The Role of Healthcare Conversion Foundations in Investing in Population Health

Healthcare conversion foundations (CF) are charitable entities with endowments of varying sizes that are created as the result of a sale of a hospital or health system. Limited current research focuses on the impacts of CF grant-making and philanthropy within the communities they serve. In this study, we use a panel analysis of CF financial information from 2011 to 2021 to characterize CF investments by geography, and as compared to required tax-exempt hospital community benefit spending. Of the 51 foundations included in the analysis, CFs invested over $382 million into the communities they served through contributions, gifts, and grants in fiscal year 2021 alone. On average, CFs invested $20.21 per-capita on contributions, gifts, and grants in their communities, with CFs that serve non-metropolitan areas investing significantly more per-capita than those that serve only metropolitan areas ($32.97 vs $10.09, respectively), although non-metropolitan CFs may represent a larger proportion of overall community charitable investment as compared to metropolitan CFs within a given community. In conjunction with prior evidence, findings from the current study suggest that CF investments in the communities they serve appear to be on a similar scale as community benefit spending of tax-exempt hospitals, although there is significant heterogeneity in spending across both CFs and tax-exempt hospitals. Further understanding of the impacts of conversion foundations within the communities they serve and how they may change over time in response to changing communities, health care context, and regulations is important to understanding the scope and impact of philanthropic funding for population health.