What it Means to be a Not-for-Profit Organization

The term not-for-profit refers to charitable organizations, such as Ascension Howard Young Health Care (AHYHC), that have a mission to serve all patients, even those who cannot pay.  AHYHC offers as many services as possible; even those services that are more mission driven rather than revenue driven.  For Howard Young Medical Center in Woodruff, WI and Ascension Eagle River Hospital in Eagle River, WI, that mission results in emergency departments that offer care 24 hours a day, 7 days a week.  They are not just accessible during the more profitable daytime hours.

Every penny that comes into the hospital is used for the primary purposes of the hospital.  It also means the community is the beneficiary of any profit the hospital earns and that no individual profits from that revenue.

Charitable, not-for-profit hospitals constitute the overwhelming majority of hospitals throughout the United States.  For-profit hospitals do exist and the distinguishing factor is that these hospitals are privately owned and their goal is to earn revenue for their investors.  As a result, many offer only profitable services and do not offer care to those who cannot pay.  Charitable, not-for-profit hospitals are driven by the needs of the patients and not solely by the profits that may be earned.

How does Ascension Howard Young Health Care (AHYHC) earn its revenue and for what purpose?

Any revenue in excess of costs from operations supports the hospital.  If there was no excess revenue, there would be no funds to purchase new equipment or implement new technology.  Facilities would be not maintained and no improvements could be made.  It’s essential for all hospitals to be profitable, even in a charitable, not-for-profit environment.

Another way to generate income is to borrow funds, but loans must be paid back with interest.  This is not a viable way to provide ongoing support for a hospital, but is often necessary in today’s healthcare environment.

A third way to fund a hospital’s mission is with investment income.  If a hospital has a large endowment, the interest can mean the difference between survival and closure.  Yet, not all hospitals are fortunate to have significant endowed funds.  The Howard Young Trust established in 1972 was a very generous and prudent gift from Mr. Young.  Ascension Howard Young Health Care continues to benefit from that Trust and the income helps ensure residents and visitors have necessary care.

Healthcare philanthropy is the fourth way income can be earned.  This income results in bottom-line dollars.  Bottom-line dollars are those that go directly toward programs, services and the technology needs of both hospitals served by the Howard Young Foundation.  Charitable, not-for-profit hospitals began as philanthropic institutions with the primary purpose of meeting the healthcare needs of their communities.  That purpose still holds true today for Ascension Howard Young Health Care in northern Wisconsin.