As veterinary professionals, we are charged through personal compassion, moral conviction or even social pressure to care for animals in need when owners lack financial resources. As business owners and managers, we understand that we can’t allow our hearts to lead the way to negative financial consequences.
To strike a balance between the two, many practices have turned to charitable funds and nonprofit formations to intentionally and measurably care for our pet communities.
How to Do It
- Define your mission: Who do you desire to help, and why? How much time and resources do you want to spend caring for this group of people and animals? Do you want the entire team involved — is everyone on board? — or a select few? Spend time thoroughly answering these questions and share what you decide with your team. A clearly defined mission will help keep everyone focused as questions come up and curveballs are thrown.
- Establish the eligibility criteria: What services and products are you willing to cover? Does the animal have to be an established patient? Will the owner be responsible for a portion of the bill? Will you require the owner to first exhaust third-party financing? A common practice is to designate a case-review team or to define who in the building is allowed to authorize and offer the use of charitable funds. If you choose a funding structure monitored by a third party, be sure that your mission and eligibility criteria are ultimately aligned with bylaws or guidelines.
- Estimate your budget: What is the scope of your mission? How much money do you expect to need to cover expenses? Where will the funding come from? How often will it be replenished? Whether your annual budget is $500 or $50,000, planning how money will be raised and spent will help keep you on target throughout the year.
- Choose the funding structure: After you have clarified your desired mission, eligibility criteria and annual budget, the final step is to determine the best funding structure.
501(c)(3) Formation
One option for a veterinary hospital looking to generate and manage funding for patients in need is the creation of a formal, separate and tax-exempt charity — one designated a 501(c)(3) by the Internal Revenue Service. While this might be the appropriate choice for large-scale charitable missions, it is not an endeavor to enter into with carefree abandon. The process of earning 501(c)(3) status requires significant paperwork and an organizational structure, including obtaining a new employer identification number (EIN), filing quarterly tax documents, creating a board of directors and bylaws, and registering with your state, to name a few. Federal and state regulations will dictate how the money and services are managed.
In my experience, the application process takes about a year to complete and requires a lawyer and an accountant. Once the approvals are received, the organization can officially be called a charity, actively solicit tax-exempt donations from clients and community members, and apply for local and national grants.
In-House Angel Fund
At the other end of the spectrum, hospitals may create an in-house account to fund cases deemed appropriate. The fund is often seeded by the practice or a generous client gift and is then replenished through employer, employee and client contributions. This can be a great introductory step for creating a culture of goodwill in the practice or a way to rein in an existing culture of excessive and destructive discounted services.
While this is a popular option among veterinary hospitals, note that angel funds are not charities and that marketing them as such could have legal consequences. Employee and client contributions towards in-house funds are not tax-deductible. And because the accounting does not have third-party oversight, proceed with caution if you choose to solicit donations from clients.
Third-Party Charitable Fund
Veterinary practices not interested in creating a 501(c)(3) but open to a tax-exempt, legally sound option for client donations can consider the Goldilocks route: joining a third-party charitable fund. This option can benefit the practice not only by removing the bulk of the administrative work but also by possibly leading to larger client donations because of the tax exemption.
The two I see most frequently used are the Veterinary Care Foundation and the American Veterinary Medical Foundation’s Veterinary Care Charitable Fund. The core of each is the same: Clients donate to the third-party fund and earmark the contribution to be used by a particular veterinary hospital. The hospital then spends the money on eligible cases.
Promote Your Goodwill
Regardless of whether you plan to ask for public donations, remember to tell clients about the good work your practice is doing in the community. While marketing charitable efforts may feel uncomfortable or counterintuitive, letting the public glimpse your heart can build valuable goodwill — something that is difficult to achieve in the exam room.
Wondering how to better reach pet owners in their 20s and early 30s? Millennials, more than any other generation, research and become loyal to companies that advocate for causes important to them. If you do not tell them, they will never know.
All too often, our profession is unfairly cast in the negative light of being “all about the money.” While I have never met a veterinarian who fit that description, it seems to have somehow become a common misperception.
Be intentional about publicizing the extra mile you have gone for your charitable cases. Praise the associates, technicians and support team members who had a hand in making a positive difference in the lives of your patients and clients. Tell your story and help rebuild the reputation of veterinarians everywhere, all while fulfilling your passion and caring for the people and animals close to your heart.