How Nonprofit Hospitals Limit Charity Care

Nonprofit hospitals are required to provide charity care, financial aid and community benefits in return for their nonprofit status. The term, “not for profit,” is a misnomer. Nonprofit hospitals must earn a profit or go out of business. Nonprofit is a tax election. Nonprofit hospitals pay no state or federal income taxes. They pay no sales tax, no property tax and get preferential bond rates. Nonprofit hospitals can also accept donations from wealthy donors, who get a tax deduction and possibly their name on a building. It is a sweet deal.