Topic List
Topic: Advocacy (February 2010)
Topic: Chamber of Commerce (May 2009; Updated November 2015)
Topic: Child Day Care (2007)
Topic: Disaster Preparedness (Updated April 2015; Updated November 2015)
Topic: Ebola Planning and Preparations (December 2014)
Topic: Green Purchasing (October 2008)
Topic: Hiring and Training Handicapped Workers (April 2011)
Topic: Income Tax Assistance Program (May 2010)
Topic: Literacy Program (August 2010)
Topic: PACE Housing Costs (February 2008)
Topic: Physician Recruitment (Updated March 2013; Updated November 2015)
Topic: Recruiting for Clinical Laboratory Personnel (April 2009; Updated November 2015)
Topic: Socially Responsible Investing (October 2008; Updated November 2015)
Topic: Workforce Development — Shadowing (August 2015)
Please Take Note: The information provided below 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: Advocacy
Question: Our advocacy team has spent an extraordinary amount of time working on health reform. Can you help me to understand what would count as community benefit, and what might not? Some examples include: staff time doing policy analysis and grass roots advocacy, CEO time speaking to community groups and policy makers, paid advertisements in local and national media.
Recommendation: We recommend determining what portion of your advocacy efforts were directed at expanding access and improving community health (rather than addressing reimbursement issues). That portion of staff and CEO time could be reported as advocacy/community building. We recommend not reporting the cost of paid advertisements.
Topic: Chamber of Commerce
Question: Our hospital is very supportive of our local Chamber of Commerce. I see from your Guide that we can count in "Category F2–Economic Development" our participation in the Chamber. Does that mean that we can count all that we do with the Chamber, or do we have to be selective and only count certain activities with the Chamber? Here are the specific things we do related to the Chamber:
- Sponsor the Annual Meeting (cash donation)
- Sponsor a table at a benefit
- Participate in the Executive Roundtable
- Sponsor and attend a State of the City Luncheon
- Pay dues to belong to the Chamber
Recommendation: The Guide for Planning and Reporting Community Benefit includes participation in the Chamber of Commerce as a Community Building activity in the Economic Development category (F 2 when the issues impact the community's health and safety..
- Count as a community benefit (Cash and in-kind services — Category E) if the activity for which funds or services are donated is related to health care, responds to a community health need and meets a community benefit objective. This would include activities such as community-wide obesity programs and health care access initiatives.
- Count as a community building activity if the activity responds to a community health need and is related to economic development or other community building objectives, such as housing or environmental improvements in the community. Examples of community building activities include participation in a homeless coalition, literacy strategies and executive participation in economic development activities such as an executive roundtable or a "State of the City" event.
- Do not count activities when the primary purpose is business related and/or are part of the cost of doing business in the community. This would include dues to the Chamber of Commerce and, in most instances, financial sponsorship of events.
- Include the dollar value of time spent by salaried employees in health related community activities if the employee is participating during paid work time, rather than on his or her own time, and if participation in these activities clearly is part of the individual's job responsibilities.
(April 2009; Updated November 2015)
Topic: Child Day Care
Question: We operate a child care center where fees cover the direct costs but we lose money when indirect costs are added. The child care center serves the community and our employees. Can we count our loss when indirect costs are added?
Recommendation: We recommend counting indirect and direct costs of the child care center for community members (not employees) under Category F3. Community Support if all of these conditions are met:
- A community needs assessment identifies a gap in child care services;
- Community members that apply for the service undergo some form of means testing or criteria that confirms that they are disadvantaged or have difficulty accessing child care;
- Serving vulnerable people from the community was part of the intent for opening the center.
In reporting indirect costs, we recommend using the community's market rate for indirect costs for child care if this is lower than the indirect cost rate of the health care organization.
(April 2009)
Topic: Disaster Preparedness
Question: What costs related to emergency/disaster preparedness can be counted as community benefit?
Recommendation: Costs for disaster readiness of your organization over and above accreditation, licensure requirements and standard practice may be reported as community building. Be careful not to double-count with in-kind donations and be certain that these expenses are not already captured in indirect costs.
Costs for community disaster readiness can be reported as community benefit.
The IRS instructions include as community health improvement, activities and programs that "strengthen the community health resilience by improving the ability of a community to withstand and recover from public health emergencies."
Report costs associated with: - Participation in community-wide assessments of community disaster preparedness and resilience (not facility assessments).
- Report under Category G. Community Benefit Operations when done as part of the organization's broader community health needs assessment.
- Report under A 4Social and Environmental Improvement Activities when done as a separate assessment for community disaster preparedness.
- Participation in planning for preparing the community for disaster preparedness.
- Report under G. Community Benefit Operations when done as part of the organization's implementation strategy
- Report under A 4 Social and Environmental Improvement Activities when done as a separate plan for community disaster preparedness
- Participation in implementing plans associated with preparing the community for disaster preparedness (such as mental health resource costs associated with training, community partnerships, and outreach planning).
- Report under A 4 Social and Environmental Improvement Activities
- Assisting other hospitals and health care facilities not having the resources, capacity or expertise to meet their own preparedness needs. Examples of assistance include stockpiling medical, surgical, and pharmaceutical supplies for other health care organizations or providing staff and community member training and drills.
- Report in category F3. Community Support. If contributions are financial, be sure to retain documentation from receiving organization that funds will be used to support a community benefit activity.
- Other costs for activities over and above accreditation, licensure requirements and standard practice.
- Report under F3. Community Support
Note: The instructions for IRS Form 990 Schedule H state that organizations can report as community health improvement programs or activities that "strengthen community health resilience by improving the ability of a community to withstand and recover from public health emergencies."
(Updated April 2015; Updated November 2015)
Question: We have used a grant to install a new security system which includes a new lock-down capacity. It will be used in response to disasters or emergencies. Can it be reported as community benefit?
Recommendation: We recommend the security system not be reported as community benefit because it reflects good operations and would be used daily, not just for disasters.
(November 2013)
Topic: Ebola Planning and Preparations
Question: Can costs to prepare for Ebola be reported as community benefit?
Recommendation: Please see on this page the recommendation for reporting disaster preparedness. If costs to prepare for Ebola response meet these criteria they may be reported as community benefit/building.
(December 2014)
Topic: Educating Hospitals About Successful Environmental Practices
Question: We are a nationally recognized, award winning, environmentally-friendly facility. Representatives from facilities across the county visit us and we teach them how to implement our successful practices. Is this community benefit? We realize we are helping organizations outside of our community and the issue we are addressing is internal environmental responsibility.
Recommendation: CHA contacted the IRS about your question. The IRS staff we consulted stated that this would not qualify as community benefit because it's not explicitly health-related education. Nor would it be a community building activity, because it's not an activity that the organization is conducting to improve health or safety in its own community. It may be an activity that furthers tax-exempt purposes and it could be reported in Part III of the Form 990, but not on the Schedule H.
Topic: Green Purchasing
Question: Can we capture the expense associated with green purchasing. Our angst is that expenses for overhead are already captured in "indirect" but we want to calculate the difference between the green purchase and the not so ecologically conscious other options available to us, e.g., paper cups over Styrofoam, fair trade coffee over regular coffee, cost of organic produce over regular produce, etc.
Recommendation: The IRS in its instructions to the Form 990 Schedule H specifically excludes costs related to health care organization's internal environmental responsibility activities. This would include the costs of green purchasing. Therefore we do not recommend reporting this expense as community benefit or community building. However, you can report all of your environmental activities in a narrative report that accompanies your quantifiable report.
Topic: Hiring and Training Handicapped Workers
Question: Our facility hires and trains persons who are developmentally disabled to work in our kitchen and housekeeping departments. Should this be reported as community benefit?
Recommendation: We recommend not reporting this as community benefit because the guidelines for community benefit specifically advise not reporting the training or education of the organization's employees. If the persons were trained and referred to other work settings in the community, it could be reported as community building.
(April 2011)
Topic: Income Tax Assistance Program
Question: Our hospital participates in the Volunteer Income Tax Assistance (V.I.T.A) program with the IRS, a free tax preparation program open to individuals and their families who earn less than $46,000 a year. The hospital is a site and co-workers (salaried and hourly) sign up each year to be part of this valuable service. Over the years we have returned more than a $1 million dollars to community residents. We estimate that participants would pay an average of $300 to a professional tax preparer. In addition, we encourage the participants to open checking/savings accounts with their refunds and offer classes throughout the year on how to manage their money, save, spend money wisely and more.
We feel that this service should count as a community benefit. What category should it fall in and if counted, would it be reasonable to count the value of the service (say $50 for each EZ form)?
Recommendation: Your organization is providing a valuable service by helping low-income persons accurately prepare their tax returns. We recommend it be reported as "Community Building" in the category of "Community Support" We further recommend that your organization determine — to the extent possible — the actual cost to the organization for providing the service, for example, the employees' time if they participate on paid time. If your employees are not participating on paid time, then calculate the administrative expenses incurred to coordinate this activity. We do not recommend reporting what you might have charged. Community benefit equals actual expense not lost opportunity costs.
Topic: Literacy Program
Question: Our hospital has a Reach Out and Read Program, which provides books and other educational materials in English and Spanish to patients in our outpatient clinic ages six months to five years. We receive a grant to help with funding for the program.
Recommendation: We recommend it not be reported as community benefit, because it is provided primarily for patients of your clinic. A criteria for community benefit is that the service not be provided primarily for patients or others affiliated with the organization.
Topic: PACE Housing Costs
Question: Our organization’s Program for All-inclusive Care for the Elderly (PACE) subsidizes the housing of some very low-income persons so that they can participate in PACE. While PACE is a capitated payment for all health services, housing costs are not included. Should we count the cost of housing as community benefit?
Recommendation: PACE, a program for persons dually eligible for Medicare and Medicaid, provides access to care for a vulnerable population (low-income, elderly consumers), and thus is eligible to be considered a community benefit program. Since housing costs are not included in the program's payment rate, we recommend that the cost of housing be included and be reported in Category F. Community Building Activities.
Topic: Physician Recruitment
Question: When should recruitment of physicians be reported as community benefit and what can we count?
Recommendation: We recommend that physician recruitment costs be reported as community benefit/community health improvement in category A4: Social and Environmental Improvement Activities even though "workforce development" appears in the IRS Form 990 Schedule H in Part II, Community Building because recruitment for physicians in response to community health needs expands access and can improve community health and thus meet the criteria for community health improvement.
(Updated March 2013; Updated November 2015)
Topic: Recruiting for Clinical Laboratory Personnel
Question: We have had three vacancies for lab personnel for 15 months. Without sufficient staff, we could not complete tests and patient safety and satisfaction would be at risk. Should we report the costs of recruiting overseas for lab personnel as community benefit?
Recommendation: We recommend not reporting the cost of recruiting lab personnel since this expense is a cost of doing business.
(Updated November 2015)
Topic: Socially Responsible Investing
Question: What expenses associated with socially responsible investing should be reporting as community benefit?
Recommendation: We recommend counting the following expenses under Community Building, F7. Advocacy:
- Dues, grants, and gifts to organizations that support social justice (such as NETWORK)
- Cost associated with advocating for social justice, environmental responsibility, and human rights (such as fair treatment of workers) through investments as shareholders, including:
- Dues to organizations such as the Interfaith Center for Corporate Responsibility
- Voting proxy Management Fees
- Consultant fees
- Staff time
We recommend not counting:
- Normal investing costs; only additional costs specifically related to socially responsible investing should count as community building
- Investment losses related to socially responsible investing, that is the difference between what the investment returns as opposed to traditional investing.
(Updated November 2015)
Question: How do we report time spent by staff when students from the community who are interested in health careers shadow them or talk to them about health careers?
Recommendation: We recommend that the organization study what percentage of time staff members spend away from their duties when working with students and use the findings to set a percentage. We recommend this approach because the percentage can vary based on type of hospital, type of service being shown and other factors. In any case, we do not recommend reporting more than 25% percent of a staff person's time if they are being shadowed by or talking to a student. If an organization reports 100% of a staff person's time then it should justify this cost. Situations where 100% of staff time might be reported might include activities, such as classroom training, that take staff away from regularly scheduled activities. Report under Community Building, F8.
(August 2015; Updated November 2015)