About Bob Bob serves as President and CEO of GuideStar and serves on the boards of Vision TV, Grameen Foundation USA, and the AAFRC Trust for Philanthropy. More...
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Posted By Bob Ottenhoff on March 26th, 2010, in these categories: Health CareEarlier today I wrote about the fact that we should expect a series of revelations over the next few weeks about details found in the health care bill. Here are two from today’s news reports:
According to the BNA Daily Tax Report “Nonprofit hospitals will have to begin proving to the Internal Revenue Service (IRS) that they are providing a charitable service to the community in order to keep their tax exemptions under health care overhaul legislation signed into law March 23. The law requires that tax-exempt hospitals complete a community needs assessment once every three years; to adopt and publicize a financial assistance policy; and adds a new Section 4959 to the Internal Revenue Code to impose an excise tax penalty of $50,000 for any nonprofit hospital that fails to satisfy the community health needs assessment. “The provisions take steps to differentiate tax-exempt hospitals from for-profit hospitals and provide further transparency about tax-exempt hospitals’ fulfilling their charitable mission,” said Senator Charles Grassley (R-IA) in a March 24 statement. In addition to the extra measures now required by nonprofit hospitals and the IRS, the law also requires the Treasury Department and Health and Human Services Department to submit an annual report to Congress on the level of charity care, bad debt expenses, and the unreimbursed costs of means-tested and non-means-tested government programs.”
I suspect we’ll be seeing more of this demand to demonstrate charitable status as local and state governments continue their efforts to collect additional taxes.
And here’s a fun one from The Daily Beast: “ Lost in the acrimony of the health-care reform, there was one clause that all sides seem to agree on: Beginning next year, all restaurant chains with more than 20 locations will have to post calorie counts and other similar information.” Here The Daily Beast provides a list of the “The 40 Deadliest Fast-Food Meals.” http://www.thedailybeast.com/blogs-and-stories/2010-03-24/the-40-deadliest-fast-food-meals/
Posted By Bob Ottenhoff on March 26th, 2010, in these categories: Health CareI sure hope it works. I’m talking about the landmark health reform law.
http://benwikler.com/healthvictory.html
It’s been a disquieting year. The debate – brawl may be a better word – about health care has been awful. Slogans, distortions, slick advertising, charges and counter charges. You name it and we’ve had to endure it. Everything but meaningful debate that puts good public policy and common sense above partisanship and short term gain.
But now it’s law. Stretching well over 1,000 pages, it’s impossible to judge whether every provision is a good one and was necessary. But on the whole, I think it was a risk worth taking. I for one am pleased that this new law has found a way to insure another 33 million Americans. I believe that the social contract we have as citizens of this great nation means we are willing to do our part to support certain public benefits – schools, libraries, parks – and I would say basic health care – that benefit all of us, no matter our economic status or interest in using these public services. Finding the right balance between our obligations as a citizen of a nation and our rights as individuals will become one of the defining issues of the fall elections.
Now those thousand-plus pages of the law must be turned into millions of pages of regulations. The devil will be in the details. For the next few months we’ll be reading newspaper stories about little known provisions of the law. Just two days ago I read in the Wall Street Journal that the health bill “requires that restaurant chains post calorie counts for all the food items they sell.” I’m sure the restaurant lobby knew, but I sure didn’t.
The law will have profound implications for the nonprofit sector.
Two in particular strike me:
One, we’ll need to be in the middle of the deliberations about the meaning and spirit of the law as regulations are written up. This will take time, smarts, and toughness. It will require nonprofits doing things they hadn’t done before and doing things that weren’t budgeted. But these discussions could eventually determine the success of the bill.
Two, much of the implementation of this bill will ultimately be borne primarily by nonprofit organizations and their employees. We’ll need to be at the top of our game. Many observers will be looking for signs of failure as proof that this legislation was misguided. We’ll need to demonstrate our capabilities and capacities like never before. Millions of our fellow citizens will be counting on us.
Posted By Bob Ottenhoff on January 8th, 2010, in these categories: Donors | Health Care | Nonprofit Practice | Public PolicyOne of the joys of living in the Washington area is that while watching the news on television, we get to see the strangest advertisements urging Congress to do such-and-such sponsored by some supposedly high-minded, publicly spirited organization. I always think to myself, who are these people and where is their money coming from? Maybe it’s my cynical side coming out, but I usually assume that behind the scenes there are a bunch of organizations fighting over market share and a pile of money.
Most discussions about the nonprofit sector usually focus on the needs of traditional donors, whether they are individuals or professionals, and charities that are providing public services.
But there are thousands of nonprofit organizations that are organized to serve very narrow subjects. One of my pet peeves, for example, are the nonprofits organized by elected officials, a subject that I think doesn’t get nearly enough attention. Some of these charities do terrific work, but many serve little purpose other than to attract donations which ultimately serve only the interest of the elected official.
I’m not talking about advocacy groups per se. I support the right of 501(c)(3) nonprofit organizations to advocate for their points of view and the passage of legislation to benefit their cause, within the guidelines of the IRS. We all need to be ever vigilant so that our rights aren’t watered down. We also have the 501(c)(4) category for those nonprofit organizations that want to undertake major, sustained lobbying efforts.
No, what I’m speaking about are those nonprofits where the funding source is nebulous, executives are overlapping, the activities are unclear, and—worst of all—the names of the organizations are misleading. I think these types of nonprofits breed public mistrust and have a negative effect on charitable giving in general.
The Washington Post had a front-page story yesterday looking at organizations lobbying for changes in health care titled "How interest groups behind health-care legislation are financed is often unclear." The first two paragraphs of the piece lay out the premise:
Many of the Washington interest groups that are seeking to shape final health-care legislation in the coming weeks operate with opaque financing, often receiving hidden support from insurers, drugmakers or unions.
The groups, some newly formed and others reappearing with different sponsors, have spent months staging noisy protests, organizing letter-writing campaigns and contributing to a record $200 million advertising blitz on health-care reform.
I asked Chuck McLean, GuideStar’s V.P. of research, and his assistant, Carol Brouwer, to dig into the GuideStar database to see what we could learn about the organizations mentioned in today’s article. They found that most of them are either charitable—501(c)(3)—or lobbying—501(c)(4)—organizations and in the GuideStar database. But the 990s and other tax documents available from the IRS don’t really tell you very much about the funding sources of these organizations. This is an obvious case where going beyond the IRS data is absolutely essential.
These organizations are not required to disclose to the public the sources of the contributions they receive. So if the fictional Society for Compassionate Care for the Elderly is a nonprofit that is lobbying for the Congress to pay for nursing home care for any senior who needs it, we have no idea if the money that pays for the lobbying comes from thousands of concerned individuals or from the business interests that stand to make a fortune if the lobbying efforts are successful. It isn’t clear to me that anonymity of donors is fair to us in instances like these. What do you think?
Posted By Bob Ottenhoff on October 13th, 2009, in these categories: Health Care | Public PolicyI’ve been disappointed in the tone of the public debate on health care reform. Rather than have a reasoned discussion about different approaches to this complicated and difficult issue, we seem to be bombing each other with slogans and sound bites.
Sunday’s Washington Post has a front-page story that says, "The nation’s political discourse seems sour, angry, even dangerous," and that "‘uglier than it’s ever been’ is a phrase often volunteered" in this debate. The article reminds us that we’ve always had cycles of unruly political discourse, starting from the founding of our nation. What may be different today is that the Internet and cable television can much more easily spread over-the-top rhetoric (which, as the article points out, is often financially lucrative.)
George Will, the frequently grouchy conservative columnist, takes well-off liberals to task in his Sunday column, suggesting that "our vocabulary is composed exclusively of references to rights, a.k.a. entitlements." In the health care debate, Will observes, "Each proposal must be invested with the dignity of a right. And since not all proposals are compatible, you have not merely differences of opinion but apocalyptic clashes of rights." I think his observation holds equally true for conservatives and liberals in the health care debate.
A recent column by Roger Cohen in the New York Times brought this all into focus for me. "Whatever may be right, something is rotten in American medicine. It should be fixed. But fixing it requires the acknowledgment that, when it comes to health, we’re all in this together. Pooling the risk between everybody is the most efficient way to forge a healthier society." But Americans hear "pooled risk" and think, "Hey, somebody’s freeloading on my hard work."
Concludes Cohen, "Americans, born in revolt against Europe and so ever defining themselves against the old Continent’s models, mythologize their rugged (always rugged) individualism as the bulwark against initiative-sapping entitlements. We’re not talking about health here. We’re talking about national narratives and mythologies—as well as money. These are things not much susceptible to logic. But in matters of life and death, mythology must cede to reality, profit to wellbeing."
One of the things I like about working in the nonprofit sector is that there is an explicit commitment to thinking of others, not just our own well-being. We donate because we want to share our resources with others, often those less fortunate than us. We volunteer because we have skills and energy that can help others. We work for nonprofit organizations because it is an opportunity to serve others and make this a better world. The health care debate could use a little less complaining about me and mine and a lot more talk about you and us.
Posted By Bob Ottenhoff on September 25th, 2009, in these categories: Health Care | Public PolicyI’m still trying to decide how health care cooperatives work and whether they can reach the scope and scale that our health care system needs to introduce some of the reforms that are being discussed.
Last week I interviewed Steve Delfin, executive director of the National Credit Union Foundation, who told me about how credit unions work. His blog on this issue is interesting. We learned from him that cooperatives are owned and controlled by their members—the people who use the co-op’s services or buy its goods. Any surplus revenues are reinvested in the business.
Steve also recommended an interesting Web site, the National Cooperative Business Association, or NCBA. Here’s a link: http://www.ncba.coop/abcoop_health.cfm. The site has a lot of interesting information on why NCBA thinks cooperatives can work for health care delivery. On it I learned that there are about 30,000 cooperatives in all, and that they have a significant impact in four sectors of the U.S. economy: agriculture and food, credit unions, mutual insurance, and rural electric. But not health care!
NCBA reports that there are four kinds of co-ops. Every model has at least a few examples of health care services.
- consumer-owned co-ops (credit unions and rural electric co-ops)
- purchasing cooperatives (hospitals buying equipment together)
- worked owned cooperatives (there are several in home health care)
- producer cooperatives (such as Land O’Lakes)
Unfortunately, the impact of consumer-owned health cooperatives today is relatively small. The NCBA estimates that approximately 2 million Americans are member owners of consumer-owned health-care cooperatives.
The NCBA identifies some important unanswered questions that policy makers will need to address:
- Will the co-ops be seeded by government grants or will they be loans?
- How much control will the government exert?
- How much time will the government give to get health care co-ops started?
- Will the co-ops be allowed to form into a federated co-op on a national scale?
- Will there be minimum federal standards that supersede state law?
- What laws would regulate regional co-ops?
These seem like pretty difficult and complicated issues to solve. What do you think?
Posted By Bob Ottenhoff on September 18th, 2009, in these categories: Health Care | Public PolicyNonprofit medical cooperatives still seem to be in the picture as an alternative to the so-called public option as part of the medical reforms being discussed.
In my last blog on this issue, I mentioned there are very few co-ops in the GuideStar database, and I expressed some doubts about the capabilities and scalability of creating new nonprofit co-ops to provide health services. To learn more about how co-ops work, I contacted a friend, Stephen Delfin, who serves as the executive director of the National Credit Union Foundation. Steve says that "credit unions are not-for-profit, member-owned financial service cooperatives. The thread between different types of coops is the non-profit, member-ownership stature and commitment to social responsibility."
He says they all operate with a commitment to the following principles:
- Open and voluntary membership
- Democratic control
- Non-discrimination
- Service to members
- Distribution to members
- Building financial stability
- Ongoing education (financial)
- Cooperation among cooperatives
- Social responsibility
Steve also told me that the co-op is a "business model uniquely positioned to tap into the post-economic melt-down psyche of Americans. Whether in health care or financial services, the business motives of cooperatives are not profit, but service to members." He discusses the cooperative model in a recent blog.
After talking to Steve, the concept of a nonprofit health co-op sounds a little more intriguing to me. Wouldn’t it be great to be a member of an organization focused solely on providing me and my family with excellent health care, rather than fighting through all the paperwork and bureaucracies that exist in health care today?
In my next post, I’ll take a closer look at how current health co-ops work.
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