In an era of shrinking margins and increased regulatory oversight, many not-for-profit hospitals are relying more than ever on their charitable foundations to help fund certain elements of hospital operations. A small part of total hospital revenue, the Philanthropic Strategic Plan is an essential part of operations.
Not-for-profit hospitals frequently elect to structure foundation functions as a division of the tax-exempt hospital or parent health system. This allows the hospital/health system to maintain direct control of operations and use of charitable funds. However, oftentimes as a result of multi-campus health system growth, acquisitions of additional tax-exempt hospitals, or other external forces, hospitals may elect to establish a separate IRS 501(c)(3) corporation to conduct charitable activities. In these instances, it is imperative for the hospital/health system to employ certain strategies to maintain a permissible level of authority over the separate foundation and related community board. For example, the health system should seek to retain authority to appoint board members; and the foundation’s purpose should be solely to support the charitable mission of the tax-exempt hospital/health system.
Given the importance of these mechanisms, revisiting your philanthropic plan may prove to be a viable strategy in support of longevity and continuity. Would more local presence in a certain market lead to an increase in community awareness and donations? Or would consolidating the function for multiple venues reduce inefficiencies, inconsistent messaging, and, ultimately, decrease costs?
Advis is available to assist your leadership team in reviewing your current strategy, understanding key impact factors, establishing financial proformas for potential options, and analyzing state/federal regulations that may affect decision-making. A properly constructed and instituted Philanthropic Strategic Plan is a difference maker.
In addition to assisting with your philanthropic strategic plan, there are other important areas we can assist and guide your legal and leadership teams with:
- Reviewing Articles of Incorporation
- Fine-tuning Corporate Bylaws
- Scheduling First Board of Directors Meeting and Keeping Appropriate Minutes
- Registering with Specific State Departments and Attorney General (in conjunction with legal counsel)
- Completing and Submitting the IRS Form 1023 – Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (in conjunction with legal counsel)
For additional information, contact Advis at (708) 478-7030, or visit our website at advis.com for more information on our services.