He was hired as president and CEO of a foundation to raise funds to build a new hospital in Indianapolis to replace an existing one — a public facility that never had a major fundraising drive in its more than 150-year history.
Previously known as City Hospital and Indianapolis General Hospital, the public entity had been renamed Wishard Memorial Hospital in 1975. The last time there was new construction there was in 1914. So Vargo was tilling new soil, and he went ahead with his efforts to survey the situation.
“We were talking to a lot of people, and we were not on their priority list,” Vargo says. “There were so many groups ahead of us. People were already involved with some really good causes for a number of years. We did not have that long-term base of support.”
Undeterred, Vargo developed a strategy to get the buy-in from his target groups. He focused on going out into the community, to educate and inform citizens about the great things happening at Wishard Hospital, which served the most vulnerable people in the community.
His most successful visits were with Sidney and Lois Eskenazi, who owned Sandor Development Co. and who donated one of the largest gifts ever made to a public hospital in the United States — $40 million — and Fifth Third Bank, which donated $5 million.
In honor of the Eskenazis’ gift, the foundation was renamed the Eskenazi Health Foundation, and the new hospital will be the Sidney and Lois Eskenazi Hospital when it opens in December.
Having grown up on the South Side of Indianapolis where the hospital is located, the Eskenazis wanted to give back to the community in a way that would impact many people.
The fundraising efforts didn’t stop there. Vargo gave tours of the current facility just to familiarize potential donors with the hospital — and he knew he was getting the buy-in when long-time area residents were admitting, “I never knew that! I never knew!”
Here’s how Vargo achieves buy-in by staying in focus to his mission.
Concentrate, focus and deliver
When it comes to getting people to donate to a cause, it’s not that different from getting employees to buy in to a new corporate vision statement. The main premise is to focus on the mission.
A hospital’s mission is to advocate, care and serve — those are its core values. By keeping those core values in focus, Vargo believed he could engage his staff who would then engage people. That meant crafting a sales pitch that would be consistent with the mission.
“Be very thoughtful in your approach,” he says. “We don’t ask people for money the first time they come here. But we are trying to engage them so that they feel good about a gift and hopefully, that results in bigger gifts for us.”
The sense of making a contribution to a team, even an emotional feeling of belonging to a worthy effort, is as important as an employee who has been newly empowered with new responsibilities at his company.
Vargo also stresses that his team is in many ways a collection of networks. As many company leaders find early adopters among employees, Vargo found early contributors. These are thought leaders, and their enthusiasm is an invaluable asset to engage others.
“All of those folks on our board of directors and our campaign cabinet were all early contributors,” he says. “So they also had credibility when they were calling on people because not only have they volunteered to give their time to do fundraising but they have already made a sacrificial gift.”
Vargo says the Eskenazi gift never would have come into being if the board chairman hadn’t personally known Sidney and Lois Eskenazi. The chairman had been having a conversation with Sid Eskenazi when the potential donor asked what was going on at the Wishard Hospital project. It opened the door.
“That was the beginning of that conversation,” Vargo says. “It has really been a networking success.”
While there was a certain amount of good fortune in landing that donation, Vargo is careful not to rely solely on luck. That’s why so much effort goes into education and contacting people — to communicate the mission.
“It has really been an outreach to folks,” he says. “Not surprisingly, most people we ask in the community if they have ever been to Wishard say, ‘No, I should have. I’ve lived in this community all my life, but I haven’t been.’ And in many cases, they will say nobody has ever invited them.”
So Vargo and his staff invited them to take tours. It was a teaching moment and the lesson was to weave value-added features into the approach.
“So when you take components of a new, modern facility, plus our relationship with the school of medicine — all our physicians are on the faculty of the Indiana University School of Medicine — there are a lot of compelling reasons for people to give to the foundation,” Vargo says. “The other thing that is very compelling especially to the business folks is just that we have a good business plan — our finances show how we have been turned around.”
The personal touch, the tours, the face-to-face conversations show people what is happening and what the vision is for the new hospital has really resulted in phenomenal support for an organization that had not done this type of campaign before, Vargo says.
Grassroots support is not overlooked. Nonphysician employees of the hospital have donated $2.2 million to the fund, whose annual revenue for 2011 was $48 million.
“It’s just been an amazing outpouring from our employees,” Vargo says. “Forty percent of those gifts came after we announced the Eskenazis’ $40 million gift.”
Don’t get sidetracked after a ‘no’
After a process has been developed and is put into use, there may be occasional challenges. These give you an opportunity to meet the challenge by staying true to your mission focus.
For instance, Vargo closely followed the caring approach when faced with an unusual rejection from a potential donor.
“Out of the blue, the man called me one day and said, ‘I feel really bad about this, but my wife had breast cancer years ago, and we’ve really never done anything for the hospital that treated her. We are not going to make a gift to you. We are going to make a gift to this other hospital.’”
Vargo assured the couple that it was the right thing for them to do. With his thoughtful approach, he enabled them to see the value of a philanthropic donation, although it was to another hospital.
Afterward, he did some self-reflection, and saw how this experience reinforced that his message was delivered clearly but it was only the outcome that was different.
“We are all in competition obviously, but it is ultimately what is in the best interests of the donor — and all donors are different.”
Capitalize on your success
If you complete a successful merger, acquisition or turnaround, there is a payoff — and that payoff is often only a new beginning, not the culmination of your efforts.
The next step is about taking advantage of that accomplishment. For the hospital campaign, the large gift from the Eskenazis allowed for construction to begin — and it offered another opportunity.
“One thing that obviously has been helpful is having this new magnificent facility because it can be that stepping stone to get people involved,” Vargo says. “We are having this success but it will be a failure if we don’t capitalize in the future on the success we are seeing today.”
If your project reaches its goal, it is time to enjoy the moment but keep looking ahead. For the Eskenazi Health Foundation, it was resetting the original $50 million goal to $75 million after the campaign’s large shot in the arm.
“We want to keep the same fundraising staff moving forward because it would be silly to ignore all these people who made gifts to us once the new hospital has been built,” Vargo says.
To build on that intention, continue to be in front of people to take the vision as far as what the future is going to be in regard to funding priorities, he says.
“One of the things that we have done is to begin adding new board members who are key players in the community,” Vargo says. “Our incoming board chairman and vice chairman are some higher profile people in the community who are really engaged.
“There is something about building a brand-new project that is exciting,” Vargo says. “But I also think that there are people who would prefer to give to programs. I think we will continue to have success. It is really identifying and articulating what it is that we are going to do.” ?
How to reach: Eskenazi Health Foundation,
(317) 630-6451 or
Get a focus on your mission.
Don’t get off track after hitting a brick wall.
Capitalize on your success.
The Vargo File
President and CEO
Eskenazi Health Foundation
Born: Akron, Ohio.
Education: University of Akron. I majored in communications.
What was your first job?
Working at a car dealership in the Akron area. When people bought a new car, I was one of the guys who got them ready. I learned the importance of doing your job well. If we could work really hard and get it done right the first time, you didn’t have to take it back and do it over. I also got to be involved with the business a little bit. I became familiar with the owner and learned a little bit about how a car dealer business runs.
Who do you admire in business?
A good friend of mine whom I got to know well when I served on the school board here in town was a man named Bob Laikin. He was the founder/entrepreneur of BrightPoint. He’s a guy who is just a passionate, driven person, but also a very caring person. He is just this incredible entrepreneur who just has a lot of integrity.
What is your definition of business success?
The reason I like fundraising is that we have tangible goals. You either make them or you don’t make them. I am really driven by goals and like to have numbers in front of me. But take those short-term goals and incorporate those into long-term goals — how can we be judged and be successful today and raise the money that we need to raise but also how can we take that and make that a long-term success — that’s what motivates me. I am really goal-driven.
What is the best business advice you have ever received?
I came to Indianapolis to work for my college fraternity. I worked for the executive director who was this really brilliant guy, George Spasyk, and he taught me so many little things, such as, ‘Always carry a pen in your pocket so you’re ready to write down whatever you need.’ But more importantly, ‘Treat everybody equal. It doesn’t matter if you are an executive or you are the person in environmental services, they are all important. And if you treat everybody the same, it comes back to you, and you will be successful because of that.’ And the other thing that he taught me was just the importance of having a strategic vision, having a goal for what it is that you were going to do.