By Sabriya Rice
The Dallas Morning News
DALLAS — The Dallas-based nonprofit American Heart Association is seeking to spin off a business that trains health care providers on best practices in cardiopulmonary resuscitation and other life-saving techniques.
The charity organization launched a project in 2015 called the Resuscitation Quality Improvement program, which goes into hospitals and gives medical professionals hands-on training at the site of care.
The group now says it has entered a partnership agreement with a for-profit called Laerdal Medical Alliance, a Norwegian company that makes training products like simulators, manikins, and anatomical models. They plan to spin the program into a separate limited liability corporation called RQI Partners.
The move is “truly significant’ in that it is “positioning us to take innovation, patient impact and achieving our mission to help save more lives to greater heights,” said the heart group’s chief of mission aligned businesses, John Meiners, and Laerdal’s chief executive, Tore Laerdal in a recent joint letter to staff. The two organizations have been collaborating since 2005 on various projects.
A new leadership and senior management team will begin July 2, the memo said. A spokesman for the heart group described it as an effort to do “cost recovery” for CPR training that has existed for years on a fee-for-service basis, and give the nonprofit the ability to scale.
“This endeavor is about being able to recover the cost of the training and being able to make investments in the future,” said corporate communications senior vice president, Greg Donaldson.
“We as a nonprofit can’t scale to the degree that a private entity can. By joining forces and creating a third-party enterprise, we’ll be able to accelerate training and reach, and accelerate lives saved,” he said.
With $670 million in private donations received in fiscal 2017, the American Heart Association placed 18th on a Forbes list of the largest U.S. charities, a rung that was two places higher than the previous year.
Joint ventures between charities and for-profit entities are not uncommon, industry experts say.
But they must be careful. Nonprofits that create a hybrid model for a business that is unrelated to their tax-exempt mission could threaten their nonprofit status, said Sara Nason, a spokeswoman for Charity Navigator, which rates nonprofits based on how well they use their money.
Well-governed nonprofits are increasingly creative and open minded about the ways that they can best take their mission forward, says John MacIntosh, a partner with New York City-based Sea Change partners, a nonprofit investment firm that helps other charities with transactions like mergers, acquisitions and real estate investments.
“In something like healthcare, you do need access to capital, and you do need access to distribution, and so it’s not surprising that we seem to be seeing more joint ventures, partnerships and collaborations between for-profit and non-profit,” MacIntosh said.
“Sometimes it’s to make money,” he said. A recent report co-authored by Sea Change analysts found that about half of the nation’s charities are in financial distress, with more liabilities than assets and limited cash on reserve. But that’s not always the reason.
“More often it’s because it takes their mission forward in a better way,” MacIntosh said.
The AHA, which earned more than $805 million in total revenue in 2017, was given a score of 91.3 out of 100 by Charity Navigator, in terms of its accountability to donors, transparency and financial efficiency.
The American Heart Association said the new venture is aligned with its mission, and that partnering to expand the training program’s footprint can have an “extraordinary impact” for those who provide emergency medical services.
Since it began offering the resuscitation quality program quarterly three years ago, the American Heart Association says more than 400 U.S. hospitals have participated, and more than 300,000 medical professionals have been trained.
But the AHA said revenue isn’t the biggest factor driving commercialization. More than 200,000 cardiac arrests occur in U.S. hospitals annually, and less than 24 percent of those patients survive, the association estimates.
“For us this about accelerating the impact of lives saved,” Donaldson said. “We believe we can save 50,000 lives annually from needless, preventable cardiac arrest more quickly.”
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