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Establishing a Related Foundation


Does it Make Sense for a Health Center?

Year Developed: 2023

Resource Type: Publication.

Primary Audience: C-Suite (CEOs, CFOs, CIOs, CMOs, COOs, etc.); PCAs
Secondary Audience: Board of Directors

Language(s): English

Developed by: National Association of Community Health Centers (See other resources developed by this organization).

Resource Summary: This issue brief discusses the reasons that a health center may want to establish a “related foundation” and addresses how a health center can establish a related foundation, including the measures that should be taken to minimize risk to the health center in doing so.

Resource Details: Health centers that are private nonprofit corporations typically are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code (“IRC”) as a public charity. Aside from the exemption from income tax, another benefit is that gifts and contributions to the health center may be tax deductible by the donor, thereby providing an economic incentive for the donor to make a contribution. Notwithstanding that they enjoy these benefits, several health centers and other charitable organizations have established separate, but related, foundations that also are tax exempt under section 501(c)(3).

Resource Topic: Finance, Operations

Resource Subtopic: Administrative Policies, Capital Development.

Keywords: Policies and Procedures, Risk Management.

This project is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) as part of an award totaling $6,625,000 with 0 percentage financed with non-governmental sources. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by HRSA, HHS, or the U.S. Government. For more information, please visit HRSA.gov.