One of Many Emerging Health Conversion Foundations Stops to Listen

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July 18, 2016; The Herald (Sharon, PA)

A new foundation in Western Pennsylvania will receive funds from the sale of Sharon Regional Health System just over two years after Community Health Systems of Franklin, Tennessee, bought the hospital in April of 2014.

It was not until recently that Mercer County Judge Christopher St. John released $21.9 million of the sale proceeds, which have been held in the Christian H. Buhl Legacy Trust (formerly known as Sharon Regional Health System). Representatives of the trust/old company said they “have been concentrating on addressing its financial obligations, which included paying its debts, funding its pension obligation and collecting its accounts receivables.”

Buhl Regional Health Foundation will be among the estimated 400 “new” health conversion foundations in the U.S. recently reported on by Nonprofit Quarterly. It will serve twelve communities, both in Pennsylvania and across the Shenango River into Ohio. The foundation’s executive director, Michaelene Gula, is a longtime employee of the hospital, having served as a nurse for 38 years. During her career, she led multiple philanthropic initiatives to raise dollars for the hospital before it was sold to the for-profit Community Health Systems (CHS)—also recently reported upon by Nonprofit Quarterly.

However, since the court’s announcement this past May, Gula and her team have taken the time to ensure they understand the community’s needs and set up processes before any dollars are distributed. They have announced that they will begin their work by listening first. In a statement to the Sharon Herald, Gula said, “We have an excellent board of directors who want to take some time to learn about their community’s health needs” from both the residents and healthcare providers before setting processes and distributing grants. On the new foundation’s website, Gula’s position overview states that her role is to “develop start-up processes, promote partnerships, programs and grants that advance the Buhl mission to improve the health and wellbeing of the residents and communities served by Sharon Regional Health System.”

Our June 7th NPQ report on conversions also stresses the importance of broadening community partnerships and leadership, as well as working to “develop a well-thought-out plan before beginning grant distribution.” Another key point the NPQ article makes is the importance of protecting the new foundation’s credibility when considering historical connections to the hospital. In this case, CHC continues to operate under the old name of the hospital, prior to sale. When the focus of the new foundation is to improve the health of communities served by Sharon Regional Health System, it is not clear whether leadership is referring to the new, for-profit Sharon Regional Health System or the historical Sharon Regional Health System. While these differences may not seem substantial, they can be monumental at times.

Foundations like Buhl Regional Health Foundation, created as a result of a sale between a nonprofit and for-profit hospital, are established with a new charitable mission. This new designation prohibits them from directly supporting the for-profit entity that now operates the very organization in which it originated. The confusion both at a foundation and community level is extremely important to focus on and tackle quickly.

The Buhl Regional Health Foundation’s immediate efforts to reach out and understand their service area are a tribute to their connection to communicating. According to Grantmakers in Health, conversion foundations do tend to have special relationships to their local communities. Gula said that helping local organizations deal with their struggles is the mission of the Buhl Regional Health Foundation. “It will be a partnership—collaboration, not competition.”—Michelle Lemming