strategic giving and the nursing shortage

Int. J. Nonprofit Volunt. Sect. Mark. 11: 3–11 (2006)Published online in Wiley InterScience(www.interscience.wiley.com). DOI: 10.1002/nvsm.37

Strategic giving and the nursingshortageySteven G. Ullmann1*, Pamela Martin2, Catherine Kelly3

and Jenny Homer41Professsor of Management, Vice Provost and Dean of the Graduate School, University of Miami, USA

2Former Director of Public Policy, Blue Cross and Blue Shield of Florida

3V.P. Signature Programs, Blue Cross and Blue Shield of Florida

4Graduate Research Assistant, Departments of Political Science and Epidemiology and Public

Health, University of Miami, USA

* Health care organizations in the United States face a significant nursing shortage, which

seriously impacts the quality and availability of health care. Confronting this challenge

requires involvement fromorganizations beyond the public sector. This paper explores an

initiative by Blue Cross and Blue Shield of Florida, exemplifying the concept of ‘strategic

philanthropy,’ to contribute their financial resources and strong institutional ties to

respond to the current and future shortage of nurses in Florida. Through this intervention,

the company and partnering organizations hope to benefit the health care sector, the

public, and themselves from the outcomes associated with the generation of a greater

supply of nurses.

Copyright # 2006 John Wiley & Sons, Ltd.

Introduction

Philanthropy has long been a tradition and partof the cultural framework of the health careindustry in the United States. From the earliestdays of health care delivery, providers and thecommunity donated their time and funding tocare for the poor or medically indigent (thosethat became poor due to medical illness orinjury). The first hospitals were generally not-

for-profit community or religiously affiliatedfacilities targeting the needs of the localcommunity and those unable to afford thecosts of care. The health care sector’s traditionof philanthropy continues, but today it involvesmore than individual hospitals.

Different organizations, companies, andinstitutions are now collaborating and contri-buting philanthropically to achieve commongoals that include the provision of accessible,cost effective, and quality health care. Theshortage of nurses in theUnited States is havinga negative impact on the ability to meet theseaims. An interesting initiative has been under-taken by the private enterprise, Blue Crossand Blue Shield of Florida (BCBSF), to miti-gate the effects of the nursing shortage inFlorida through strategic giving. By using itsleverage and involving other institutions,BCBSF intends to alter the future supply ofnurses in the state.

—————*Correspondence to: StevenG.Ullmann, Vice Provost andDean of the Graduate School, University of Miami, 240Ashe Building, P.O. Box 248033, Coral Gables, FL 33124-4628. E-mail: [email protected] Cross Blue Shield Florida (BCBSF) and itssubsidiaries serve 6.6 million Floridians, establishing thecompany as a regional and national health industry leader.Headquartered since 1944 in Jacksonville, Fl., BCBSF is aprivate, policyholder-owned, tax-paying mutual com-pany. Its philanthropic resources are strategically direc-ted toward improving Florida’s health care access, qualityand cost issues to improve thewell being of all Floridians.

Copyright # 2006 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., February 2006

Examining the nursing shortage

The literature is full of discussion regarding thecritical nursing shortage and its negative effectson the quality and costs of heath care services.Changes in the health care industry, greatercareer and educational opportunities forwomen, an aging workforce, and stressfulworking conditions have contributed totoday’s nursing shortage (Kimball and O’Neil,2002). In a recent article, Buerhaus et al. (2003)conclude that the shortage of nurses in theUnited States is expected to continue withoutany long-term solution in sight.Estimates indicate that the national nursing

shortage in 2000 approached six per cent, withdemand for nurses exceeding the supply by110,000 (U.S. Department of Health andHuman Services, 2002a). Between the years2000 and 2020, the demand for nurses willincrease by 40 per cent, but supply during thissame period is expected to increase by only sixper cent (U.S. Department of Health andHuman Services, 2002a). The net effect nation-ally is an anticipated shortage approaching 29per cent or 808,000 nurses by the year 2020(U.S. Department of Health and Human Ser-vices, 2002a).The shortage issue is compounded by the

fact that only nine per cent of the nursingworkforce is under 30, while 51 per cent of thenursing workforce is over the age of 45 (U.S.Department of Health and Human Services,2002a; Geolot, 2001). Retirement issues willonly exacerbate the issue.

Demands and strains placed on our healthcare system will certainly grow as the U.Spopulation ages. The fastest growing segmentsare those over the age of 65, and the fastestgrowing within this group are those over85 years old (Moody, 2002). (Table 1)

The ramifications are even more significantfor Florida, given the demographic makeup ofthe state’s population with its large elderlysegment and the demands that this populationgroup places on the health care sector. By theyear 2020, the demand for registered nurses inFlorida is predicted to exceed the supply by33 per cent (U.S. Department of Health andHuman Services, 2002a). This is a situation thateven outstrips the expected shortage of nursesfor the nation as a whole (Florida HospitalAssociation, 2005). (Figure 1) The nursingshortage is a problem that will cause Floridaconcern for many years to come.

Hospital nursing shortages

During the 1980s and 1990s, for-profit hospi-tals began entering the healthcare market and

Table 1. Population Growth by 2020 in the U.S. andFlorida (U.S. Department of Health and Human Services,2000)

Population Growth by 2020 U.S. Florida

Total 18% 29%Over 65 53% 66%

Figure 1. Estimated Per cent Shortage of Registered Nurses 2000–2020 (U.S. Department of Health and HumanServices, 2002a)


4 S. G. Ullmann et al.

competing with not-for-profit hospitals. Thischanging marketplace along with the rise ofmanaged care and a growing emphasis oncontrolling costs influenced the work environ-ment at many hospitals (Salamon, 1995;Kuttner, 1997).With 40 per cent of all registered nurses

currently employed outside of the hospitalsector and the indication that a trend exists forfurther exodus from this setting, there isconcern that there will be continued strain onthe hospital sector, where nurses are in great-est demand and vacancy rates currently standat 13 per cent nationally (American HospitalAssociation, 2001; U.S. Department of Healthand Human Services, 2002b). As nurses leavethe hospital setting in favor of working inenvironments perceived as less stressful suchas, the home health sector and the doctor’soffice, there is the additional disturbing factthat many are choosing to leave the professionaltogether. Nationally, 81.7 per cent of thoselicensed to be registered nurses currentlyworkin the field of nursing (U.S. Department ofHealth and Human Services, 2002b). Further,of those employed in the field, 20 per cent areonly working part time (U.S. Department ofHealth and Human Services, 2002b).The state of Florida has been experiencing

shortages of nurses and allied health profes-sionals similar to the nation as a whole. Thehospital nursing vacancy rate in Florida iscurrently estimated at 8.2 per cent (FloridaHospital Association, 2005). Although this is animprovement from the 12.5 per cent vacancyrate reported in 2002 in Florida, this decline isdue, in large part, to proactive retentionstrategies initiated by the hospital sector,targeting mostly participation rates of nurses(Florida Hospital Association, 2003, 2005).Nonetheless, in 2004 there was a shortage of

5,342 nurses in the state, an estimate expectedto increase to 61,000 by the year 2020 (FloridaHospital Association, 2005).

Spetz and Given indicate that only throughsignificant economic incentives, i.e., wageincreases on an annualized basis of 3.2 to3.8 per cent, and increased nurse training willthis critical long-term shortage be affected in apositivemanner (Spetz and Given, 2003). Theyhave modeled, appropriately, that there are lagtimes between increased salaries and growth inthe output of nurses from our nursing schools.Implicit in the discussion concerning requiredsalary increases and output from the educationsystem is the concept of return on theinvestmentmade in anursing education,whichis related to the up front costs of obtaining thatnursing education in the first place and salariesupon graduation.

Nurses as a reflection of thepopulation

Communication and empathy are importantfunctions that are taken on by nurses, inaddition to the medical and health careaspects of their profession. Race, ethnicity,and language are factors in cultural compe-tency and represent important variables inthe determination of quality of health careprovided. With a very diverse population inthe United States, and one that is becomingmore diverse over time, currently only13.4 per cent of registered nurses are froman under-represented population group (U.S.Department of Health and Human Services,2002b). Less than 5 per cent of registerednurses are African American, 3.7 per cent areAsian, and 2 per cent are Hispanic (U.S.Department of Health and Human Services,2002b). (Table 2) Only 5.4 per cent of the

Table 2. Comparison of the demographic composition of nursing and general population in the U.S. in 2000 (U.S.Department of Health and Human Services, 2002b)

National Comparison White Non-Hispanic African American Asian Hispanic Other

Nursing Population 86.6% 4.9% 3.7% 2.0% 2.8%General Population 69.1% 12.1% 3.7% 12.5% 2.6%


Strategic giving and the nursing shortage 5

nursing population is male (U.S. Departmentof Health and Human Services, 2002b). Thisdoes not adequately represent the rich andever changing diversity of the U.S. popula-tion. As a result of concerns associatedwith the makeup of the nursing population,there has been a call for greater recruitment ofnursing students from under-representedgroups (Kimball and O’Neil, 2002).

Quality and the nursing shortage

The implications of the nursing shortage forthe quality of health care services are veryserious. In a 2003 survey of hospitals con-ducted by the Florida Hospital Association,44 per cent of those surveyed indicated thatthe nursing shortage was directly affectingovercrowding in the emergency room. This isdue to a domino effect, wherein staffed bedsare not available in themain part of thehospital(23.8 per cent of the hospitals indicated adecreased number of nurse staffed hospitalbeds), thereby causing a backup in theemergency room (Florida Hospital Associa-tion, 2003). Over 25 per cent of the hospitalssurveyed indicated decreased patient satisfac-tion resulting directly from the nursing short-age, and nearly 20 per cent self-reported anincreased rate of reported incidents (FloridaHospital Association, 2003). Additional con-sequences included increased wait times forsurgical procedures, the closing of nursingunits, and the cancellation of elective surgicalprocedures. In a study conducted by research-ers at the Harvard School of Public Health andVanderbilt University’s School of Nursing,hospital nurse staffing was found to have adirect relationship with patient outcomes,with reduced staffing resulting in a greaterincidence of urinary tract infections andbleeding (U.S. Department of Health andHuman Services, 2001).

Trends in nursing school enrollment

Perhaps what is most disturbing is the down-ward trend in nursing school enrollment,exactly at the time when the predictions for

nursing shortages are increasing for the coun-try in general, and the state of Florida inparticular. Whereas 7,961 students enrolledin nursing programs in the state in 2000–2001,only 4,679 enrolled in 2002–2003, a decreaseof nearly one-third (Florida Hospital Associa-tion, 2003; Florida Hospital Association, 2005).Recently, enrollments have started to increase,but these levels are still not enough to meetdemand.

This situation is compounded by a majorshortage of faculty who are appropriatelytrained to staff nursing schools. Of the 795nursing instructors in Florida in 2000, 143planned to retire by 2003 (Florida HospitalAssociation, 2001). Therefore, it is notsurprising that several schools in Floridahad four times as many applicants as vacan-cies, a factor partially determined by thefaculty available to teach (Florida HospitalAssociation, 2001).

Much of the responsibility for dealing withthe nursing shortage has been placed on theshoulders of the public sector.With limitationson federal and state budgets, and demandsplaced on these budgets, resources devoted toand outcomes resulting from the public sec-tor’s efforts have not been encouraging. Thequestion then arises whether those in theprivate sector have the potential to have,perhaps, the greatest influence on this problemfrom a strategic perspective.

Strategic Philanthropy

In their important work in the Harvard

Business Review on Strategic Philanthropy,Michael E. Porter and Mark R. Kramer speak of‘strategic giving’ (Porter and Kramer, 2002).The concept of strategic philanthropy orstrategic giving is one in which an organizationin the private sector identifies an issue withsocial and economic implications in which thecompany shares an interest and has the abilitiesto resolve. The authors state that ‘true strategicgiving’ occurs not by unfocused giving tovarious causes or interests, but rather byphilanthropic activity that benefits both theorganization and society as a result of the



unique experiences and abilities of the organi-zation. As Porter and Kramer (2002: 67)indicate, ‘the acid test of good corporatephilanthropy is whether the desired socialchange is so beneficial to the company that theorganization would pursue the change even ifno one ever knew about it.’ Additional leverageoccurs when other firms can join in to helpachieve a common strategic philanthropicgoal. Companies can provide their expertiseand resources, cooperate with other organiza-tions, and use leverage to achieve moreeffective and lasting solutions for challengesaffecting business (Hoyt, 2003; London andRondinelli, 2003).

The Intent of BCBSF’s StrategicPhilanthropy

Based on this concept of ‘strategic philan-thropy,’ Blue Cross and Blue Shield of Floridahas undertaken a direct intervention in anattempt to see if effective change can beinitiated and implemented to mitigate thenursing shortage by utilizing economic incen-tives, using its expertise, and sharing in thepotential positive results from the philanthro-pic intervention. The intent of BCBSF’s under-taking is multi-faceted:

i) To provide incentives for students to gointo the field of nursing

ii) To provide incentives for colleges anduniversities to pool their resources andwork together as teams to offer additionalopportunities for students to study nursing

iii) To increase the pool of under-representedgroups entering the field

iv) To increase the pool of nursing educatorsavailable to teach in the field

v) To involve health care facilities directly aspartners to help solve their nursing short-age issue and ultimately use the humancapital product of the colleges and uni-versities involved

vi) To meet the firm’s own strategic needs byassuring that themembers it covers receivethe best health care possible in a cost-effective manner.

The Specifics of BCBSF’sPhilanthropic Experiment

Blue Cross and Blue Shield of Florida’s experi-ment to address the chronic nursing shortageproblem utilizes the principle of strategicphilanthropy, involving a giving program thatleverages its financial resources by creatingstrategic partnerships with universities, provi-ders, and students alike. The realization is thatquality health care and cost effectiveness are ofmajor importance to everyone using anddelivering care. BCBSF has been a participantin the health care arena in Florida for 60 years.In alignmentwith its corporate vision, BCBSF istaking an active role in becoming part of thesolution to the nursing and allied healthprofessional shortage through communityoutreach.

With this focus in mind, BCBSF has estab-lished a program involving sizeable endow-ments to 2-year community colleges, 4-yearcolleges, and doctoral research universitiesthroughout the state of Florida for purposesof developing and expanding nursing educa-tion and career development. Leveraging statematching grants, partnering with non-profitfoundations, and using moral suasion to assurethat colleges and universities, as well as thephysician and hospital community, work as ateam in this effort, BCBSF has provided$5.6 million over the past two years to supportnursing, pre-nursing, and allied health profes-sional education in the state. BCBSF sees its roleas being a catalyst in this effort and, ultimately,a beneficiary as a ready supply of locally andprofessionally trained registered nurses andallied health professionals will bring abouthigher quality care, accessibility, and patientsatisfaction in a cost effective manner. Asindicated, this is the essence of strategicphilanthropy.

There are a number of aspects to these grantsthat make them especially interesting and apotential model for others to follow. First,BCBSF is an organization outside the directdelivery of health care that is attempting todirectly reduce the shortages of nursing andallied health personnel. Second, the process



that has been instituted by BCBSF is focused onthe problem, both current and future. BCBSF’suse of endowments establishes a long-termfunding mechanism to assure that the issue ofshortages is not just dealtwith this year or next,but 20 and 30 years from now, periods inwhich, as has been seen, the crisis is expectedto worsen in the absence of appropriateintervention. Endowments assure a long-termcommitment. Third, while this funding cannotsolve all of the problems associated withnursing shortages, this level of giving can andhas begun to attract partners and additionalfunding from external sources, including thegovernment and private and non-profit founda-tions, that can work on longer term solutions,such as enhancing the stature and attractive-ness of the profession.BCBSFhas targeted its endowments in such a

way as to provide incentives for partneringbetween institutions that may not haveoccurred in the absence of these endowments.Examples include providing for pre-nursingtuition and programming help in colleges anduniversities that lack a nursing program. Inorder to address the serious shortage ofminority nurses, the BCBSF endowments havealso specifically targeted Historically BlackColleges and Universities (HBCUs) and feder-ally designated Hispanic- Serving Institutions(HSIs) by providing tuition and programdevelopment endowments to minority stu-dents. These endowments fund students injoint-degree programs across universities aswell as minority undergraduates, who excel inthe sciences, by encouraging them to earn abachelors degree in a science at one institutionwhile simultaneously earning a nursing degreeat a partner institution. Such incentives,created through long term endowment fund-ing, aremeant to increase the number of nursesproduced in the state. In addition, this fundingmay encourage the pursuit of higher educationin the field of nursing to reduce the shortage ofqualified university level teachers in the field.To provide disincentives against brain drain

(i.e. nurses taking advantage of these opportu-nities and then choosing to locate elsewhere),programs are purposely not fully funded but

provide incentives for the institutions offeringjoint degrees to seek out partners amonghospitals. Hospitals are encouraged to partiallyfund students in these programs in return forattaining priority recruiting opportunities.Such partnerships have already been devel-oped as an outgrowth of these endowedpartnership programs. Further, BCBSF hasexplored establishing nurse-mentoring pro-grams in the hospital setting. Again, the focusis on a long-term policy to deal with theshortage issues in the state.

A long term model to address thenursing shortage

This initiative is seen as an important steptoward a ‘continuum of responses,’ a modeldeveloped by researchers at the Robert WoodJohnson Foundation (Kimball and O’Neil,2002). The intent of themodel is to understandboth the factors underlying the nursing short-age and the efforts being undertaken to impactthe issue, as well as to conceptualize theevolution needed to reinvent and reinvigoratethe profession. (Figure 2)

The health care industry has undertaken thefirst step of the model, ‘Scrambling,’ wherefinancial incentives are the primary tool used toattract individuals to the profession. While thisstep can result in short term changes, they arenot sustainable and additional steps are required.

BCBSF’s use of strategic philanthropy hasmoved the state of Florida’s efforts to solve thenursing shortage to the second level alongthe continuum, the ‘Improve’ stage. At thisstage, the focus is on expanding educationalopportunities, increasing diversity, and men-toring, all of which are incorporated intoBCBSF’s initiative. Coalitions of different stake-holders and institutions form and begin invest-ing in longer term strategies.

Over time, these opportunities should leadto the third and fourth stages. New nursingroles and greater autonomy are the focus in the‘Reinvent’ phase. During ‘Start Over,’ stake-holders from all levels are involved in theestablishment of new models to provide carewith nurses as ‘professional partners.’



BCBSF, together with its partners, will havethe opportunity to monitor and assess theoutcomes associated with this program. Thisframework, with the intent of advancing thenursing profession further along the conti-nuum to a new level of practice, providesfuture opportunities for BCBSF to partner withothers in achieving these goals.

Initial results

Evaluating the outcomes of this program,another key concept of strategic philanthropy,will be an important next step in this process.Only by measuring the outcomes of such aprogram can the effectiveness of an organi-zation’s dollars be determined. Additionalpartners with similar goals may then beenlisted.Although it is far too early to determine the

ultimate impact of Blue Cross Blue Shield ofFlorida’s strategic giving initiative on thenursing shortage in Florida, there are someearly results to report. The educational partner-ship formed in 2004 between FloridaMemorialUniversity, a Historically Black University;St. Thomas University, a federally designatedHispanic Designated Institution; and the Uni-versity of Miami has demonstrated some initial

results. At this time, 21 students who haveentered the program to obtain dual degrees inscience (from one of the two ethnicallydenoted colleges) and nursing (from theUniversity of Miami) have been accepted toadvance to the University of Miami’s nursingstudies program. An additional 18 students arecurrently progressing through the scienceportion of the dual degree program at theirhome school (St. Thomas or Florida MemorialUniversity) with aspirations of obtaining theirnursing degree at the University of Miami aswell.

The targeted philanthropy provided byBCBSF has attracted additional public andprivate funding, enhancing the original endow-ments. The $2.5 million endowment estab-lished at Florida’s Foundation for CommunityColleges was matched at 100% by theFlorida legislature, raising the endowment to$5 million. The $1 million gift from BCBSF toestablish the educational partnership betweenFlorida Memorial College, St. Thomas Univer-sity, and the University of Miami has attractedother donors. More than $6 million in dona-tions from private sources have been added tothis effort.

It should be noted that these outcomes haveoccurred after just a little over 1 year into this

Figure 2. Kimball and O’Neil’s Continuum of Responses (2002)Reprinted with permission from the Robert Wood Johnson Foundation.



program. The expectation is that thisprogram’s successful outcomes will only con-tinue and grow over time, given the long-termstrategy of this innovative program. Later workwill focus on monitoring and reporting futureresults of the program.True, this is only a first step in dealing with a

major problem in the United States, but it is animportant step that, from initial indication of itssuccess, can serve as amodel of strategic givingthat can be mirrored in other parts of thecountry.

Biographical notes

Dr. StevenUllmann is a Professor at Universityof Miami in the Schools of Business Adminis-tration and Medicine with a primary appoint-ment in the Department of Management. Healso holds the positions of Vice Provost forFaculty Affairs and University Administrationand Dean of the Graduate School. His researchand publications have focused on health caremanagement, health care economics, long-term care, and management and economicsof non-profit organizations. He first joinedUniversity of Miami in 1979.Dr. Pamela Martin most recently served as

Director of Public Policy for Blue Cross andBlue Shield of Florida. Her research has focusedon the economics and reform of governmententitlement programs, issues impacting theelderly, health outcomesmanagement, and theimpact of legislation on health care manage-ment and payment.Catherine A. Kelly is Vice President of Public

Affairs, Signature Programs for Blue Cross andBlue Shield of Florida. Through the design andimplementation of strategic signature initia-tives, she builds awareness and support for thecompany’s unique social mission. She joinedthe company in 1984. In Florida, Kelly serveson the boards of the March of Dimes, Commu-nities in Schools and the Foundation forCommunity Colleges.Jenny Homer recently received her Masters

of Public Administration and Masters of PublicHealth from the University of Miami. She is

interested in health administration and publicpolicy.

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