Upholding Donor Trust in Healthcare Philanthropy: Why Accountability Starts with the Small Things

Imagine a friend tells you they’re launching a business and plan to track millions of dollars in revenue and expenses using only Excel spreadsheets. No accounting software, no audit trail—just rows and columns. Would you trust their numbers? Would you invest?
 
Most of us would at least hesitate and probably walk away if they weren’t a friend. We instinctively understand that serious financial stewardship requires more than a spreadsheet. It demands systems, oversight, and accountability. And yet, in the world of healthcare philanthropy, some institutions still rely on informal processes to manage donor funds. The risks are operational and reputational.
 
In healthcare philanthropy, trust is the foundation of every donor relationship. A donor’s gift is more than a financial transaction—it’s a commitment to meaningful impact, a reflection of their values, and a powerful expression of trust in your mission. If that trust is broken, the consequences ripple far beyond a single transaction. They affect reputations, relationships, and the very mission of the institution.

The Cost of Broken Trust

When donor intent is not honored, the consequences can be both financial and reputational. In several high-profile cases, healthcare and nonprofit organizations have been forced to return or reallocate gifts due to miscommunication, shifting priorities, or lack of oversight. One notable example involved Integris Canadian Valley Hospital in Oklahoma, which was ordered to return a $500,000 donation from country singer Garth Brooks—and pay an additional $500,000 in damages—after failing to fulfill a naming agreement tied to the gift. Similarly, the American Red Cross faced public backlash and congressional scrutiny after it was revealed that a significant portion of its Liberty Fund, raised in response to the September 11 attacks, was redirected from victim support to general preparedness efforts.
 
These situations erode donor confidence and can take years to repair. When donor trust is broken, it doesn’t just affect one gift—it undermines future giving and the institution’s credibility.

Why Donor Dollars Matter More

Unlike revenue from patient care, which is often tied up in operating costs and regulatory constraints, philanthropic dollars are flexible. They fund innovation, expand access, and support underserved populations. These funds allow organizations to respond to urgent community needs, pilot preventative care programs, and invest in long-term solutions that traditional funding streams can’t support. In short, they make the impossible possible.

Consider these examples:

• A rural hospital uses donor funds to launch a mobile health clinic, bringing preventative screenings and chronic disease management to underserved areas
• A children’s hospital creates a donor-funded mental health initiative in local schools, addressing rising anxiety and depression
• A community health center can use donor funding to create an initiative that focuses on reducing heart disease among a specific at-risk population in their area  

That’s why every donor dollar must be treated with the care and respect it deserves. And that starts with transparency.

Sharing financial reports is a part of transparency, but it also means creating a clear, consistent, and accessible narrative around how funds are used and the impact they create. It involves:

• Tracking donor-restricted funds with precision
• Reporting outcomes in ways that are meaningful to donors
• Communicating proactively when priorities shift or challenges arise.

When donors can see the direct line between their gift and the outcomes it enabled, their trust deepens. Transparency transforms a transaction into a relationship and that relationship is the foundation of sustained philanthropic support.

The Invisible Fundraisers: Finance and Accountability

While finance professionals may not interact directly with donors, their role in the fundraising process is critical. They provide the data and transparency that allow frontline fundraisers to tell a compelling story. They ensure that when a donor asks, “What happened with my gift,” the answer is clear, accurate, and aligned with the donor’s intent.

Donor trust isn’t just a development issue. It’s a cross-functional responsibility.  When finance and development teams operate in silos, it creates gaps in communication, accountability, and ultimately, donor confidence. But when they collaborate, they build a unified narrative of impact. The organization must be committed to:

• Breaking down silos between finance and development teams.  Encourage regular communication, shared goals, and joint strategies.
• Investing in integrated systems that track donor-restricted funds with precision.  Replace spreadsheets and manual processes with platforms that offer transparency, audit trails, and real-time reporting.
• Empowering finance staff to understand the mission and impact of donor gifts.  When they see themselves as part of the stewardship journey, their work becomes more than numbers—it becomes storytelling.

Finance teams may be behind the scenes, but they are central to the story.  When they are equipped, engaged, and aligned with development, they become invisible fundraisers, quietly building the trust that fuels generosity.

Building a Culture of Accountability

A culture of trust isn’t built in boardrooms and then sent down the chain in a memo. It’s built through the everyday actions of staff at every level. Culture is bottom-up. It’s in the small acts of respect, the attention to detail, and the willingness to answer hard questions.
 
Can your team explain how a donor’s gift advanced the mission? Can they connect the dots between a line item in a budget and a life saved in the ER? If not, it’s time to revisit your culture.

A culture of accountability means:

• Knowing the numbers and trusting them
• Maintaining systems that track and report on donor funds with precision
• Empowering staff to speak confidently about how gifts are used
• Respecting the details, because the details are where trust lives

When accountability becomes part of the culture, staff feel more connected to the mission and more confident in their roles. They are stewards of impact, not just processing gifts or paying expenses. This clarity and alignment promotes employee engagement, reduces burnout, improves cross-team collaboration, and deepens donor engagement. In short, a culture of accountability doesn’t just protect trust-it energizes the entire organization.

Five Principles for Honoring Donor Intent

Donor trust hinges on making sure funds are used according to the donor’s wishes. Here are five principles for honoring donor intent so you can build trust.

1. Honor the Gift Agreement

Clearly define and document the purpose of the gift. Ensure all stakeholders understand the donor’s intent, agree it’s feasible, and have access to the agreement so they can track and manage the gift accordingly.

2. Prioritize Donor Stewardship

Build long-term relationships through regular updates, recognition, and meaningful engagement. Stewardship is not a one-time act—it’s an ongoing commitment.

3. Establish Internal Oversight

Create systems and structures to monitor how gifts are used. Regular audits and reviews help ensure alignment with donor intent.

4. Communicate Early and Often

Transparency is key. If institutional priorities shift, engage donors in the conversation early to explore solutions together.

5. Build a Culture of Accountability

Foster an organizational ethos where honoring donor intent is everyone’s responsibility, from leadership to frontline staff.

Trust Is the True Currency

Donors are more strategic and outcomes-driven than ever, so healthcare institutions must rise to meet the moment. Honoring donor intent isn’t just about compliance—it’s about integrity. It’s about showing that every dollar carries a dream, and every dream deserves to be realized.

Trust, once earned, must be protected. Because in healthcare philanthropy, the stakes are too high for anything less.

Learn how one finance and development at one healthcare organization partnered to strengthen their donor stewardship and increase their giving by $23 million.

Michael Reardon, Senior Principal Consultant for Customer Success Services at Blackbaud, contributed to this article.