After you complete your initial read/analyze through this case, what are the initial thoughts that cross your mind? How does typical leadership approach move you into one direction or action versus another? Does past experience influence your response?
The Dana-Farber Cancer Institute: Development Strategy 9-599-104 R E V : D E C E M B E R 6 , 2 0 0 7 ________________________________________________________________________________________________________________ Research Associate Marie Bell prepared this case under the supervision of Professor V. Kasturi Rangan. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 1999, 2000, 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1- 800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. V . K A S T U R I R A N G A N M A R I E B E L L The Dana-Farber Cancer Institute: Development Strategy Susan Paresky, Chief Development Officer for the Dana-Farber Cancer Institute (Dana-Farber), paused for a moment to scan the skyline surrounding Boston’s Longwood Medical area. Paresky had come to the Institute almost two years earlier in April 1997, arriving at the close of a successful capital fund drive that had raised over $100 million. In addition to the capital campaign, the Institute had raised $35 million for its annual fund through its two major fundraising arms: one under the Dana- Farber Cancer Institute name and the other under the Jimmy Fund umbrella. Notwithstanding this fundraising success, the pace at the Development Office remained hectic. The Institute’s development needs were limitless, and whatever funds Paresky could raise, Dana-Farber CEO and President David Nathan could put to good use. Nathan reflected on his ambitions for Dana-Farber, Dana-Farber is a living laboratory focused on eradicating cancer. We provide the best possible patient care today and do the research needed to provide even better care for tomorrow. Such an environment does not come without a price. We are constantly in need of money for new space, infrastructure, and training. Patient fees and government research grants only cover about 80% of our ongoing costs, so we look to the Development Office to make up the shortfall on an ongoing basis and provide capital funds through a major fund drive about every five years. We need to be able to recruit the best and brightest talent and provide them with world class facilities to conduct their research. Asking such high talent to move to Boston is expensive, especially when you consider its cost of living relative to other centers. Beyond the recruitment of leading experts, there are huge expenses in training doctors to do clinical research, especially those researchers that cannot win government grants until they have proven themselves. Since her arrival, Susan Paresky had taken several meaningful steps to focus the fundraising operations for the Institute. She had rapidly effected changes to the organizational structure of Dana- Farber’s development office (see Exhibit 1), and raised $39.8 million in 1998. Some of the major changes included the addition of 28 new positions and modification of job descriptions to more effectively focus development personnel. Paresky commented, Every day there is an increased need for funds at the Institute. Philanthropic money is available in the market, but to access it you need a well-organized professional development team. With an ever-increasing need for funds, we must further reorganize our operations and This document is authorized for use only by Kristopher Durham in Capstone Experience B - Fall 2021 at Wake Forest University Medical School, 2021. 599-104 The Dana-Farber Cancer Institute: Development Strategy 2 establish critical positions to ensure that we are able to meet our targets. An outstanding question is the level of additional cost the President and Board are willing to tolerate in order to raise that incremental $5 million per year over the next five years. Reflecting back on her previous job as Development Dean at Harvard University’s School of Public Health, Paresky offered, I am struck by how many avenues we have for fundraising at Dana-Farber. At the University, we relied on alumni for major gifts, but here we have a broad portfolio of activities that raise money. On the one hand, that is good news because of the wide variety of ways to reach all levels of donors. But on the other hand, it necessitates thoughtful management and prioritization of the full portfolio, as some programs are less effective and raise less money although they may be important for other reasons; some may not even fit with our mission and image anymore. We need to develop a clear idea of which opportunities to pursue and which ones to turn down when, for example, well meaning groups ask our assistance to help them raise less than $5,000 through small events in honor of a loved one. This question also comes up frequently with cause marketing proposals. We need to know which opportunities we should pursue and which we should forgo. Underlying all this is the question of the role of the Development Office in implementing the vision of the organization. Our role is not simply to raise money, but to do it in a manner that is consistent with the strategy of the Institute. In short, we need a leading edge development strategy attuned to the changing nature of fundraising and a way to think about how we measure success properly. The Dana-Farber Cancer Institute The Dana-Farber Cancer Institute, a research and teaching affiliate of the Harvard Medical School, summarizes its mission as “dedicated to discovery. . . committed to care.” The nationally recognized Institute was one of the world’s premier cancer research centers. Founded in 1947 by Dr. Sidney Farber, a pioneer in cancer research, the Dana-Farber was renowned for its blend of clinical and basic research, and the ability to incorporate the results of its discoveries into improved treatment techniques for children and adults with cancer.1 The Dana-Farber’s research programs focused on the development of more effective drugs and drug combinations, new measures to reduce the side effects of chemotherapy and radiotherapy, and the introduction of new treatment technologies for forms of cancer resistant to standard measures. (See Exhibit 2 for facts about cancer.) In 1997, the Dana-Farber entered into a joint venture with two other major Harvard teaching hospitals: Massachusetts General and Brigham and Women’s. With the Dana-Farber/Partners CancerCare (DF/PCC) venture, adult oncology services became coordinated across the three facilities, with outpatient services provided at Dana-Farber, inpatient care at Brigham and Women’s, and both inpatient and outpatient services at Mass. General. In February 1997 the integration of services began with the movement of the Dana-Farber’s beds to a newly renovated and enlarged Brigham and Women’s unit. Subsequently, in December 1997, Dana-Farber opened an expanded, state-of-the-art adult ambulatory treatment center.2 Twelve disease program areas were established3, 1Paths of Progress, DF/JF newsletter, Winter 1998. 2 1997 The Year in Review - DCFI Web site 3 The 12 disease centers were: endocrine, gastrointestinal, genitourinary cancer, head and neck cancer, hematologic malignancies, hematology, melanoma, neurologic cancer, sarcoma, thoracic, breast cancer, and gynecological cancers. This document is authorized for use only by Kristopher Durham in Capstone Experience B - Fall 2021 at Wake Forest University Medical School, 2021. The Dana-Farber Cancer Institute: Development Strategy 599-104 3 bringing together multidisciplinary teams from the three hospitals to collaborate in the care of adult patients with specific types of cancer, and to provide a more streamlined approach to clinical research and testing. Gary Countryman, Chairman of the Board of Trustees for Dana-Farber, remarked on the DF/PCC affiliation, Dana-Farber’s mission is to find a cure for cancer through basic and applied research. To conduct the research, our doctors need a population of patients to test their discoveries and treatments. In the current era of managed care, a small “research” hospital with about 50 beds is not economically viable. The venture with DF/PCC provides access to a significant patient pool for research economically, but we must remain true to our research mission and not become drawn too far into the hospital domain. We must constantly ask ourselves whether what we are doing relates to cancer research. If the answer isn’t yes, we are doing something wrong. The Institute researched and treated all forms of cancer. In some cases, disease centers had been partially funded through gifts and/or grants to address specific cancer research and care. These included the Gillette Center for Women’s Cancer, the Center for AIDS Research, and the Jimmy Fund Clinic (specifically devoted to the treatment of children). As of 1997, the Institute was staffed with approximately 1,600 people, including 634 doctors (MDs, PhDs) comprised of 189 faculty (MDs, PhDs) and 445 trainees, 236 outpatient and inpatient nurses (RNs), and 350 volunteers. As seen in Table A below, the Institute’s operating budget was funded through three primary sources: patient fees, research awards (the Dana-Farber ranked third among independent hospitals in the United States in the National Institute of Health grant awards), and earnings from endowment funds. Any shortfall was made up by the Development Office’s fundraising efforts. Table A Dana-Farber Financial Profile ($ thousands) Year-ended September 30 1998 1997 1996 Revenues: Research $93,800 $91,783 $83,447 Patient services, net 77,622 61,800 67,042 Jimmy