Topic List
Topic: After Prom Donations (January 2009)
Topic: Community Benefit or Community Building Donations (April 2009; November 2015)
Topic: Contribution For Fireworks Display (May 2010)
Topic: Contributions to Statewide Nonprofit Insurance Organization (November 2013)
Topic: Donations to Employees (February 2008)
Topic: Donation to Endowment Fund for School for the Deaf (May 2010)
Topic: Employee Time and Fund-Raising Costs (April 2009)
Topic: Entertainment/Sporting Fundraising Events (October 2008; revised November 2008; revised January 2011; revised February 2014)
Topic: Medical Respite Program (August 2009)
Topic: Paying for Care in Outside Facility (October 2008)
Topic: Paying for Low-Income Patient Burial Cost (August 2009)
Topic: Providing Access to Post-Acute Care for Homeless and Uninsured (August 2009)
Topic: Scholarships for Health Professions Education (August 2013)
Topic: Scholarships for Pediatric Cancer Survivors (April 2011)
Topic: Voter Registration Education (June 2012)
Please Take Note: The information provided does not constitute legal or tax advice. The material is provided for informational/educational purposes only. Please consult with counsel regarding your organization's particular circumstances.
Topic: After Prom Donations
Question: We provide cash donations (typically $1000) for "After Prom" school sponsored events. In one of our communities, "positive activities for youth" is one of three top community needs identified in the United Way assessment. In our other community, we do not have an explicit community need identified. Should we count the donation in both communities?
Recommendation: The task force recommends counting the donation in both communities. Since goals of these parties are to prevent accidents and injury to youth, you would be addressing a public health priority and community need.
Topic: Community Benefit or Community Building Donations?
Question: We contribute to a number of community organizations and programs. For example, we support neighborhood cultural centers and the library, give scholarships to local private and charter schools, give donations to city arts programs, and donate to regional hospitals. Do you recommend reporting these as community benefit?
Recommendation: We recommend reporting as a community benefit donation expensed when:
- The funds are being used for an activity that meets the definition of community benefit, including being provided in response to community health need, and
- The funds are restricted by your organization for use as a community benefit activity. According to IRS rules, a letter accompanying the donation must specify its use as a community benefit activity, such as a clinic for uninsured.
We recommend reporting as community building expense when:
- The funds are being used for an activity that is consistent with the definition of community building, including being provided in response to community health or safety need, and
- The funds are restricted for this use. According to IRS rules, a letter must accompany the donation specifying its use as a community building activity (most likely scholarships for low-income students could fit here).
- Donations for community building programs must be reported in the relevant community building category and not under the Community Benefit cash and in-kind contributions category.
We recommend not reporting as either a community benefit donation or community building donation when:
- The contribution is primarily for public relations/marketing reason, or
- The contribution is not related to a community health need, or
- The contribution is not used for an activity that meets the definition of community benefit or community building.
(Updated November 2015)
Topic: Contribution for Fireworks Display
Question: Can we report as community benefit our contribution to the community to put on a fireworks display for special events?
Recommendation: We recommend not reporting as community benefit because we cannot see that there is a community health need here. If the hospital makes this contribution, we recommend it come from the public relations budget and not be reported as community benefit.
(May 2011)
Topic: Contributions to Statewide Nonprofit Insurance Organization
Question:We are part of a statewide nonprofit insurance organization that acts as a capitated insurer for Medicaid patients:
- Can contributions to start up the insurance organization be reported as community benefit?
- If the hospital, along with other hospitals, participates with the organization in doing a community health needs assessment and community health improvement plan, can those expenses be reported as community benefit?
Recommendation: We recommend that the contributions to nonprofit insurance organization be reported as community benefit because the organization promotes access to health care for Medicaid patients and thereby meets the community benefit objectives of increasing access and improving community health. Report contributions in Category E. Cash and In-kind Contributions. As with all financial contributions, the hospital should have documentation that the organization receiving the funds will use the funds for a community benefit purpose.
We recommend reporting all costs associated with community health needs assessments, including costs related to collaborative and joint assessments. Report in Category G. Community Benefit Operations.
(November 2013)
Topic: Donations to Employees
Question: After a natural disaster, our facility made a contribution to help staff members who work in another facility that is part of our health care system. Can we count this as a community benefit?
Recommendation: Since the gift was for employees who work in the same organization, we do not recommend counting as community benefit. However, if the gift was made to help people in the community at-large, including staff members in that area, it could be counted under Category E1. Cash Donations, if restricted to be used for a community benefit objective or Category F if related to community building. If the contribution was made to an independent fund (not part of your system or one of its facilities) it could also be reported as community benefit or community building.
(Updated November 2015)
Topic: Donation to Endowment Fund for School for the Deaf
Question: Our hospital made a cash donation to the endowment fund for a local school for the deaf. Does this count toward community benefit?
Recommendation: The IRS instructions specify that to be reported as community benefit, contributions must be restricted to be used for an activity that meets criteria for community benefit. The contribution to the endowment fund does not seem to meet this requirement.
Topic: Employee Time and Fund-Raising Costs
Question: Our employees participate in the United Way Day of Caring projects that kick off the community's United Way Campaign. Should we report our employee's time on these projects and should we report the cost of running a United Way fund-raising drive?
Recommendation: We recommend counting the employees' time if they are doing these projects on paid time. We also recommend that the staff time and expenses in running an internal United Way Campaign can be reported. (E3, Cash and in-kind contributions) Do not report the amount of the funds raised by employees that go to the United Way.
Topic: Entertainment/Sporting Fundraising Events
Question: We host an annual golf outing. All of the funds raised go directly back to the community for identified unmet health needs i.e. immunization, health profession shortage scholarships, parish nursing, etc. Should we count the expenses to put on such an event as community benefit?
Recommendation: The task force recommends that organizations consider the following guidelines when deciding whether to report fundraising costs for golf outings, galas and other entertainment-oriented events:
- Do not report any costs if the primary purpose of the event is marketing/public relations.
- Do not report costs related to entertainment aspects (green fees, prizes, food).
- Report other expenses associated with fundraising, such as staff time, if all of the proceeds go to community benefit.
- Be very conservative and be sure any expense reported passes the "laugh test."
We recommend that when a hospital organization is asked to co-sponsor (contribute to) a fund raising event sponsored/hosted by another nonprofit organization with proceeds going to an activity that would qualify as community benefit, the hospital count as community benefit the percentage of the sponsorship expense not related to marketing For example, a hospital may decide that 75 percent of the donation is community benefit and 25 percent of the donation was for marketing exposure. There should be written correspondence to the sponsoring organization directing that the proceeds funds be restricted for an identified community benefit activity.
(October 2008; revised November 2008; revised January 2011; revised February 2014)
Topic: Medical Respite Program
Question: We are part of a multi-hospital collaborative that provides funding to a medical respite program, a 15-bed unit in a homeless shelter that accepts homeless patients transitioning out of an acute care setting. We contribute $25,000 annually. This year we discharged seven patients to the respite program. The estimated avoided inpatient bed days and cost savings of those seven patients is 26 days and $145,000. I assume I can still describe the program in the narrative part of my community benefit report, right? Can I count the $25,000 annual contribution given we've had an estimated cost savings?
Recommendation: The contribution to the homeless shelter may be considered a community benefit expense as long as your primary purpose in supporting the shelter is to serve homeless persons (as opposed to shortening their length of stay in order to save money for the hospital). The contribution to the program should be reported as E1: Cash Donation.
Topic: Paying for Care in Outside Facility
Question: Can we count the expense the hospital incurs when the hospital discharges an uninsured patient to another facility and pays for that person's care in an outside facility.
Recommendation: We recommend reporting payments to care for a patient in another setting in the category of "cash and in-kind contributions."
Topic: Paying for Low-Income Patient Burial Costs
Question: We provide money for burial costs, including headstones, for patients who do not have resources to pay, and in-house memorial service costs for family members who have lost a loved one in our facility. Should we report these expenses as community benefit?
Recommendation: We do not recommend reporting the cost of memorial services for patients. This would be considered an extension of the excellent, compassionate care you are giving.
If you help pay for head stones and burial costs for families who cannot afford the cost on their own, we recommend reporting the expense under Category E1. Cash Donation.
Topic: Providing Access to Post-Acute Care for Homeless and Uninsured
Question: Occasionally, the acute care hospitals in our system treat homeless and uninsured patients who require post-discharge treatment but cannot find community resources willing to serve them. We have a post-acute division in our system that provides nursing home, assisted living, home care services. This division is a separate corporation with a separate tax ID number. The hospitals have worked out an agreement with the post-acute division that if a homeless or uninsured patient meets clinical criteria for post-acute care services, the post-acute division will accept the patients and the hospital will pay for the care (at cost). Can this be reported as community benefit?
Recommendation: We recommend the payments be reported as a community benefit expense in the category of E1: Cash Donation because the services being paid for address a community need and increase access to services for the patient.
Topic: Scholarships for Health Professions Education
Question: Our hospital makes contributions to organizations that use the donation to provide scholarships to those in health professions education. For example, we gave a donation to a church that is supporting two students in medical school in Haiti and we gave a donation to a state foundation which gives scholarships to healthcare professionals who promise to work in our state (not our hospital) upon earning their degree. Our state has a significant number of healthcare openings. Should these donations be counted under B4: Scholarships/Funding for Health Professions Education or another category since the hospital is not directly providing the scholarships but is making a contribution to another organization who will be offering the healthcare professions scholarships
Recommendation: Since this activity is a cash contribution to support health professionals, we recommend reporting in Category E: Cash and In-Kind Contributions. Be sure to have documentation from the organizations granting the scholarships on how those scholarships will be used.
(August 2013)
Topic: Scholarships for Pediatric Cancer Survivors
Question: We provide college scholarships for our pediatric cancer survivors. Frequently the costs of cancer care for even an insured child wipes out families financially. We often see families struggle with funding college for our cancer patients because they have invested their savings in treatment costs battling their child's cancer. Our college scholarship fund provides these young cancer survivors with a chance at a college education, which might not otherwise be available. Can the cost of the scholarship program be reported as community benefit?
Recommendation: We recommend that the scholarship program not be reported as community benefit because it does not meet the definition of community benefit. This is a very worthy program, but it is not for health care professional education nor is it open to the broader community. We recommend reporting in a narrative community benefit or annual report.
(April 2011)
Topic: Voter registration/education
Question: Our hospital contributes money for the production and distribution throughout the community of a video produced by a nonprofit organization to help people better understand our country's democratic and economic system and how that impacts health and well-being as an American. We also help with voter registration in our rehab facility and the local community health center. Can we count these expenses as either community benefit or community building?
Recommendation: These activities do not appear to address an identified health need. Therefore, we recommend that you do not report the expenses as community benefit. However, these activities reflect your organization's story as a good corporate citizen so you may want to include them in the narrative report.
(June 2012)