Last week, the Lown Institute released its 2024 Fair Share Spending Report, which seeks to measure community investment for nonprofit hospitals across the nation. However, the report only compares select portions of what the Internal Revenue Service (IRS) considers community benefit to a roughly estimated value of tax exemption. Lown analyzed the IRS filings of for over 2,400 nonprofit hospitals for the filing year 2021. According to the report, about 80% of nonprofit hospitals contributed less to their communities than they save through tax exemptions, for a combined deficit of $26 billion. The report has been criticized by various hospital associations due to its methodological biases and exclusion of investments that the IRS counts as community benefit from their calculations.


In order to calculate the estimated value of hospitals’ tax exemptions, Lown relies on a study that found nonprofit hospitals on average saved roughly 5.9% of overall expenses in 2012 (predating implementation of the Affordable Care Act) through their tax-exempt status. This may be the easiest way to calculate estimated tax savings, but it fails to take into consideration the wide variances in tax standards between states and even localities, which creates inaccuracies in determining what a hospital’s fair share of community investment would be.

The Lown report also fails to accurately capture the full scope of hospital community benefit because it excludes Medicaid shortfalls, as well as costs associated with health care education and research from its calculations; both considered a community benefit by the IRS in the Form 990, Schedule H – which Lown relies on for this report. The report also fails to consider the benefits of the nonprofit hospital business model, such as investments in service lines and facilities that for-profit hospital systems often avoid, such as offering organ transplant programs and behavioral health services.

AHPA Representation

On average, all hospitals studied spent 3.87% of their total expenditures on community investments. Of the top 10 health systems deemed to have a fair share deficit, six were faith-based. Within the report, one AHPA-member system – Adventist Healthcare – was ranked as a best health care system for its fair share spending surplus. Of the top-performing hospitals listed, 10 were from AHPA-member systems:

  • Adventist Health and Rideout – Marysville, CA
  • Adventist Health St. Helena – St. Helena, CA
  • Adventist Health Tulare – Tulare, CA
  • AdventHealth Gordon – Calhoun, GA
  • AdventHealth Murray – Chatsworth, GA
  • AdventHealth Central Texas – Killeen, TX
  • AdventHealth Rollins Brook – Lampasas, TX
  • Adventist Healthcare Fort Washington – Fort Washington, MD
  • Adventist Healthcare Shady Grove – Rockville, MD
  • Adventist Healthcare White Oak – Silver Spring, MD

Lown’s Recommendations

As part of the report, the Lown Institute outlined several policy recommendations, including establishing a minimum threshold for community benefit spending (similar to Texas and Oregon), defining a national financial assistance policy for hospitals, establishing enforcement provisions, and expanding reporting through the IRS Form 990, Schedule H reports.

In response to the Lown report, the American Hospital Association addressed its concerns with the methodologies used by the Lown Institute and also points out that in 2020, for every $1 of tax savings, nonprofit hospitals reinvested $9 back into their communities.