Formulate and evaluate a business plan for healthcare organizations. (PO 4) As with any business there is a risk that certain pledged resources may not be available as projected.

Formulate and evaluate a business plan for healthcare organizations. (PO 4)
As with any business there is a risk that certain pledged resources may not be available as projected.

Sources of financing for SLMC have changed over time. Historically many donors provided financial assistance to the organization.
Sources of financing for SLMC have changed over time. Historically many donors provided financial assistance to the organization. Discuss concerns Debbie may have in preparing her annual budget if your organization has historically been funded by philanthropy.
Long-Term Financing in Healthcare
As we begin this weeks lesson it is important for the nurse leader to have an understanding of how financial risk relates to the long-term financing for a healthcare organization. Last week provided a brief introduction to pro formas and their role to assist in the budgeting process. Understanding aspects of long-term financing in healthcare can assist nurse leaders in the financial management of their responsible budget and the overall organization budget.
For a healthcare organization to thrive and be competitive maintenance of equipment and facilities must be considered as part of the budget process. In addition new equipment will need to be purchased and expanded facilities may also be part of the short- or long-term plan for a healthcare organization to ensure their future financial viability. With these required current and future requirements the long-term financing for the healthcare organization must be considered and a plan should be in place to ensure that the needed resources are available to pay for needed expenditures. Nurse leaders should be involved in the decision making for specific long-term financing.
Long-term financing is a source of money available to the organization that can be used for longer than 1 year (Finkler Jones & Kovner 2013). The major sources of long-term debt include: mortgages leases bonds and long-term notes. Sources of equity financing for healthcare organizations include philanthropy grants stocks and retained earnings. Philanthropy refers to gifts or donations provided to the organization (Finkler Jones & Kovner 2013). Gifts may range from small to large amounts. In some cases philanthropic departments can secure millions of needed funding dollars for an organization.
Historically government grants were a financing option for healthcare organizations. However many healthcare organizations do not consider this a viable financing option. In 2009 the American Recovery and Reinvestment Act provided some funding to healthcare organizations to assist with the needed health-information expansion (Finkler Jones & Kovner 2013).
Some healthcare organizations also employ a specific grant writer or a grant-writing department to focus on securing grant funding from a variety of sources. The organization and the grant department may target certain funding opportunities or sources for a specific expansion project a new service line a research study or to assist with creative nurse recruitment and retention efforts. This is not considered a stable and secure funding source by the organization.
Another option for long-term financing of healthcare organizations is the issuance of corporate stocks. The issuance of corporate stocks is generally available to for-profit organizations rather than nonprofit organizations due to the financial risk. When company stock is issued a benefit to the stock owners is that they can receive dividends or a distribution of profits. Many for-profit organizations have a mixture of stocks and debt as some of the payments for financing can become tax deductible which lowers the payment of taxes to the government (Finkler Jones & Kovner 2013).
Retained earnings are another source of financing for healthcare organizations and are a critical factor for the long-term survival of a healthcare organization. In retained earnings the profit a healthcare organization makes each year is paid to the owners in a dividend or retained in the company (Finkler Jones & Kovner 2013). The money retained can be used to finance the organization where it is deemed necessary.

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