Hospitals get more in tax breaks than they give in charity care

according to Crain’s.

The Nonprofiteer is always eager to trash the big corporate nonprofits, the hospitals and universities, while racing to the defense of the scrappy little social service, arts, environmental and advocacy groups.  But she wonders what this same analysis would produce if the smaller agencies were under the microscope.  Though probably social service agencies give away most of their services (if only through being desperately underpaid for providing them), surely most arts organizations get more in tax breaks than they give away in tickets.  And groups whose focus is policy or advocacy are not in the business of doing services, much less giving them away.

Anyone in the health care industry is a tempting target these days, and for good reason: we have a system that enriches very few at the expense of many.  And at least the best-known and most selective of American private universities seem content to sit on a lot of capital while asking teenagers and their families to fork over huge amounts more.

But let’s make sure we’re measuring nonprofits by what society and the tax code actually expect them to do, which is to contribute to the public interest by advancing knowledge and producing beauty as well as by offering services.  Research hospitals produce cures for diseases; we get our money’s worth from the tax breaks they receive even if they never give out a dime of care.

Providing patients with the health-care they need is a social responsibility.  Hospitals surely have a special role in making sure this is done, but it’s not their responsibility exclusively and their social worth (meaning, the tax freedom they deserve) shouldn’t be measured exclusively on that dimension.


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