Bridging Community Benefit and Philanthropy Leading Forward 2016 – The AHP Leadership Conference July 1, 2016 Julie Trocchio Catholic Health Association of the United States

Overview What is community benefit? Why hospitals provide and report community benefit Recent policies on reporting community benefit Building bridges between philanthropy and community benefit

What is Community Benefit?

What is Community Benefit?

Children’s Hospital Reduces Asthma Admissions Community Benefit: Rooted in Catholic Tradition Children’s Hospital Reduces Asthma Admissions

What is Community Benefit? Rural hospital recruits psychiatrists

What is Community Benefit? Community benefit programs or activities address a community health need and meet at least one of the following community benefit objectives: Improves access to health care services Enhances the health of the community Advances medical or health care knowledge Relieves or reduces government burden for health

What is Community Benefit? Financial assistance Government-sponsored indigent health care-unpaid costs of public program Medicaid State Children’s Health Insurance Program Medically indigent programs Community benefit services

What is Community Benefit? Categories of Community Benefit Services: Community Health Services Health Profession Education Subsidized Health Services Research Financial Contributions Community Building Activities

Programs should not be counted if: An objective, “prudent layperson” would question whether the program truly benefits the community The program or donation is unrelated to a community health need The program represents a community benefit provided by another entity or individual, such as Activities by employees on their own time In-kind value of volunteer time The program benefits the organization more than the community Generates referrals principally to the hospital versus community resources Marketing-focused

Programs should not be counted if: Access to the program is restricted to employees or medical staff affiliated with the hospital, such as Continuing Medical Education program only for your medical staff The activity represents a normal “cost of doing business” or is associated with the current standard of care (expected of taxable and tax- exempt entities alike) Employee benefits, such as in-service trainings Licensure requirements Discharge planning Minimum-standard translation service

Steps 1. Commit 2. Budget 3. Staff 4. Partner 5. Assess

Steps 6. Plan 7. Implement 8. Account 9. Evaluate 10. Report

Why is Community Benefit Important Today? Mission and tradition Legal imperative Philanthropy implications

Mission and Tradition In 1866, to respond to the diphtheria, yellow fever and typhoid epidemics, three French Sisters of the Incarnate Word came to Galveston, TX. When they arrived, they learned that not only were they needed to care for victims of disease, but for the children who had been orphaned by the epidemics. September 22, 2018

The Mission Imperative “Our organizations were established – not for economic opportunity – but to address need for health services in our communities. Our facilities were born out of community need, a tradition that continues today.” Sr. Carol Keehan, DC President and CEO Catholic Health Association

Legal Imperative IRS Revenue Rulings: ‘56, ‘69 IRS Form 990 Schedule H Affordable Care Act September 22, 2018

IRS Form 990 Schedule H

New ACA Requirements for Tax-Exempt Hospitals Community Health Needs Assessments every three years Implementation strategies based on identified community needs Financial assistance policy Policy related to emergency medical care Billing, collections

Issues in Reporting Community building Grants and contributions

Community Building “Some community building activities may also meet the definition of community benefit. Do not report in Part II community building costs that are reported in on Part I...as costs of a community health improvement service…”

Grants and Contributions “Direct offsetting revenue also includes restricted grants or contributions that the organization uses to provide a community benefit, such as a restricted grant to provide financial assistance or fund research. Direct offsetting revenue does not include unrestricted grants or contributions that the organization uses to provide a community benefit.”

Philanthropy Implications Community benefit can impact: Employee loyalty Community good will Partnerships and more Success in advocacy Perception of stewardship

Building Bridges Between Philanthropy and Community Benefit What Philanthropy can do: Team or committee membership exchange Involvement in community benefit process: Assessment (including focus groups, interviews) Planning – recommend priorities Budgeting – need for grants and contributions Program implementation – see mission in action Program evaluation – what do funders want? Telling the community benefit story Other?

Building Bridges Between Philanthropy and Community Benefit What Community Benefit can do: Team or committee membership exchange Dispel myth of deep pockets Involvement in philanthropy process Planning Materials development Activities Demonstrate evidence base, sustainability, ROI (short term, too) Other?

Trends in Community Benefit From random acts to strategic thinking Public health orientation Visible and accountable – inside and out From solo to collaboration – inside and out Looking upstream – at determinants of health