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Archive of Previous Questions

What Factors Should Be Considered in Naming an Institution?

Sue Carruthers, FAHP is President of the BC Children’s Hospital Foundation in Vancouver, British Columbia. It is an extraordinary institution and one of the foremost Children’s Hospitals in North America.

She asked Jerry Linzy, our Senior Managing Partner, what factors should be considered in naming a hospital as distinguished as hers.  Here is Jerry’s reply:

1. The first consideration is— what will the market bear, and what figure is the Board willing to settle for.

2. A gift in the range of $250 million would be appropriate for your hospital.  Certainly a gift less than $100 million should not be considered. This is a wide range, but I know the probable donor  you have in mind and he has the capacity to consider a gift of this level.  Since we have not discussed what the donor might be thinking, my opinion is based more on the quality and distinction of BC Children’s Hospital.

3. BC Children’s Hospital is a premiere institution.  You are a teaching hospital, provide quality care, research, and more.  Your service area is British Columbia, Asia, and world, really.  The interests of your probable donor are global as well. .

4. Naming BC Children’s Hospital is a once in a lifetime opportunity.

5. The gift can be made over multiple years.  It can be both cash and deferred.  In many cases, especially for a gift this size, it can be made over a longer period than the traditional three to five years.  This is, of course, true if an estate gift is included. 

6. The final decision rests with the Board of Directors and other governing entities.  Our advice is not to undervalue what is clearly a priceless asset for children and families.

7. There is neither a national, nor an international formula. for making this decision because of the intangibles involved, e.g., passion, commitment, ego, and so forth.

8. Some institutions require 100% of the cost of a new building, plus endowment, to maintain the facility as a requirement to name a facility.

9. Hospitals in the U.S. contend with issues like mergers, conversion from nonprofit to for-profit, changes in facilities to accommodate new technology, and the like.  In order to secure a major, transformational gift— institutional stability is imperative.

10. Local market factors can have an effect on the size of the gift, e.g., similar institutions, etc.  But, you have no equal in all of British Columbia.

11. Consider the composition of the gift.  Will you ask for a cash gift in one payment or over five years?  Will you consider a gift that is part cash and part estate gift?

12. Remember, having a gift that names the Hospital does not preclude other named gift opportunities like a wing, a room, and so forth.

13. Square footage and other building features for comparison purposes are not all that relevant.  While overall size of the project might have some impact, it is the passion for the institution, the quality and reputation... well, you get the idea.

14. The same applies to a comparison of the size of the gift that named other Children’s Hospitals.  Knowing what others have done gives you an idea of how to value your institution compared to others.  But the gift amount you ask for will, in the end, be subjective, based on pride and all the other things I’ve discussed.

15. Be aware, this process is a negotiation between you and the donor.

16. The level of the naming gift for the institution and/or campus sets the standard and benchmark for other named gift opportunities.  If the named gift is too low, it precludes asking for larger appropriate amounts for anything else.

17. It is important for the Board of Directors to conduct their due diligence.  Regardless of your final decision and success, you will not please everyone.  The community will be pleased with the gift, but many will be unhappy about changing the name.

Our experience is this is a short-lived issue.  As time passes, there will be acceptance and support.

That said, you need a solid action plan to transition the name and be able to respond to all questions.  Your marketing and public relations departments must be involved.  Indeed, you may want to engage a professional marketing firm to assist if you do not have the expertise on staff.

- Jerry Panas