Fund Development Decision Tree

Please refer to Fund Development Toolkit Tool #1 where it displays decision tree for Fund Development. The decision tree helps think through the process of getting started with an idea (new service line) and evaluate your funding options and opportunities. Notice that every funding model is going to be different based on specific needs and resources available in the community. For best practice, pursue those opportunities that have the greatest likelihood of success.

  • Earned income– Earned income is revenue income from traditional pharmacy services such as prescription, MTM service, and consulting services. Any revenue generated by services served is earned income.
  • Subscriptions– Subscriptions are a subset of earned income. This is a program where patients pay monthly subscription fee and enables the pharmacy to provide any medication in which the patient qualifies. This is a rare model for pharmacies because most work with pharmacy benefit managers (PBMs) or Medicaid/Medicare insurance. With this new model, pharmacies don’t accept insurance and do not operate under a PBM. The pharmacy develops their own model that is very non-traditional. Nevertheless, subscription program allows your pharmacy to generate steady cash flow and increase the value of your pharmacy.
  • Retail– Retail is any revenue generated by filling medications.
  • Public & State Funding– Public and state funding are very important areas. It’s now becoming more relevant. An example of public funding is to operate the pharmacy by getting medications donated from other health care system such as long-term care pharmacy. State funding involves working with your state legislator to operate drug donation program. For some pharmacies, the drug donation program generates the highest revenue and is what keeps the organization sustained. Many charitable pharmacies may not get contracts to operate this program but it’s possible through advocacy. Building relationships and communicating the importance of the program to the community with the lawmakers help advocate your cause. Start with the state legislator that is connected to pharmacy or safety net health services; find an advocate for your cause/program and they can go to other members of government and share that story. You can bring in other community leaders such as local hospital CEOs and free clinic administrator as your advocates. When the legislators see the need for charitable pharmacy, it puts pressure on them to try to come up with a way to make it happen. (See: Stakeholders and Fundersand How Much Did We Do or How Many?)
  • Foundations– Foundations are a type of funding available from other organizations. This allows for your pharmacy to use funding from different areas as a match from other organizations. Visit Foundation Centerto search and apply for foundation organizations. For more information go to Fund Development ToolkitTool #2, to learn how to find and cultivate foundation investment.
  • Hospitals– Hospital funding applies to charitable pharmacies that are part of large health systems. The large health system can see the value of providing free or low-cost access to medication to their patients. If their patient is not able to take medication, their condition could exacerbate resulting in a readmission to the hospital. Therefore, hospitals that have charitable pharmacies help reduce the hospital cost. In many cases, hospitals have revenue streams that are required to be invested in charitable pharmacy. Additionally, revenue generated from 340B program are reinvested into safety net program.
  • Grants– Grants are typically funded by foundations. The challenge is finding a grant that is a good fit for the charitable pharmacy. A great way to find funding is through the federal grants website www.grants.gov. Refer to Fund Development ToolkitTool #4 and Grants and Fundersto find websites and resources for grant funding. In many instances, it’s not about finding a grant that already exists, but you can present the idea to an organization and they can turn around and present your pharmacy a grant to invest in the program. When presenting your idea to potential investors, make sure to include the return on investment advantage that shows the financial impact of the work. Please refer to Fund Development ToolkitTool #5 for more information. Obtaining grants also depends on advocacy and building relationships within your community. As an example, the Iowa Safety Net Pharmacy noticed a need for a mental health program for inmates in their community. Many inmates do not have access to medical care and their medications upon leaving jail, thus their conditions deteriorate and may result in further incarceration. Iowa Safety Net Pharmacy reached out to their local government official to present the idea which landed them a grant to start the program. They now offer a corrections program that provides immediate primary care services and up to 90 days of behavioral health prescription drug coverage for transitioning offenders released from the county jail (See: Incarceration).
  • Fees/Waivers– A waiver is a type of voucher program. Different pharmacies operate waivers differently. For instance, the Iowa Safety Net Pharmacy provides uninsured patients with a voucher for the patient can then take it to a pharmacy and have a prescription filled. The pharmacy submits the voucher and get reimbursed for the medication they gave.
  • Contract work– Contract work is another opportunity to work with the community to help replicate similar programs. For instance, these could include offering consulting services. Contract work is utilizing the expertise from the leaders that are part of the charitable pharmacy.
  • Partnerships– Forming partnerships is one of the most critical avenues of funding and advocacy. Partnership is a way of creating relationships with other like-minded organization such as the local health system, or community health clinic to provide services (See: Top 10 Ways to Grow Your Charity Pharmacy Volume). This can be a contract service. For instance, there is a Dispensary of Hope pharmacy in Iowa that was contracted by their local pharmacy association to dispose of drugs and they get paid for the service (See: Final Incineration).
  • Technical School– This is a type of funding that utilizes workforce training initiatives. Knowing that there is tremendous shortage of certified pharmacy technicians, and tuition being expensive for employees, some charitable pharmacies create their own pharmacy technician program to generate revenue. Your charitable pharmacy can develop a platform where a pharmacy technician certification program can be provided via online resources in combination with experiential hours in the pharmacy.