Maximizing the Gift

by Jeff Ellis

The Greater Kansas City Metropolitan Community is the beneficiary of a wonderful gift. It comes in the form of philanthropic dollars from conversion foundations. Like many gifts, this one presents an opportunity which demands the entire community’s attention and effort to nurture it to the fullest potential.

Kansas City has long been recognized as one of the most philanthropic cities in the country. Its United Way campaign traditionally meets goal year after year. Its Greater Kansas City Community Foundation has grown exponentially over the last several years and ranks as one of the largest and most active in the United States. The legacy of Kansas City’s many family foundations is renown.

Many of the family foundations in KC focus on health care concerns of Kansas City’s residents. But the recent proliferation of so-called “conversion foundations” dedicated to health issues provides an enormous boost to our community’s ability to meet the health needs of its populace and a unique challenge and opportunity for our philanthropic community to invest those dollars wisely.

Conversion foundations are created when non-profit business activities convert to for-profit status, typically through the sale of the non-profit’s assets to a for-profit business. The non-profit’s assets, having been dedicated to a public trust, must be preserved for the purposes of that charitable trust. Consequently, the proceeds of the sale of such assets are typically paid into a foundation to be managed by a board of concerned citizens for the designated public purpose and monitored by the state attorney general as protector of the public trust. Most have been created within the last ten years.

In this region, the recent trend giving rise to conversion foundations began with the sale of the non-profit Wesley Medical Center in Wichita to the for-profit HCA hospital chain in 1985. That sale resulted in the creation of The Kansas Health Foundation and the United Methodist Health Ministry Fund. The conversion of Blue Cross and Blue Shield of Kansas to a for-profit insurance company in 2000 gave rise to the Sunflower Foundation: Health Care for Kansans. These foundations are dedicated to addressing the health care needs of all Kansans. Similarly, the conversion of Blue Cross and Blue Shield of Missouri to for-profit status in 1999 spawned the Missouri Foundation for Health dedicated the health issues here.

Locally, the sale of Bethany Medical Center to Columbia/HCA in 1997 resulted in the creation of the Wyandotte Health Foundation to serve the health needs of residents of Wyandotte County. And, most recently, the sale of the Health Midwest hospital system to HCA last year has led to the creation of The REACH Healthcare Foundation for the Kansas side of the metro region and the Foundation of Greater Kansas City dedicated to Missouri side metro health issues. Both of these foundations rank among the top ten in total assets among area foundations and charitable trusts.

This proliferation of conversion foundations, most notably the formation of the two foundations resulting from the Health Midwest transaction, is having a profound impact on our community. Arguably, there is in excess of $1 billion now available to influence the health status of Kansas City residents when the assets of these conversion foundations are considered in connection with the resources of the Community Foundation and various family foundations.

The need for charitable resources to address community health concerns has never been more acute. The ranks of the uninsured and underinsured swells daily. This country’s health care system provides the best, most technically advanced care available in the world; unfortunately, that care is not readily available to all. The health status of Americans ranks low among the industrialized nations of the world. Employers can’t keep up with rising health insurance costs for their employees. The load of non-paying patients weighs heavily on hospitals and doctors. Hospitals and doctors, natural allies in the rendition of care, find themselves competing for increasingly more limited health care reimbursement. The availability of affordable health care was one of the major issues in our last national election.

The philanthropic community may not be able to fix a badly broken health care system, but it can draw attention to the problem and address the needs of the most vulnerable in our community. With the new charitable resources available through conversion foundations, the philanthropic community has the opportunity to make a profound difference and, concurrently, a bold statement about how these resources will be invested.

Many independent, front-line agencies in the metro area perform heroic deeds daily, addressing health care issues consistent with their individual stated missions. Charitable foundations help fund these activities through the pursuit of their individual visions and missions. But to actualize the potential which now exists, we must find ways to coordinate philanthropic endeavors to maximize the impact of the dollars invested.

The need for better coordination of our city’s charitable resources was identified in an Industry Outlook Round-table sponsored by the Kauffman Foundation and Ingram’s just before Thanksgiving. Funders and providers of health care services shared concerns and ideas. Mutual interests started to be identified. The representatives of the gathered organization were challenged to find better ways to match funding to needs to achieve the greatest Community impact. Unfortunately, only the briefest beginning could be made in the time. The conversation must continue.

Our community is challenged by geographical boundaries, governmental divisions and cultural diversity. The community conversation must bridge those divisions if we are to ever come close to making measurable improvement in the health status of Kansas Citians. The tremendous resources now available can provide the impetus to overcome all boundaries and divisions.

Bridges are being built. The Alliance of Greater Kansas City United Ways brought the combined resources of the community’s United Ways to bear on community-wide needs within six issue areas: Youth, Young Children, Seniors, Families and Neighborhoods, Self-Sufficiency and, certainly not least, Health. The purpose of these facilitated discussions was to identify the goals within each issue area which will guide the United Ways’ investment in the entire Community in order to achieve the greatest impact for positive, measurable change. Because of the diversity of interests represented in those discussions from throughout the region, the process was tedious and difficult. But as a result the conversation was open and thorough, the resulting broad consensus for each issue team was validated and, consequently, the process gained broad Community support. The process will continue in the future.

The United Way community discussion is instructive as the philanthropic community seeks to build on the small steps taken at the Ingram’s Roundtable. Funders at the Roundtable identified that at least two foundations had made the problem of obesity in our society a focus. Perhaps a coordinated investment by those foundations in the study of that health issue can yield substantive change in the health habits and status of Kansas Citians. Measurable success would lessen dependence on the traditional health care system. Many other opportunities for coordinated endeavors are evident; drug, alcohol and tobacco abuse being among the most obvious.

While our society grapples with various attempts to change health habits and promote healthy life styles, safety-net providers throughout KC confront acute and chronic health care needs for the uninsured and underinsured each day. These safety-net providers, such as health clinics, community hospitals and health and welfare agencies throughout the city, have created probably the best example of cooperation, leveraging dollars to the great advantage of these agencies and the populace they serve.

With seed money from federal and private grants, safety net providers in Kansas City, MO formed Kansas City Care Network which created a computerized data base of the medical records of those served called KC CareLink. As a result, a patient through one of the safety-net providers can access needed care from other providers in the system, and the medical record can consistently be developed and shared among different providers. The enhancement of care for these individuals is obvious and the care they receive is more comprehensive and complete. Their health status is improved as a result.

Now, even more impressively, the KC CareLink product is being implemented with safety-net providers in Wyandotte County. The state line has been removed as a barrier, the benefit has been expanded to twice the number of providers and patients, and the needs of the greater community are better served.

As a Community, we need more successes like the Kansas City Care Network, we need more community conversations like the United Ways’ issue team discussions, we need to expand on the start made at the Ingram’s Roundtable. From the funder’s perspective, we owe it to those who had the vision to establish charitable foundations to effectively and efficiently invest in the health status of our residents to achieve the greatest impact possible. From the agency perspective, we owe it to our staffs and those we serve to gain the greatest good from the effort expended. From the perspective of the Greater KC Community, we need to maintain and improve the health care status of us all, especially the most vulnerable. It is part of the glue holding us together as a community; our shared concern for the well-being of our neighbors.

This is not a philanthropic community-business community issue. It is not a north, south, east or west issue. It is not a government versus private sector issue. It is not a Kansas versus Missouri issue, a hospital versus doctor issue nor an employer-employee issue. It is an issue for all of us. Let’s talk about it!

 

Jeff Ellis is with Lathrop & Gage and specializes in health care law. He serves as a member of the Board of the Sunflower Foundation: Health Care for Kansans, is the chair-elect of the Johnson County United Way and serves on the Board of the Alliance of Greater Kansas City United Ways.