August 16, 2008
Is Charity Care Declining at Safety Net Hospitals?
A paper from the Center for Studying Health System Change published as a web-exclusive by Health Affairs indicates that competitive pressures in the health care industry are driving "safety-net" hospitals, which have been the bastion of most charity care offered by the nonprofit hospital sector, to take steps to reduce services for the poor and increase the percentage of paying patients.
The authors found that although the costs of uncompensated care at its sample hospitals (an ongoing survey of hospitals in 12 metropolitan areas throughout the country) have risen by 28% over the last decade, those costs have actually declined by 7% as a percentage of hospital revenues. The paper notes that safety-net hospitals increasingly are targeting well-insured patients and profitable services, "adopting some of the same strategies being used in the private sector to attract higher-paying patients and changing their 'image' as a safety-net provider."
The paper also notes some other disturbing trends, particularly with access to physician services. The authors state, "the recent growth of large single-specialty groups that dominate a market might also contribute to decreased charity care. In Seattle, for example, access to orthopedic surgeons is virtually nonexistent for uninsured people and Medicaid enrollees, because a single group of orthopedic surgeons has a virtual monopoly in the community and does not accept Medicaid or uninsured patients."
This paper is sure to add fuel to the tax-exemption fire currently surrounding nonprofit hospitals. In fact, at the end of the paper the authors suggest that tax-exemption is one public policy lever that might be used to offset the trends noted. I have suggested for several years now that federal tests for classifying nonprofit hospitals as tax-exempt charity need wholesale revision to provide stronger accountability, with a particular emphasis on whether a nonprofit hospital significantly improves access to health care services for its community (as opposed to simply replicating services available in the private market). See, for example, The Failure of Community Benefit, 15 Health Matrix 29 (2005) (available on Lexis here).
August 14, 2008
American Nonprofits Raise Over $110 Million for Disasters in Asia -- But Many Face Hardships to Deliver Aid
The Chronicle of Philanthropy reports that American nonprofit groups have thus far raised more than $110 million for victims of the natural disasters that hit Myanmar and China in May. Yet, these charities are facing great hardship as they attempt to deliver aid to those people who need it most. In Myanmar, for example, many Americans have never received visas to enter the country, and are thus working through local charities. According to The Chronicle:
Many groups have been forced to scale back their efforts because of problems entering the country and moving around once they are inside. Workers face harassment by government officials and some parts of the country remain accessible only by boat.
An additional constraint facing aid workers is the U.S. government sanctions against Myanmar. While the Treasury Department eased the sanctions following the cyclone, they are scheduled to be restored in January.
Meanwhile, The Chronicle reports that recovery efforts in China have been encouraging. Several reasons exist for this: (1) American corporations with business interests in China have played a significant role in the rebuilding effort; (2) local volunteers continue to offer assistance in large numbers; and (3) the Chinese government has been deeply involved in the recovery effort.
New Accreditation Plan for Muslim Charities
Ever since the events of September 11, 2001, many Americans have been suspicious of Muslims and of Muslim Charities. Muslims in San Francisco are fighting back.
Yesterday, a watchdog group and a nonprofit legal organization announced a plan aimed at restoring donor confidence in Muslim charities, while at the same time protecting them from unfair government scrutiny. According to a report appearing in Philanthropy Today:
The voluntary accreditation program — run jointly by the Better Business Bureau’s Wise Giving Alliance and Muslim Advocates — will vet aid groups, mosques, and other Muslim charities and help them meet the alliance’s standards of accountability.
Muslim Advocates, a legal and civic-education group in San Francisco, will look over a charity’s financial and legal records and offer advice to Muslim charity leaders in advance of review by the Better Business Bureau.
Farhana Khera, executive director of Muslim Advocates, views the program as a "smart, practical solution" to the current fear and reluctance among donors to donate to Muslim charities. The group hopes to hold meetings in eight cities this fall to educate charity leaders about the new program.
August 13, 2008
2008 New York Nonprofit Conference Begins Today
The 2008 New York Nonprofit Conference is being held at the Waldorf Astoria in New York City from today, August 14, to tomorrow, August 15. The conference is organized by Direct Marketing Association, a global trade association of business and nonprofit organizations. On its Website, the organization states that it "advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the entire direct marketing process."
Presentations at this year's conference include: "How Do You Listen to Different Ethnic Communities? Fundraising in the Hispanic Market," "When Is It Okay Not to Ask for a Gift?", and "'What Difference Did My Gift Really Make?' Impact Reporting -- It's Changing Philanthropy."
August 12, 2008
Charleston Law Review - Call For Nonprofit PapersThe Charleston Law Review
Though we are a young journal at a young institution, the Charleston Law Review has enjoyed the privilege of publishing some of our nation’s leading thinkers and has earned a reputation as being a professional publication that authors have enjoyed working with. In its second volume, for example, the Charleston Law Review garnered national recognition for publishing Senator and Democratic Presidential Nominee Barack Obama and hosting a punitive damages symposium that featured leading thinkers such as Professor Anthony Sebok of the Benjamin N. Cardozo School of Law, Professor Neil Vidmar of Duke Law School, Professor Keith Hylton of Boston University Law School, and Professor Mike Rustad of Suffolk University Law School. The symposium volume also included noted practitioners Ms. Elizabeth Cabraser and Mr. Victor Schwartz. In its general issues, Charleston Law Review also published notable scholars such as Professor Walter Murphy of Princeton University and Professor John Yoo of University of California Berkeley Law School.
Submissions preferred by August 20th, but will be accepted after that date if space remains unfilled. For further information on the Charleston Law Review, please contact Editor-in-Chief Katie Fowler via email at email@example.com or via telephone at 803-309-5421.
August 11, 2008
New Orleans Residents Give Katrina Recovery a Mixed Report Card
A survey released by the Kaiser Family Foundation this past Sunday reveals that after almost three years since Hurricane Katrina struck, a still-struggling population is giving very mixed reviews in key areas of the recovery efforts. The survey's results indicate that most of the city's residents feel forgotten by the nation and its leaders, yet are still optimistic about their city’s future.
Following is an excerpt of the Kaiser Family Foundation's news release announcing the survey's findings:
In two critical areas, housing (72 percent) and crime (71 percent), the vast majority of city residents see little or no progress. In other key areas – medical facilities, public schools, jobs, and rebuilding neighborhoods – reviews are more mixed, but with majorities seeing little or no progress. Only in one area, levee repair, does a majority (60 percent) see progress.
“Residents are not satisfied with the pace of the recovery effort, but they do see it moving in the right direction,” Foundation President and CEO Drew Altman said.
The survey also finds that an increasing number of residents say they face mental health challenges as the recovery drags on. In addition, the results show some easing of racial tensions, though many residents still see a city divided between haves and have-nots.
The survey was designed and analyzed by Kaiser Family Foundation researchers, and was fielded house to house and by telephone this spring among 1,294 residents of Orleans Parish, the area with the most residents affected by Katrina's aftermath.
Tax-Exempt Superbowl: IRS vs. The NFL
Imagine this match-up: The IRS versus The NFL. Who will win? I guess we shall find out before this year is over...
The New York Times reports that the two parties are now locked in battle, not on the football field, but in the halls of Congress (and ultimately, in the court of public opinion).
For years, the NFL, like any other nonprofit organization, has used IRS Form 990 to disclose names and salaries of "key employees." The NFL has consistently maintained that only one of its employees -- the NFL Commissioner -- fits the definition of "key employee."
However, in recent years the IRS has proposed new rules to require most of the more than 1.6 million nonprofit organizations in the country to disclose much more information, including salaries of many more key employees. The rules go into effect this year. The NFL is resisting.
According to the Times report, the football league is asking Congress for an exception to the requirement of publicly disclosing the names and salaries of employees at NFL headquarters who make more than $150,000 a year. The NFL is arguing that it is not a charity that receives public donations. Rather, it argues, it is a trade association financed by the teams that make up the league. The owners of these teams, the league argues, can ask for salary information at any time. But the general public? Joe Browne, the NFL's executive vice president for communications and public affairs, says no public purpose can be served disclosing more trade-group salaries.
On the other side of the playing-field (well, battlefield, if you prefer that term), the IRS and some outside experts on nonprofit law say there is indeed a public interest in disclosing top salaries for all tax-exempt groups: to assure that these salaries are not excessive.
At least one referee is not impressed with the NFL's arguments. The Times reports that:
Senator Chuck Grassley, Republican of Iowa, who is considered a nonprofit expert on the Senate Finance Committee, said all organizations that benefit from tax-exempt status should provide the same public information of their finances.
“Disclosure helps keep everyone honest,” Grassley said in a written statement. “If, as requested, professional associations like the NFL are allowed to keep salary information from the public, other tax-exempt groups would ask for the same treatment. This would be contrary to the goal of increasing transparency and accountability from tax-exempt organizations to the public.”
We wait to see who'll win this battle.
Federal Agents Raid New Orleans Nonprofit
The Associated Press is reporting here that Federal Agents have raided New Orleans Homeownership Corp., a 501(c)(3) hired by the city to the tune of $1.8 million to rehab houses damaged by Hurricane Katrina. According to the organization's website:
The New Orleans Affordable Homeownership Corporation, formerly Urban Homeowners Corporation of New Orleans, was formed in December 1989. This Corporation has the purpose of combating community deterioration, implementing housing (including single family ownership) and other assistance programs for the homeless, and for persons of low and moderate income; increase the number of safe, decent and sanitary housing units in the City; foster economic development and business opportunities for residents of the City; provide literacy training, job training and job placement services; promote and preserve the arts; create meaningful activities for youths at risks; provide education, management and training to disadvantage residents who seek to develop businesses which will improve their living conditions; and in general, improve the quality of life, housing conditions and work opportunities for residents of the City.
Of course, the accused is innocent until proven guilty but the fact that people are still homeless after, what, four years ought to be exhibit 1. The investigation is being conducted by the FBI, the Inspector General and (gulp!) the IRS.
August 10, 2008
Bush Criticizes China's Restrictions on Religious Freedom
Yesterday, we blogged that with the eyes of the world glued on China during the Olympics, the Chinese government has been tightening restrictions on religious practice in that country (Washington Post: Beijing Curbs Religious Rights). One day later, the Washington Post is reporting that during his current visit to China, President Bush has been speaking out about these restrictions. According to the Post, after attending a service at a government-authorized Protestant Church on Sunday morning, President Bush stated that "No state, man or woman should fear the influence of loving religion." His comment was seen as a clear reference to his concerns over the restrictions the Chinese authorities place on worship at churches that are not officially sanctioned.
These concerns also surfaced in the President's weekly radio address during which he stated that he is using his time in Beijing to express "America's deep concerns" about freedom and human rights in China. According to Bush, his trip to China "has reaffirmed my belief that men and women who aspire to speak their conscience and worship their God are no threat to the future of China."
Chinese authorities have reportedly responded coolly to Mr. Bush's criticisms.
Crisis in Bond Market Hits Orange County Nonprofit
According to a story published in Thursday's edition of The Orange County Register (Performing Arts Center Loses $13 Million from Bond Market Crisis), crises in the bond market caused the Orange County Performing Arts Center to suffer $13 million in losses during its recently concluded fiscal year.
According to the news-story, the Center is heavily invested in bonds, which are financing the nonprofit institution's $240 million expansion, completed in September 2006. During the last fiscal year, the Center saw its bond insurance policy plummet from an "AAA" rating to junk status, rendering it valueless. Consequently, the Center was forced to write off that insurance to the tune of $8.8 million. The Center also experienced an unexpected spike in interest rates for its auction-rate bonds from about 3 or 4 percent to 10 percent. Since February, the Center has paid about $4 million in unanticipated bond interest.
Center president Terrence W. Dwyer blamed the current situation on the crisis in the nation's financial markets:
The turmoil in the nation's financial markets and auction-rate bond market failure has had a significant effect on the center's overall financial situation, as it has on many major not-for-profit institutions across the country.
Meanwhile, other California nonprofits have joined the arts center in ditching auction-rate bonds and bond-insurance policies that are no longer secure. The Register reports that Chapman University, Hoag Memorial Hospital Presbyterian, the Los Angeles County Museum of Art, the J. Paul Getty Trust and the Colburn School have all had to reconsider or refinance their bond issuances.
D.C. Church Sues Over Landmark Status
According to an article appearing in Friday's edition of the New York Times (Church Sues Over Landmark Status), the Third Church of Christ, Scientist (located near the White House), filed suit against Washington, D.C., on Thursday, accusing the city of violating the church's religious freedom by declaring it's building a historic landmark and refusing to allow church leaders to tear it down.
The church building presents a study in the old saying, "beauty is in the eye of the beholder." To some people, the building, a stark structure with walls that soar toward the sky, is an eyesore; to others, it is a work of genius. The 37-year-old building was designed by Araldo A. Cossutta, who had been an architect in I.M. Pei's modernist architecture firm, and was declared a historic landmark by the city in December 2008.
According to the New York Times, supporters of preserving the building say it is a sterling example of a style of architecture called brutalism, identified by repetitive geometric design and raw concrete. However, J. Darrow Kirkpatrick, the church’s former first reader or lay leader, contends that the building is expensive to heat and that it costs up to $8,000 a year to change the light bulbs because scaffolding must be erected to do so. According to Mr. Kirkpatrick, most of the church’s nearly 400 seats are empty for services, and the concrete is so porous that the smell of mildew lingers.
“We believe this brutalist, unwelcoming, bunkerlike building is not a proper representation of our practice or our theology and, that without a compelling government interest, our members, not the Historic Preservation Review Board, are in the best position to determine that representation,” Mr. Kirkpatrick said Thursday in announcing the lawsuit at a news conference.
However, David Maloney, state historic preservation officer for the District of Columbia, has countered that although it is unusual for such a recent building to be declared historic, officials felt that it was an important architectural statement. According to Maloney:
Third Church is a rare Modernist church in the city, and the complex possesses amazingly high integrity (in all respects: location, design, setting, materials, workmanship, feeling and association), down to the original carpeting and seat upholstery in the church auditorium.
Meanwhile, Eric C. Rassbach, litigation director for the Becket Fund for Religious Liberty, a nonprofit group assisting the church, has stated that the dispute is about more than architecture. According to Rassbach, “The city is saying you must keep the forbidding concrete wall, and the church is saying we want to reach out to people. This case tees up whether historic preservation can trump the right to worship.”