Venture Philanthropy can Transform Healthcare
August 25, 2025
This was written in partnership with Dan Harrington, Chairman of the Veale Foundation based in Cleveland, Ohio.
Philanthropy plays a critical role in healthcare. However, too many philanthropists think the job is done when their check gets cashed and they cut the ribbon for a new hospital.
More than ever, philanthropists are funneling money toward charitable causes without any clear indication that it’s actually providing value to the people it’s meant to help. To be effective, we need a system in place that ensures steady returns for patients and philanthropists.
We’re here to make that vision clear. Working with the Veale Foundation, a charitable foundation in operation for 50-plus years, we have built a system of “venture philanthropy” for medicine that enables hospitals and philanthropists to ensure their projects take root where they matter.
At a time when nearly 40 percent of healthcare systems report negative operating margins and challenges in federal research funding, venture philanthropy is the best path forward.
In 2023, the Veale Foundation provided an initial gift of $10 million to run up to 10 pilots over the course of two years. In negotiating the gift, both parties agreed to focus on value. In fact, we said at the outset of this project, “If I give you $10 million, and you spend $10 million without a return, I did not create value. I should have left the money in the bank.”
Our job was to realize that value by converting the $10 million to return $156 million in cumulative value at five years. At six quarters, we promised to deliver $16 million, and we delivered $44 million.
As a result, the Veale Foundation added $11 million and created the Veale Healthcare Transformation Institute. The goals are to identify urgent problems, rapidly test solutions to improve the quality of care, ensure it is widely available and make it more affordable.
In practice, that means prioritizing hundreds of opportunities across the healthcare industry and working with external partners to find viable solutions. We needed to deploy the solution with a specific set of metrics in mind to help the most patients and deliver the most value. Using this methodology has cut months or years off the typical path from a problem in healthcare to a positive statistic.
We have applied this approach to medically necessary situations, most recently for surgical patients at University Hospitals Cleveland. Using standardized protocols, the length of stay among surgical patients was reduced from six days to two. We were able to hit this goal by setting clear metrics for returns on our initial philanthropic investment in the hospital, while meeting with the University Hospitals Cleveland team and the Veale Foundation regularly to stay on track.
Our efforts also include large-scale innovation. For example, we have deployed one of the most extensive inpatient remote caregiving systems of its kind. It serves four hospitals to address our overburdened caregivers while reducing key metrics like falls, pain assessments and cost per discharge.
The savings so far are staggering. While the aim was to deliver $16 million in attributable savings or new value in a year and a half, the initiative produced $44 million, nearly triple that target.
Many donors would like to see their investment add quantitative value to the world, but not all can measure its effect. Some donors may lack the means to monitor performance, while others may not have the infrastructure to develop an accurate accounting of benefits. However, larger foundations that do have this capability could offer that as a service to other donors, like a lead investor in a venture fund. With this approach, a larger pool of dollars can return even greater value.
Healthcare in America harms too often, costs too much, and learns and improves too slowly. Philanthropy can help change this. If even a fraction of the $100 billion given annually to venture philanthropy were focused on measurable improvements in value, U.S. healthcare would be in a much better situation. A close comparison would be the Defense Advanced Research Projects Agency. Its budget is $4 billion and is widely credited with transformative inventions like the internet and GPS.
By applying the venture philanthropy framework to our funding relationships, we have accelerated our journey to improve value and achieve our financial performance targets. If deployed wisely, private philanthropy can become the DARPA of healthcare.
Tags: Philanthropy