The Big Story: Tax Exemption Under Fire: A Roadmap for Building Trust
Despite the ubiquitous large numbers tallied up and submitted in 990s and captured for public consumption in annual community benefit reports, public perception does not reflect the reality of the positive community impact hospitals and health systems have in their communities. Provider organizations can actively strengthen their community impact story, and in the process inoculate against attacks and build a network of advocates to activate in times of need.
Getting the Story Right
By Isaac Squyres & Tim Stewart
3-minute read
The term “community benefit” can be a proxy for a lot of things. Sometimes it may refer to community clinics. Other times to uncompensated care. It can mean education, access to healthy food, mobile care. And so much more.
For legislators, it’s increasingly used as a window into whether hospitals deserve to keep their tax-exempt status.
Against the backdrop of threats to Harvard University and others, the question of whether nonprofit institutions deserve their tax exemptions has gone from the fringes to the front page. If revoking tax-exempt status is now viewed as an available tool for “reining in” nonprofit institutions, hospital and health system leaders should take seriously that lawmakers could make an example of nonprofit hospitals.
In this context, chances are the way you’re talking about community benefit is not quite right.
Earning – and keeping – trust requires meeting or exceeding the expectations people have of your organization. And that requires not just doing the right thing but talking about those things in the right way.
Our latest research reveals this chasm:
The public has high expectations for hospitals when it comes to providing community benefit… But in their minds, hospitals are falling short.
There’s a way to bridge this gap by better demonstrating the impact you’re having.
The national survey of 1,000 adults offers not only a clear look at the gap between expectation and perceived reality, but also a roadmap for closing it. The results show that specific elements of community benefit and a comprehensive story drive public perception and support of hospitals having tax-exempt status.
Many of our survey’s questions explore how community benefit ties into tax-exempt status for nonprofit hospitals, but the lessons apply to providers of all types. Because “providing enough community benefit” fosters trust. And trust matters regardless of business status.
A few findings from Tax Exemption Under Fire: A Roadmap for Building Trust:
- While nine in 10 say that it’s important that local hospitals provide community benefit services, just 40 percent say hospitals in their area provide enough.
- There’s a gap between what people value and what they perceive providers to be doing. Last year’s survey showed strong majorities think specific elements of community benefit are in fact valuable…This year, we found that less than half say hospitals are doing enough of those things.
- A handful of specific community benefits have the greatest impact on support of hospitals having tax-exempt status. Focusing on those things moves the needle.
- Also, each aspect of community benefit that is perceived positively multiplies impact on perception. Put another way, the more comprehensive the story, the greater the impact (1+1+1=5).
- Seeing positive news about hospitals is closely linked with having a favorable view of the impact they have.
What does this tell us?
The way the industry is talking about community impact today is not effectively building trust or communicating the significant value hospitals are delivering.
It’s too fragmented, often relying on one-off messages and discrete moments rather than a comprehensive, ongoing campaign approach. To wit, in multiple Jarrard consumer surveys going back to the end of 2023, seven out of 10 people say hospitals are mostly focused on making money vs. taking care of people.
Today’s approach relies too much on technical definitions of community benefit and the impressively large – (but often disputed) – numbers listed in the 990s. It focuses on the wrong things. Not wrong because they are invalid, but because they don’t resonate with the public.
As you work to strengthen trust in your organization, consider these two suggestions:
- Make it about actual human impact. Be deliberate in assessing what is making the biggest impact and resonates the most in your community. Tell that story in human terms, not in huge numbers.
- Build a comprehensive, sustained campaign: Prioritize the things you’re doing that matter most and make them the centerpiece of a larger message about all the impact you’re making. Tell the story consistently over time. Be relentless. Positive news and positive perception go hand in hand.
Ending on a positive
The good news?
Provider organizations are, in fact, making a tremendous, positive impact on the communities they serve. The things that taxpayers want in exchange for exempt status are things that nonprofit hospitals are largely already delivering.
With the right communications approach, you can earn trust, strengthen your brand, inoculate against attacks and build advocates. It’s about aligning the work, messaging and stakeholder engagement to close the gap between (mis)perception and reality.
