Health Conversion Foundations: How (and When) to Slice the Pie?

By Wayne Luke

Health conversion foundations are not new to healthcare but they are increasingly a by-product of the current era of mergers and acquisitions. These foundations are created to ensure that proceeds from the sale of nonprofit healthcare entities to for-profit organizations are funnelled into core community needs.

What is usually a significant initial endowment for a new foundation can present dilemmas for its leaders and board: How do we spend the money? How much now, how much later? Who decides? It is typical that, early on, many disparate parties want a slice of the health conversion foundation pie.

Wayne Luke of Witt/Kieffer

Wayne Luke

“Hold your ground” is the advice I give leaders and boards of such fledgling foundations. Don’t get out the check book until you have a better sense of the organization’s long-term needs and strategies. What often ends up happening as health conversion foundations mature is that they broaden their vision of “health” beyond healthcare to include the social determinants of health, including education, economic opportunity, and housing. Leaders of these foundations must carefully and pragmatically consider the broad future needs of their communities before they leap ahead.

I recently had the opportunity to speak with reporter Kelly Gooch from Becker’s Hospital Review on this topic. I encourage those interested to read her excellent article, “5 imperatives to consider when starting a health conversion foundation.”

I also recommend “Who Will Lead Health Conversion Foundations?” by my colleague Marvene Eastham.

Wayne Luke is managing partner of Witt/Kieffer’s Not-for-Profit practice. He is based in Witt/Kieffer’s Atlanta office.

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