Nonprofit Newswire | Hospital Hopes Nonprofit Status a Life Raft

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January 24, 2010; Washington Post | After reporting several weeks ago on the financial crisis United Medical Center in Washington, D.C. finds itself in, the Post reported Sunday that the hospital is seeking a nonprofit charitable status to help stave off certain ruin. Hospital executives say registering as a nonprofit charity would make it easier to serve some of the city’s poorest residents. By obtaining status as an Internal Revenue Service-approved nonprofit, the hospital might attract more charitable donations because contributions would be tax-deductible; would qualify for higher Medicaid and Medicare reimbursement payments, a crucial move for a hospital where eight of 10 patients have government-sponsored insurance; and would save at least hundreds of thousands of dollars in annual tax liabilities, the hospital’s CEO, Frank G. DeLisi, said. Let’s hope the Medicare reimbursements and local tax exemptions do the trick, because charitable contributions aren’t likely to have a huge effect. A recent report from the Congressional Research Service [PDF] said that charitable contributions were only 2 percent of the total revenues of the health care sector, including but not limited to nonprofit hospitals, in 2005. A 2009 report from the Association for Healthcare Philanthropy said that charitable contributions to the U.S. healthcare sector grew only 2.9 percent in 2008, half the rate of increase in 2007 (charitable contributions to the healthcare sector in Canada actually declined almost 13 percent in the same period). Importantly, planned giving pledges secured but not paid as promised in 2008 fell 13 percent. The AHP study notes that the majority of charitable funds for health care went for construction or renovation of facilities (you know, the named hospital “wings” we’ve all be treated in), and purchasing equipment was the second most common use for charitable fundraising. Greater Southeast, as it is still known in Anacostia, needs money for general operations, a difficult fundraising task for nonprofit hospitals no matter what, doubly difficult in DC’s small philanthropic sector and within Anacostia’s very low income population.—Aaron Lester and Rick Cohen