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Partnering with Health Conversion Foundations

Health conversion foundations, also known as health legacy foundations or hospital conversion foundations, are typically established when a nonprofit healthcare entity converts to a for-profit corporation. The healthcare entity can meet federal requirements regarding the sale of tax-exempt entities by creating a new foundation that preserves the value of the nonprofit for the public's benefit.

One 2014 census identified 306 health legacy foundations across 43 states with total assets of over $26 billion. Health legacy foundations in rural areas can be particularly important philanthropic partners for rural organizations. Over 80% of these foundations primarily serve one local community or county, which can provide consistent sources of funding for rural health programs. While some hospital conversion foundations only focus on patient care and related activities to increase access to services, others are focusing more broadly on social determinants of health. The missions of hospital conversion foundations may include health, education, community development, housing, advocacy, and capacity building.

Examples of Health Conversion Foundations

  • Formed in 2008, the Empire Health Foundation is a private health conversion foundation based in Spokane, Washington, with a service area of 7 counties and 3 tribal reservations in eastern Washington. The foundation invests in health initiatives that improve access, education, research, and policy. For example, in 2017 Empire Health Foundation awarded grant funds to the Stevens County Summer Food Program to purchase food items to provide supplemental food boxes to families with low incomes.
  • The Alleghany Foundation in rural Covington, Virginia, was established in 1995 after the conversion of Alleghany Regional Hospital. The foundation has awarded over $50 million to local nonprofits and government agencies to promote the health of the community. For example, in order to increase access to care for children and youth in Alleghany County, the foundation provided funding for school nursing programs in local public schools.
  • The Kansas Health Foundation in Wichita, Kansas, was established in 1985. The foundation currently holds a $200 million endowment and seeks to promote health among all residents of Kansas. The foundation has a long history of supporting Thrive Allen County, an initiative that focuses on increasing opportunities for and access to economic development, education, healthcare, and healthy living in rural Allen County. Since 2014, Thrive Allen County has received over $1 million in grants to build a rural health advocacy network, improve health equity, and increase access to healthy food for rural residents.
  • The Greater Rochester Health Foundation, established in 2006, works with several rural counties in western New York to meet the needs of underserved residents. For example, the Neighborhood Health Status Improvement program works with rural communities to make changes to the social, physical, and economic environment through an asset-based community development framework. One grantee, the S2AY Rural Health Network, received a grant to implement the Our Town RoCKS initiative. This long-term strategic planning program mobilizes community members to improve health behavior, access to services, and economic opportunities in rural Yates County, NY.
  • The Colorado Trust is one of the largest hospital conversion foundations in the United States, with assets totaling $511 million. The trust has a long history of partnering with rural organizations and communities to provide funding that promotes health equity for rural communities. For example, the foundation sponsors Rural Philanthropy Days to increase philanthropic partnerships for rural communities and provides funding to the Colorado Rural Health Center to develop the rural workforce.

Considerations for Implementation

Hospital conversion foundations are affected by rules and regulations at the state level. Some states require these foundations to operate community advisory boards, which could present opportunities for rural organizations to advocate for their needs. Rural hospital conversion foundations also experience workforce challenges. For example, these foundations may struggle to recruit staff members with the desired experience or skills.

Program Clearinghouse Examples

Resources to Learn More

Finding Leverage over the Social Determinants of Health: Insights from a Study of 33 Health Conversion Foundations
Analyzes the strategic framework of 33 health conversion foundations and describes their investments in issues related to the social determinants of health.
Author(s): Easterling, D. & McDuffee, L.
Organization(s): Wake Forest School of Medicine
Date: 3/2018

Health Legacy Foundations: A New Census
This journal article describes the state of health legacy foundations in the U.S. and identifies select challenges that follow the conversion of rural hospitals.
Author(s): Niggel, S.J & Brandon, W.P.
Citation: Health Affairs, 33(1): 172–177
Date: 1/2014

A Profile of Foundations Created from Health Care Conversions
Lists basic information about 155 healthcare conversion foundations and public charities, including the focus of their grantmaking.
Organization(s): Grantmakers in Health
Date: 6/2009

Social Determinants of Health: How Are Health Conversion Foundations Using Their Resources to Create Change?
This blog post explores examples of health conversion foundations working with local communities to fund initiatives that focus on the social determinants of health. One rural example provided is the Greater Rochester Health Foundation in Western New York.
Author(s): Easterling, D. & McDuffee, L.
Citation: Health Affairs Blog
Date: 3/2018