Foundations created over three decades by the conversion of nonprofit health-care organizations to for-profit status have become a big business and are helping to shape the communities they serve as well as philanthropy itself, a new survey says.
Since 1973, conversions have produced 139 new foundations – at least 18 of them between 1999 and 2001 – that control $15.3 billion in assets representing nearly $752 million in potential annual grantmaking, says the survey by Grantmakers in Health.
Those assets, down from $16 billion a year ago largely because of the slumping stock market, represent foundations with assets ranging from $1.75 million to $3.5 billion.
Health-care conversions resulting in new foundations have occurred in 33 states and the District of Columbia, although four states – California, Ohio, Colorado and Florida – control more than half the total assets.
California alone has 21 foundations with $6.8 million in assets – and three of those foundations alone control one-third of all new health foundation assets in the U.S.
Ohio ranks second, with 16 foundations controlling $1.1 billion.
Virginia and Pennsylvania each has eight foundations, although their assets trails those of Florida’s seven foundations and Colorado’s five.
Some conversion foundations have become leaders in the field of health philanthropy and learned the importance of community involvement, the survey says — lessons it says other new foundations can apply by seeking community input early and in more aspects of their work.
These new foundations also have become experts in evaluation, communications and setting objectives and outcomes for their work, the survey says, adding that even established foundations can learn from those lessons.
Finally, it says, the new foundations can play big roles in health care and in local communities.
“These foundations are often poised to play important roles in both raising an awareness of community health needs and responding to them,” it says. “While the overall asset base of some of these foundations is small, in many communities, these relatively small foundations are among the largest funders.”