Community Benefit

Paying Expenses on Behalf of Individuals

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.

Question: When my organization pays for services for an individual patient, do I count the expense under Category E. Cash and In-kind or under A3. Health Care Support Services?

Recommendation: We recommend that when payment is made to another organization on behalf of an individual patient or non patient and when the gift is restricted to community benefit purposes, this expense can be reported Category A3, Health Care Support Services. IRS Instructions direct hospitals to report as cash contributions those contributions made to "entities and community organizations that share the organization's goals and mission. " We interpret this to mean that contributions on behalf of or to individuals be reported in Category A3, Health Care Support Services.

(January 2011; Updated November 2015)