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Mary E. Malliaris Loyola University Chicago Maria Pappas Thorek Memorial Foundation, Chicago, IL

Revenue Generation in Hospital Foundations: Neural Network versus Regression Model Recommendations. Mary E. Malliaris Loyola University Chicago Maria Pappas Thorek Memorial Foundation, Chicago, IL. Problem.

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Mary E. Malliaris Loyola University Chicago Maria Pappas Thorek Memorial Foundation, Chicago, IL

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  1. Revenue Generation in Hospital Foundations: Neural Network versus Regression Model Recommendations Mary E. Malliaris Loyola University Chicago Maria Pappas Thorek Memorial Foundation, Chicago, IL

  2. Problem • How should a nonprofit foundation supporting a hospital allocate its resources in order to optimize income? • Will a regression model and a neural network model give the same recommendations?

  3. Foundation Structure • Personnel • board of directors, staff, professional fundraisers • Strategy followed to collect funds • fundraising, investing, or mixed • Types of events • memorial, athletic, party, giving • Spending Categories • the associated hospital, the community, charity care, and research/education

  4. Data • Form 990 from Guidestar.org for each foundation Variables: • Net Assets • Amount for Expenses • Number of Hospital Beds (an indicator of size) • Total Contributions • Area of Spending: Hospital, Charity, Community, Research/Education • Compensation: Board, Staff, Professional Fundraisers • Type of Events: Giving, Party, Athletic, Memorial Target Variable: Revenue

  5. FoundationsNumber per Region and by Size

  6. Models • Regression • Neural Network • 15 inputs • 1 hidden layer with 15 nodes • 1 output • Software: SPSS Predictive Analytics Software

  7. Models Accuracy Results

  8. Regression

  9. Neural Network

  10. Variable Importance Variable importance values in PASW are relative. The sum of the values for all input variables in each model is 1.0. Variable importance is not model accuracy. It compares the importance of each variable in making the prediction, not whether or not the prediction is correct. It is calculated by looking at how much the dependent variable changes when the lowest and highest values of the variable are fed through the model and all other variable values are held constant.

  11. Comparative Variable Importance

  12. Conclusions • Regression: • Focus on fundraising events with activities that directly raise money such as auctions and radiothons • Spend money first on the associated hospital • Neural Network: • Raise money through personal memorials or naming opportunities • Spend money on charity care

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