An Overlooked Funding Source: Community Benefit Dollars
What are community benefit dollars?
As a result of their tax-exempt status, nonprofit hospitals have funds available to nonprofit organizations for community needs. The majority of hospitals are nonprofit, about 62%. The conversations on the best use of these funds is a robust one and may offer opportunities for nonprofits that address the social determinants of health an avenue for additional funding.
To operate a health nonprofit, like any business, multiple sources of income is a must. While for-profit business can go directly to a customer to sell their products and services, it is a bit more complicated for nonprofits. Most nonprofits depend on government contracts, philanthropic giving and to a lesser extent individual gifts.
Even in cases where there are fee-for-service programs, our clients tell us that usually the fees do not cover the full costs of the services. The availability of community benefit dollars may offer an additional income stream, thereby increasing the sustainability of community-based nonprofits.
In July 2019, Arboreta Group participated in a public convening hosted by our client the Multicultural Health Foundation called Unlocking the Potential of Community Benefits: Building Partnerships Between Communities and Nonprofit Hospitals. Nearly 90 people were in attendance to witness a panel discussion lead by the Health Equity Director from The Greenlining Institute that consisted of representatives from the medical field, a physician and an administrator, a hospital association, and a local community-based project working on issues of health disparities.
In California, community benefit dollars are estimated to be in the tens of millions, with hospitals and hospital associations being given a wide berth on how these funds are disbursed. The panel discussed the need for accessibility of health care as equally important as availability. Stories were shared about residents needing to take two buses and experience hours in commute time to take their child to urgent care.
Closing the gap of health disparities begins with authentic partnerships, and that begins with clear and honest communication. Those that attended the convening agree that it was a good start. For more information on the assessment of community needs through the lens of the Hospital Association of San Diego and Imperial Counties check out their community assessment, its available on their website https://hasdic.org/2019-chna/.
by Janedra Sykes