Museum as Tourist Attraction

An article in the Boston Globe yesterday announced the imminent re-opening of the Boston Tea Party Ship and Museum which has been closed since a fire destroyed its main building in 2007. I was initially pleased to think that a well known and loved non-profit was about to be reopened. As I read further in the article, however, I became confused by the language about loans and investments. A little more digging, and I discovered that the Museum is a for-profit tourist attraction of "Historic Tours of America" whose website describes them as "...an entertainment company which provides historically oriented vacation experiences for our guests..." A for-profit museum. What is the difference between a non-profit museum and a for-profit museum? What does this say for non-profit organizations generally?

My take is that non-profit organizations provide a benefit to the community at large, beyond entertainment. (See my previous discussion of North Shore Music Theater.) So the Tea Party Museum is a tourist attraction that might bring money to the city, but isn't serving a larger social cause. Non-profit museums provide educational and cultural programming to the community. That's why they are granted tax exemptions and why donors may claim deductions. Non-profits must have a community mission. They are supported by donors with a philanthropic intent. For-profits try to make money from users. Non-profits try to provide services to their users, while trying to maintain fiscal responsibility. Sometimes they are also supported by their "gate", the way for-profit entertainment venues are, but they provide much more to the community that ticket revenue doesn't generally pay for - that's why their donors can take those deductions.

What this article taught me is that as philanthropists we must pay close attention to the mission and programming of the organizations we support. And make sure they continue to serve the community - not just the interests of the "owners".

Let's talk about philanthropy and mission. Drop me an e-mail or give me a call.

Focus on mission

My son has just been accepted to a program that sends roughly 100 high school sophomores and juniors from our area to Israel each summer. The Youth to Israel (Y2I) program was created by the Robert I. Lappin Charitable Foundation, whose mission is very simple: "Helping to keep our children Jewish." The program has been in existence for over 40 years, and provides a fully subsidized trip to these students with no means test. The only requirements are that they live in the foundation's service area - one of 23 cities and towns on Boston's North Shore - and the teen must be Jewish and consider him/herself Jewish and be raised exclusively in the Jewish faith.

Until last year Y2I was funded entirely by the Lappin Foundation. Unfortunately, Lappin was one of the victims of the Madoff Ponzi scheme, and the Foundation was essentially wiped out. In other hands this could have led to the end of the program. However, Mr. Lappin is clearly not an average philanthropist. He committed himself to find the funding to keep the program in existence, and last summer 95 kids went to Israel, only six months after the Madoff scandal broke. This summer, Mr. Lappin was able to raise enough money to send to Israel all 99 teens who applied. Gifts have come from the Goldhirsh Family Foundation, the Jewish Federation of the North Shore, Oranim Educational initiatives (the partner organization that provides the tour program in Israel), and an anonymous donor, in addition to the Lappin Foundation's own $100,000 contribution. The total cost of the program is just over $500,000.

Why is this important? Because a local philanthropist refused to throw in the towel and kept focus on his mission. He knew he couldn't provide all the funding right now, and was willing to make the calls necessary to find the funding to maintain a program he is passionate about, and that he feels is crucial to the mission of his foundation. He has said his "long-term plan is to restore his assets to a point that will sufficiently endow the Foundation to a level that the annual income will totally or near totally fund Y2I." Here is the foundation's statement on the future of Y2I.

Mr. Lappin has recently been recognized by the Boston Globe as one of their "Bostonians of the Year." Their reasons have nothing to do with his foundation or the trip to Israel, and everything to do with his handling of his employees' 401K plan, which was also wiped out by Madoff. In short, Mr. Lappin made the employees whole from his remaining personal assets. It is very sad that this action is seen as something unusual in our society. Wouldn't it be wonderful if every business owner and every philanthropist were as true to their missions. At PhilanthropyGlobal we work with organizations and philanthropists. Let us know if you would like help in focusing your mission this clearly!

Nonprofit? hospitals redux

So, there's another article on a nonprofit hospital system in today's Boston Globe. This time it's Caritas Christi Health Care, owned and operated by the Catholic Archdiocese of Boston. If this isn't a nonprofit system, what is?

But again, there isn't a single mention of nonprofit status in the entire article. What we read about is that, "By aggressively cutting costs and boosting revenue from medical care, the Boston-based Catholic hospital chain is on track to post operating income of $31.1 million for the fiscal year ending Sept. 30, compared to a $20.4 million loss last year." ... "The chain consolidated operations at its six Eastern Massachusetts hospitals, cut jobs and froze salaries, negotiated higher reimbursement rates from insurers, and recruited more specialists to perform more complex - and profitable - procedures."

Where is the mission? Where is the care for patients? The whole article is about cutting costs and raising revenues. I don't dispute that hospitals need to operate in the black, but there was a time when they were fully understood to be nonprofit organizations, and when they were not in the black donors stepped in to make up the difference. Nonprofit hospitals were founded by like-minded communities - religious, ethnic, neighborhood, etc., to care for their own. Now it seems all they care about is their bottom line and whether they might be a good candidate for acquisition by a bigger organization.

Is there any way to get back to the basics of nonprofit healthcare? I'm afraid that the issue is colored by our difficulty figuring out how to provide basic healthcare to everyone at a reasonable cost (dare I suggest "single payer"). As long as this situation continues, and hospitals keep talking like for-profit companies, it will continue to be very difficult to make the case for support for nonprofit hospitals. If you need help making the case for your nonprofit hospital give me a call.

Medical Mission

I read an article in the Boston Sunday Globe today that reminded me that the idea of health care being provided by hospitals as a "mission" seems to have been lost. The article talks about the "community benefit" local hospitals provide, and then compares that to the amount of tax savings they realize by being non-profit organizations. It concludes that in general the larger hospitals in Greater Boston save more money by not paying taxes than they provide to the community in benefits. By constantly referring to the hospitals as "companies", and briefly discussing the good being done by one for-profit hospital in Worcester, the article tries to convince us that non-profit hospitals don't deserve their tax exemptions, and that they shouldn't be receiving tax-deductible gifts from donors.

The article describes the calculation of the community benefit and the calculation of the tax savings at some length, admitting that these calculations are complicated, but only in passing does it mention that these calculations may not take into account everything the hospitals do that could provide benefits to the community. Nearly all of the hospitals mentioned are major academic medical centers, which in addition to providing care for all (one of the arguments against them is that almost no one in Massachusetts is uninsured due recent changes in state law), also provide education to a new generation of physicians and on-going research that may lead to cures to some of the diseases being treated. Neither of these activities is "reimbursed" by insurance companies (an unfortunate term hospitals have been using for a number of years.)

One of the problems non-profit hospitals have these days is they have been talking like for-profit businesses for many years. They have also been merging into systems and acquiring medical practices and other ancillary businesses that help make them look too much like for-profit businesses. I would argue, however, that even with all that, non-profit medicine is still crucial to our communities, and that even if Congress manages to pass legislation providing for health insurance for everyone (by no means assured at the moment), non-profit hospitals still have an important mission of education, research, and patient care, and still deserve their tax exempt status. We should all try to remember that non-profit hospitals were created by communities - regional, ethnic, religious, and others - to care for their own because no one else would. They all assumed that good health care was a right that must be provided. As we have changed, and continue to change, the way we pay for our health care, we should keep in mind the history of non-profit health care and its on-going mission. And we should all consider giving to our local hospitals.