Providing help to children in need through

pediatric care, education and community

involvement

By: Hallie Wachowiak

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The Shriners Hospital for Children (SHC) is a non-profit health care system started by
Shriners International. For this report I have reviewed the “2018-2019 Annual Report” and
the “Combined Financial Statements” report dated December 31, 2018. The “Combined
Financial Statements” report was audited by KPMG. I was unable to locate the standards
the SHC adheres to in their reports. The SHC is governed by a board of directors.

Purpose

In this report I analyze how the Shriners Hospital for Children discusses its relationship with
the community, creates value, and its different resources.

The Company

The Shriners Hospital for Children was established in 1922 in Shreveport, Louisiana by
Shriners International. Their goal at that time was to help children in need who had been
affected by the polio epidemic. Since then, they have established twenty-one hospitals all
over the United States, one hospital in Mexico, and have treated over 1.4 million children.
According to their annual report, “Shriners Hospital for Children is a health care system
dedicated to improving the lives of children by providing pediatric specialty care, conducting
innovative research, and offering outstanding educational programs for medical
professionals” (Annual Report, 2019, pg. 1). I believe that SHC falls under two different
types of industry: Health Care & Social Assistance and Other Services. They are a Health
Care & Social Assistance industry because they are hospitals that provide care for patients.
But they are also an Other Services industry because they are a philanthropic organization
dedicated to helping others.

Value Creation

The Shriners Hospital for Children works to help children who have different types of
medical problems, such as orthopedics, spina bifida, burns, and cleft lips or palates, just to
name a few. They help these children by not only providing medical care, but also continue
to work on procedures and treatments to help children in new and innovative ways. They
want these children to have as normal of a life as they can. To help with this they offer
schooling for kids so they don’t fall behind, give them toys they can play with, and provide a
safe space for them to be themselves.
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The SHC also continues to make breakthroughs in treatments and technology to help their
patients. They find new and inventive ways to treat different medical problems such as
ReCell® which “is a method of harvesting epidermal cells to spray on wounds” from burns
and “fusionless treatment options for patients with scoliosis” (Annual Report, 2019, pgs. 42-
43). They are also responsible for creating and providing prosthetic and orthotic devices for
their patients. In 2018 alone they “provided 46,480 orthotic and 2,519 prosthetic devices” to
patients (Annual Report, 2019, pg. 44).

According to their Annual Report, in 2018, the SHC held 317 outreach clinics in the United
States, Canada, Mexico, and other countries including Panama and Cyprus. They also
created clinics in places such as the Philippines, Bolivia, and Guatemala. These clinics
helped over 10,00 patients (pgs. 40-41). These clinics also help doctors determine if
children need to be brought to one of the main hospitals for treatment, and if they do, the
Shriners will cover the cost of transportation. This shows the families and their communities
that the Shriners Hospital for Children are willing to do what they can to get them the help
they need.

Resources

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The Shriners Hospital for Children uses many different types of resources. These
resources will be discussed below.

Financial Capital: When looking over the Combined Financial Statements for the
Shriners Hospital for Children they talk a lot about investment income and donor income. It
looks like the financial statement is a single year metrics, but it includes two different
columns, “with donor restrictions” and “without donor restrictions.” The funds without
restrictions are available for use right away, while the funds with restrictions “are not
available until future periods or are donor restricted for specific purposes” (KPMG LLP,
2018 pg. 7). Most of their income comes from investments and donations. In 2018 1.1
million people donated over $356 million dollars (Annual Report, 2019, pg. 71).

Manufactured Capital: In their annual report the Shriners Hospital for Children
discusses their 22 different hospitals throughout the United States and Mexico. Their
financial statements also mention that they currently have 3 hospitals that they have up for
sale due to the creation of newer hospitals in these locations. They also have construction
and major capital projects in the works (KPMG LLP, 2018 pgs. 14-15).

Natural Capital: While looking through both their Annual Report and their Combined
Financial Statements I was unable to locate any information regarding natural capital. The
only type of environment they talk about is how the hospital is a family centered and caring
environment.

Human Capital: One of the greatest resources the Shriners Hospital for Children
has is its human capital. This is made up of their 10,000+ employees such as doctors,
nurses, and hospital staff. According to the Encyclopedia Britannica human capital “include
all the knowledge, talents, skills, abilities,
experience, intelligence, training, judgment, and
wisdom possessed individually and collectively”
by employees (Huff, R. 2013).

The doctors at the SHC bring their knowledge

and training to the hospital to help treat the
patients. They may know how to fix the problem
right away, or they may do research to find a way to help. They create new and inventive
ways to help their patients. Nurses bring their training and compassion to their patients.
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According to their Annual Report when surveyed “patients report 95% satisfaction for
overall inpatient and ambulatory surgical nursing care” (Annual Report, 2019, pg. 55). The
hospital staff is made up of people doing various jobs, such as office work, janitorial duties,
and public relations. The people in the offices are
responsible for keeping paperwork organized,
scheduling appointments, making transportation
arrangements, and dealing with the public, just to
name a few. It is important for these people to be
organized so the patients aren’t inconvenienced or
sent to the wrong place. The janitorial staff is very
important because many of the patients that are at the hospital need to be in a clean
environment, especially the burn patients. The medical instruments need to be clean and
sanitized, as do the different pieces of equipment used. The public relations staff is
responsible for raising awareness for the hospital, which in turn will help raise funds for the
hospital. These people have to bring their knowledge of how to deal with people and how to
reach out to garner support.

Another form of human capital that the SHC has is the donor relations staff. “They create,
strengthen and sustain lasting relationships” with donors in order to help the SHC reach
every patient in need (Annual Report, 2019, pg. 71). This staff brings their knowledge, time,
and determination to the hospital.

Another human resource the SHC has are the members of Shriners International, or
Shriners. They spend their time raising funds and awareness for the hospital. Shriners sit
on the Board of Directors and the Board of Trustees, and they also volunteer their time to
transport children who need to be brought to the hospitals.

Relationship Capital: Another important capital for the Shriners Hospital for
Children is relationship capital. One of the most important relationship the hospital has is
with its patients. The SHC works to make their patients feel safe and cared for. Their goal
to help children lead long and healthy lives, and they do this by forming relationships with
their patients by treating them like family.

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Another relationship they have is with their donors. Donors are a major asset in funding the
SHC. Just last year donors gave over $356 million dollars for the SHC. Donors also give of
their time to the SHC. They do this through holding fundraisers, participating in events such
as the East-West Shrine Football Game, and volunteering at local hospitals.

The employees that work for the SHC are an important relationship. Some of them treat
and care for the children like doctors and nurses. Others make sure the business side of
the hospital is running smoothly such as office workers and janitorial staff. The doctors
diagnose the patients and come up with and administer treatments for them. The nurses
help the doctors, interact with the patients, administer treatments, and provide
compassionate care to patients and their parents. The office workers build relationships
with patients by contacting them to schedule appointments and discuss options. While the
janitorial staff makes sure the hospital is well taken care of and prepared for the patients.

Symbolic Capital: Because the Shriners Hospital for Children is a hospital, they are
constantly working on making treatments and processes better and more efficient. Doctors
and nurses work to create new ways to treat things like burns, cleft palates or lips, or spinal
cord injuries. Because of their hard work, “many surgeries and treatments are less invasive
and can be done on an outpatient or same-day basis” (Annual Report, 2019, pg. 33). These
new ways of treating patients is passed on to other hospitals so their patients can benefit
from the shared information.

These new treatments can also lead to new technology designed and created by members
of the SHC staff, which also lead to new patents held by the company. This new technology
can help the doctors figure out how to help the patients more effectively and efficiently. One
example of new technology is their clinical motion analysis.

In simple terms, motion analysis brings the animation techniques used in Hollywood
to the clinical and research setting. In our analysis centers, high-speed cameras,
reflective markers, force platforms, and muscle sensors record, measure, and
evaluate how a child with a mobility impairment actually moves. (Annual Report,
2019, pgs. 58-59)

The SHC is constantly funding projects, whether that’s for research or testing. Their goal is
to help improve children’s lives.

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Another form of symbolic capital that the Shriners Hospital for Children has is their
reputation. The SHC is known all over the world for their advancements in the treatments of
spinal cord injuries, burns, and orthopedic conditions, just to name a few. Their reputation
is important because how they are seen by the public is what will determine how much will
be donated to their organization from the public.

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 Structural Capital: The Shriners Hospital for
Children is governed by a Board of Directors. This
board is made up of members of Shriners
International fraternal organization. The board
oversees the SHC as an organization, while each
hospital is overseen by a separate board of
directors, hospital administrator, chiefs of staff, and
directors. There is a clear chain of command that helps make things run smoother. And the
board of directors at both levels changes members, so new ideas and governing styles are
implemented.

Stakeholder & Accountability

The Shriners Hospital for Children partners with many different people to create value. It
partners with Shriners International to raise money for and awareness of the hospitals. It
also partners with its employees to help those children in need. And it partners with its
community to show what the SHC does and to help raise funds for the hospital.

The Shriners Hospital for Children is also accountable to different groups of people, who in-
turn create value for the SHC. The main groups of people they are accountable to are
patients, employees, the public, and their stakeholders.

Their patients hold the SHC accountable for the following:

 Fundraising to help fund services they are provided

 Research to help find a solution to their medical problems
 Advancements in medical process
 An environment to help the patient feel safe while going through
a difficult time
 Compassion for the patients for what they are going through

In giving the patients what they need, the patients help create value for the SHC by
getting information out to the public about how the hospital has helped them. They
may also want to help give back to the hospital by donating their money or their time
in the future.
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Their employees hold the SHC accountable for the following:
 Financing to help fund research, order supplies needed, and
pay for upkeep on hospitals
 Providing a safe place for their patients and the patients families
 Researching to find solutions to patients’ medical problems
 Education and training to help them be better employees and
caregivers
 Work in a safe environment

In giving their employees what they need, their employees help create value by
continuing to help their patients, whether that’s through treatments, research, or just
sitting and listening to them. They help create an environment that people want to be
a part of either through donations of time or money, or even getting a job there. They
also help create value by discovering new treatments, techniques, or equipment that
can be used in any hospital to treat patients.

The public holds the SHC accountable for the following:

 Advancements in research that are provided to other medical

institutions
 Fundraising to help their communities
 Helping those less fortunate

By giving the public what they need, the public helps create value by donating to the
hospital, whether that’s giving money or volunteering their time. The public also
helps get the name Shriners Hospital for Children out there for others to see and
hear. One person telling another person could help save a child’s life.

And lastly the stakeholders hold the SHC accountable for the following:

 Provide services to children in need

 Raise money to provide medical services and keep hospitals up
to date with the most current equipment and drugs
 Hire employees to make advancements in research such as
procedures, drugs, and equipment

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  Building social capital in the communities so more people will
support their organization
 Build more hospitals and clinics all over the world to help others

By giving the stakeholders what they need, the stakeholders help

create value by keeping the SHC running and funded. The
stakeholders also help to raise funds and get the Shriners
Hospital for Children name out to the public.

Risk and Externalities

One of the main things the Shriners Hospital for Children’s annual report talks about is
fundraising. Yes, they have funds that come in outside of fundraising, but should people
stop giving donations the hospitals risk losing funding for their research projects,
employees, and supplies.

Another risk they face is their investments. Investments are tricky things. Their amounts
can go up, or they can come crashing down. According to their Combined Financial
Statements they have short-term investments and long-term investments. Both of these
assets fluctuate yearly. Should the stock market crash, they could lose millions of dollars.

Many businesses are founded on reputation and should the SHC’s reputation become
tarnished they could lose patients, donors, investors, and credibility with the public. When
you earn a bad reputation, it is hard to gain back the trust of the public, especially when you
work with children.

One of the biggest risks the Shriners Hospital for Children takes is treating patients. They
have state-of-the-art technology and access to the newest treatments, but sometimes a
patient just can’t be helped. This can cause low morale in the workplace and even negative
comments to the public. Low workplace morale can be one of the worst things to happen to
a workplace.

Most of these risks can be neutralized by being open with your stakeholder, patients,
employees, and the public.

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Recommendations
The Shriners Hospital for Children is an amazing organization whose main goal is to help
children. Currently you see commercials on television giving you information on what the
SHC does and how you can donate. This is a great way to reach potential patients and
donors. But there are still people out there who are skeptical of the Shriners because they
have Masonic affiliation. Ways for the SHC to improve its transparency include being open
and honest with the public. Letting them know that yes, the Shriners may be affiliated with
the Masons, but that they are a totally different organization. Also show that you treat
children from all walks of life. Try creating ambassadors from your former patients. When
children see other kids who look like them, whether that’s because of their race or their
medical condition, they are more willing to want to go there and get help.

The SHC can strengthen its relationships with stakeholders by continuing to raise money
for its patients, funding research and development, and building its reputation in the
community. By doing these things they will create value for their company. And by creating
value for their company, they strengthen their relationship with their shareholders, and
continue to make the SHC a success.

The different relationships that the SHC creates would be a good capital to discuss more.
How we connect with other people, whether that’s doctors, nurses, patients, Shriners, or
volunteers is important to us as humans. People want to know that they are being cared
for, especially children, so this would be a good relationship to include more of in the future.
Another capital that should be discussed more is the manufactured capital. There are 22
different hospitals with state-of-the-art technology. Giving an inside view of the hospitals
would let people know what is being designed and created to help patients.

While going through their Annual Report I was unable to locate any mention of natural
capital. In this day and age environmental sustainability is an important factor when it
comes to who people donate to, or who companies invest in. Our planet is suffering from
climate change, so to show that your company isn’t damaging the earth but helping it can
go a long way in creating value.

The Annual Report showed that much of the Shriners Hospital for Children is connected.
The main focus of the SHC is helping their patients. Everything splits off from there. The
Shriners International continuously raise funds for the SHC. The doctors and nurses

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continue to make breakthroughs in techniques and caregiving which will in turn help their
patients. Donors want to get patients the help they need so they donate their money and
time.

The Shriners Hospital for Children is an organization intent on helping children get the help
they need. It is also an organization that people don’t know much about. Integrated
Reporting could help the SHC show people what they do. Many people don’t know that the
SHC has helped create new techniques and technology that have been shared with other
hospitals outside of the SHC network. People may also not know that there are 22 state-of-
the-art hospitals in the United States and Mexico ready to help children. Creating an
Integrated Report could put all of this information into one place for people to see and
understand what kind of organization the Shriners Hospital for Children is. By doing this
they can reach more children in need.

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References
Shriners Hospital for Children. Annual Report 2018-2019, 2019. Web.
http://flipbook.shrinersvillage.com/2019AnnualReport/html/files/assets/common/downloads/
2019AnnualReport.pdf?uni=4c26ccf18f7cc5a0f75766072a6cd604

KPMG LLP. Shriners Hospital for Children Combined Financial Statements, 2018. Web.
https://lovetotherescue.org/wp-content/uploads/2019/06/2018-combined-financial-
statement.pdf

Huff, Richard. Human Capital, Encyclopedia Britannica, 2013. Web.

https://www.britannica.com/topic/human-capital

Serat, Julia. Becoming Independent (Online Photo). Shriners Hospital for Children – Annual
Report 2018-2019, 2019. Web.
http://flipbook.shrinersvillage.com/2019AnnualReport/html/files/assets/common/downloads/
2019AnnualReport.pdf?uni=4c26ccf18f7cc5a0f75766072a6cd604

All photos courtesy of the Shriners Hospital for Children Annual Report 2018-2019.
http://flipbook.shrinersvillage.com/2019AnnualReport/html/files/assets/common/downloads/
2019AnnualReport.pdf?uni=4c26ccf18f7cc5a0f75766072a6cd604

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