerity and redundancy. Instead, employee fundraising has become more important to the charity. Staff may vote for an employer's dedicate charity, and companies allow staff to take volunteer days (for professional as well as altruistic reasons) and match personal donations. "It starts with the grateful parents, the friends of grateful parents and the former patients," says Harrison.

All three charities run shops within their hospitals, and through these are not big money spinners they contribute in other ways. White describes Alder Hey's charity shop as "a great awareness raiser" and will be situated in the main atrium of the new re-developed hospital.

The Sick Kids charity shop sells basic toiletries as well as fundraising items. In emergencies, parents often follow their children to the hospital from remote parts of Scotland without packing essentials, and when they get to the hospital they don't want to leave the building, so the shop provides an important service.

What about the naming rights which have raised tens of millions for Great Ormond Street? Harrison says it is very important to have a clear policy on this avenue agreed in advance: "It's an area that could easily be got wrong." The Children's Hospital Charity has agreed a price list for various patient rooms and facilities, Vernon-Edwards says, and already has commitments for up to £25,000.

For those who want to remain anonymous there are other ways to recognise large gifts, such as installing a picture of a landscape a donor knows well in the hospital. But as Alder Hey's prepares to open its new research and education centre, White adds: "If someone wants to put in £7m, they can put their name on it."

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