Community Benefit

Nonprofit hospitals are exempt from federal and most state and local taxes. Because of this exemption, they are required to spend a certain portion of their revenues on activities that will improve health in their communities. These activities can include charity care for patients with low incomes, medical research, and in-kind assistance. In 2011, nonprofit, tax-exempt hospitals reported $24.6 billion in spending on community benefit programs and activities.

Many hospitals have allocated a portion of their community benefit budgets for grantmaking because they do not have the infrastructure to administer public health projects. Because rural hospitals often have deep ties to their communities, they may be interested in partnering with or providing funding to existing community organizations that are working in their areas of interest.

For programs interested in partnering with a hospital's community benefit program, one key piece of information to consider is the hospital's priority areas of investment identified in its community health needs assessment (CHNA). As part of the process to allocate community benefit funds, hospitals must complete a CHNA every three years and make it publicly available, usually on their website. This CHNA is developed based on data gathered from public health, community members, and other stakeholders. The goal is to identify and prioritize key areas for engagement in the hospital's service area. Therefore, the CHNA can provide a useful snapshot of the hospital's existing areas of investment and new areas of interest.

Philanthropies often appreciate seeing how community organizations are using the CHNA or other needs assessment framework to make strategic investments and partnerships that will improve health for the whole community.

Resources to Learn More

Community Benefit Activities of Critical Access Hospitals, Non-Metropolitan Hospitals and Metropolitan Hospitals
Document
Describes how nonmetropolitan, metropolitan, and Critical Access Hospitals perform on a variety of community benefit indicators. Also includes a list of some of the most common community benefit activities including immunization programs, health fairs, and indigent care clinics.
Author(s): Croll, Z., Gale, J., & Coburn, A.
Organization(s): Flex Monitoring Team
Date: 11/2012

Community Health Assessment Toolkit
Document
A step-by-step guide that provides information about the community health needs assessment process and the types of information needed. Also provides information about the prioritization process. Useful for rural organizations asked to participate in the development of a CHNA.
Organization(s): Association for Community Health Improvement