Tuesday, December 27, 2022
As the distance between nonprofit and for-profit hospitals narrows, peoplee hve begun asking whether hospitals should qualify as tax-exempt, a question I'm going to look at over the next couple days. Before we get there, though: almost 60% of hospitals are nonprofit. I assume that a large portion of those nonprofit hospitals are also tax-exempt and, as such, subject to the rules for tax-exempt organizations. Including the campaigning prohibition.
As a general rule, when I think of tax-exempt organizations violating the campaigning prohibition, I think of churches. In fact, I'd probably generally put hospitals at the bottom of my list of violators.
I'd be wrong, though. WTTW and ProPublica have recently looked at Roseland Community Hospital, a nonprofit hospital on the South Side of Chicago. Their investigations focused primarily on patient care and funding issues, but in the course of their investigations, the reporters came across an unexpected issue: Tim Egan, the CEO, has endorsed at least one candidate in his capacity as hospital CEO.
As we spend much of the rest of the week looking at whether hospitals should qualify for tax exemption, it's worth starting out asking whether those that are exempt follow the rules that govern tax-exempt organizations. At least one, it appears, does not.
Samuel D. Brunson