Funding for health care organizations and nonprofits that work to improve social determinants of health is a top priority for all foundations. According to the Center's 2013 report Key Facts on U.S. Foundations, grants for health made up 28% of the total awarded in 2011, more than any other funding area.
An often overlooked source of funding is the health conversion foundation, which is discussed in detail in a new article published in the January 2014 issue of Health Affairs. Titled "Health Legacy Foundations: A New Census," authors Sabrina Jones Niggel and William P. Brandon introduce the term "health legacy foundation" to better point to the unique lineage of these funders. In this piece we'll take a look at these entities and their place in the health philanthropy landscape.
What is a health legacy foundation? Why should my nonprofit be aware of them?
According to Niggel and Brandon, these foundations are created from the assets from the sale, lease, merger, or other configuration of the assets of nonprofit hospitals, health systems, health plans, and speciality care facilities, often creating billions of dollars in new charitable wealth. The results of these conversions are huge: in 2010, health legacy foundations awarded a total of $1.1 billion in grants, with an average of $3.7 million paid out per foundation. These amounts will only increase as more mergers and acquisitions follow in the wake of the Affordable Care Act, so it pays for nonprofits to be aware of these potential funders. The authors do anticipate the establishment of many new health legacy foundations in the near future.
Who gets these grants, and what types are available?
The vast majority of these health legacy foundations primarily award grants to their local communities, supporting the area already served by the converting health care entity. For example, in South Carolina, the Chester Healthcare Foundation was endowed with nearly $29 million from the lease of the local Chester County Hospital and Nursing Center; the resulting grants made from this endowment were limited to Chester County, with an estimated population of less than 33,000 people. Another finding is that these legacy foundations are concentrated in the southern U.S., so those of you in the region served by our Atlanta office should pay even closer attention to these funders.
Operating in a geographically restricted area also influences the types of support provided by these health legacy foundations. A foundation may prefer to award fewer large-scale grants, but in smaller or less affluent communities, there are not enough nonprofits with the expertise to manage large grants. In response to this, many health legacy foundation grants tend to support capacity building and organizational development, a coveted type of funding for small nonprofits wanting to scale up their operations.
In addition, health legacy foundations also opt to address social determinants of health, especially in urban areas, funding social services, housing, mobile and free health clinics, and health reform advocacy. If your nonprofit's mission mirrors these issues, it pays to be aware of these funders.
How can I identify these grantmakers using Foundation Directory Online?
This is explained in our GrantSpace Knowledge Base Article "What is a health conversion foundation? How can I learn more about them?" which states:
To find health conversion foundations, do a keyword searching using the phrase "health conversion foundation". Please note that since health conversion foundations are not categorized separately from other grantmakers by the IRS, this listing may not be definitive.
The article also points to additional resources, primarily from Grantmakers in Health, which published a report in 2009 titled A Profile of Foundations Created From Health Care Conversions that includes a list of them.
What else should I know?
Again, it's best to keep in mind that grant distributions of health legacy foundations are largely restricted to their local communities. So, when investigating these potential funders, focus on those in your state, and ideally, your county of operation. These limits can easily be applied in the Foundation Directory Online.
The authors conclude that this census, which identified over 300 foundations in 43 states, anticipates a wave of new health legacy foundations. We hope this post gives you a jump on your search for sustainable funding in this field. You can read the full article at the New York Library/Learning Center.
Foundation Center, New York