For the past five years, St. Jude Children's Research Hospital has seen double-digit growth in its funding, most of which comes from public donations. In 2008, for example, financial support for St. Jude grew by 12 percent.
One year and a recession later, funding to the internationally acclaimed hospital is still up, but it has slowed to just over 3 percent. Because of the drop, St. Jude has slowed hiring and is trimming costs.
"Like every company, and as an organization that spends money people donate, it behooves us to tighten our belts," says David McKee, COO and interim CEO of ALSAC, the fund-raising arm of St. Jude.
Of St. Jude's almost $507 million operating budget, 71 percent comes from public donations. For the past three years, about 84 cents of each dollar donated goes to research treatments. The daily cost to run the hospital is $1.4 million.
"We have been through hard times before," McKee says. "We invest in programs that add donors to our files. When things turn around, we will be in a stronger position."
Despite McKee's optimism, the hospital's current plans include cutting hiring and travel and placing a hold on building projects.
Mary Anna Quinn, senior vice president of human resources, says the hospital is not under a hiring freeze, but hiring has slowed.
"We're not growing quite as fast as we have in the past," Quinn says. "In spite of the economy, we still want to maintain the high-quality employees we have."
One cost-cutting move was to outsource work in the hospital's warehouse, a change Quinn says won't affect patient care.
"[St. Jude] wanted to do the right thing for our donors, employees, and patients when it came to the budget cuts," Quinn says.