As the Hazelden Betty Ford Foundation continues on its quest to expand access to substance use disorder (SUD) treatment, the nonprofit is leaning into relatively new growth strategies and fundraising tactics.
Specifically, it’s looking to pursue strategic deals and partnerships, while also taking a page out of private equity’s book by applying the PE model to the philanthropic fundraising world.
“It’s all about expanding access to care,” said Joseph Jaksha, vice president of Hazelden Betty Ford and publisher of Hazelden Publishing. “It’s going to take a lot of scaling to expand access, and we see growth as a mission mandate in a nonprofit, not just a nice idea.”
Jaksha made those comments during a recent American Health Law Association (AHLA) webinar put on by AHLA’s behavioral health task force and business law and governance practice group.
Hazelden Betty Ford was created in 2013 as the result of the merger between Hazelden Foundation and Betty Ford Center, two addiction treatment nonprofits with decades and decades of experience.
Today, the combined company bills itself as the nation’s largest nonprofit SUD treatment provider. It has 17 locations nationwide, treating adolescents and adults in both inpatient and outpatient settings. The foundation also has a graduate school of addiction studies, a publishing division, an advocacy arm and an addiction research center, as well as other additional programs and initiatives.
When it comes to growth, Hazelden Betty Ford generally follows three guiding principles, according to Jaksha, who is responsible for the nonprofit’s strategic growth planning and business development. Those principles include following the money, learning from competition and pursuing win-win partnerships, such as the one it recently formed with Emory University.
Hazelden Betty Ford announced the partnership back in September. Together with Emory Healthcare, the largest health care system in the Peach State, they teamed up to create the Addiction Alliance of Georgia. Georgia’s Department of Public Health is part of the project, too.
The goal of the creative arrangement, which looks more like a joint venture than a traditional partnership, is to bring SUD treatment and education to the state.
“That’s a whole new approach and way for us to expand, scale and grow geographically,” Jaksha said. “We aren’t putting a physical presence into Georgia with Hazelden Betty Ford. We’re collaborating with Emory to do that, along with bringing virtual care … into that partnership.”
Virtual care isn’t just a priority for Hazelden Betty Ford in Georgia. Amid the COVID-19 pandemic, Hazelden Betty Ford has accelerated its focus on virtual intensive outpatient programming (IOP), making it a priority to grow its virtual IOP nationwide.
“We’re aggressively expanding both in virtual care and helping other organizations deliver better care themselves, using the tools and capabilities that we’re developing within our own system,” Jaksha said.
Over the next few years, the goal is to roll out virtual services in all 50 states, he added. Currently, those are available in 10 states, with Hazelden Betty Ford planning to add three to five states before the end of the year and another 12 to 15 in 2021, Jaksha said.
On top of that, it’s also working on sharing its virtual expertise with other addiction treatment providers to advance the industry as a whole. To do that, Hazelden Betty Ford has launched Hazelden Professional Education Continuum Solutions (PECS), which is a training and education service.
“It’s really a training and consultation service,” Jaksha said.
While the pandemic has ramped up Hazelden Betty Ford’s virtual initiatives, it has slowed down other growth initiatives, such as strategic mergers and acquisitions, which have become increasingly important to the nonprofit in recent years.
“Financial realities of the pandemic have had us go slower on some things than we had planned,” Jaksha said. “But we’re really moving into … a more proactive M&A pipeline that is very strategic and aligned with our growth goals and objectives.”
That’s different than some of the M&A Hazelden Betty Ford has done in the past. Historically, much of the organization’s growth has been reactive, Jaksha said. For example, struggling organizations might have come to Hazelden Betty Ford for help, with deals functioning as a life preserver.
Meanwhile, the merger that created Hazelden Betty Ford itself was more of a strategic transaction designed to achieve national scale and scope. The company plans to be similarly mindful about dealmaking going forward.
“What are some gaps that we need to fill in order for us to support those strategic objectives?” Jaksha said. “And how can we do that through acquisition?”
Finally, Hazelden Betty Ford has retooled the way it thinks about fundraising, also looking at it now through more of a strategic growth lens. These days, it’s prioritizing entrepreneurial philanthropy, which involves taking the private equity-venture capital model and applying it to the philanthropic fundraising world, Jaksha said.
That means, for example, creating donor case statements that look like round one investor pitch decks, which includes a value proposition for philanthropists.
“Help us bridge three to five years of startup funding in a new initiative, and we will show and we will demonstrate a breakeven, a positive ROI and a self-sustaining model in years three, four, five, six and beyond,” Jaksha said, illustrating some of the details illustrated in such a pitch.
Jaksha said the new model has “really resonated” and helped Hazelden Betty Ford find the capital it needs for initiatives such as growth.
“So it’s a really interesting model for us, and I think it’s going to really carry us a long way into the future,” he said.
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