The Association between Board Composition, Board Governance and Charity Care Provided by Nonprofit Hospitals

• In Event: Nonprofit Governance

Abstract

In this study, we examine the association between board composition, board governance and charity care provided by nonprofit hospitals. First, we investigate whether the composition of nonprofit hospitals' board of directors is associated with governing decisions related to charity care. Then, we examine whether nonprofit hospitals' boards' governing decisions are associated with the amount of charity care provided. These research questions are motivated by legislators’, regulators’, and taxpayers' interest in better understanding how nonprofit hospitals behave in terms of their charitable mission (Kennedy, Burney, Troyer and Stroup 2010). Using archival data, we analyze a relatively homogenous group of nonprofit hospitals' 990 tax returns along with corresponding hospital and socioeconomic data. Overall, we find a positive association between nonprofit hospital board composition (i.e., boards with a greater percent of medical doctors and independent board members) and board governing decisions related to charity care. We also find a positive association between nonprofit hospitals board governance decisions (i.e., stronger discount charity care decisions and having open accessibility to financial reports) and the amount of charity care provided.

Authors

• Linda Ragland, University of New Hampshire

• Catherine Plante, University of New Hampshire