Understanding Community Benefit Programs

What is a Community Benefit Program?

Since the 1950s, nonprofit hospitals have been required to spend a percentage of their budgets on what is known as community benefit. However, state policies on this matter vary.

Many communities struggle with understanding what counts as community benefit. CHA has developed resources including videos and a downloadable manual on community benefit that provide key insights.

Community Service

Community service is a way for people to give back to the community. It is also a great way to meet new friends. Many students are required to participate in community service to graduate high school or become members of certain organizations, such as the National Honor Society. Community service is also a great way to gain work experience or get an internship.

Increasingly, hospital community benefit programs are required by state law as part of the requirements for nonprofit hospitals’ tax-exempt status. Hospitals are expected to invest in the community in a variety of ways, including: net costs of charity care (the unreimbursed provision of free or reduced-cost services); participation in means-tested government programs; health professions education; and research.

State policy reforms could incentivize investments in community-based activities and strengthen hospital-community partnerships. State-level reporting requirements that include more detail and context on community benefit spending would also be beneficial. In addition, more robust policies that address the social determinants of health are needed.


Volunteering is a two-way street that benefits you and the community you serve. It increases social interaction, teaches new skills and helps you feel more connected to others. It also allows you to explore career options like health care, charity work or education.

Local communities need help with things like feeding the hungry, educating children and responding to natural disasters. Taking an elderly neighbor’s dog for a walk, delivering meals on wheels or helping someone shop at the grocery store are examples of volunteering work.

CHA and VHA (formerly Voluntary Hospitals of America) have written resources that explain how to account for and report community benefit activities. These include the What Counts Q&A and Community Benefit Categories and Definitions. They are available on the CHA website. Hospitals and MCOs that have community benefit programs are required to report them to the state. This includes free or low-cost clinics, efforts to promote health education and illness prevention and community development projects.


Education community benefit programs seek to provide a variety of learning opportunities for all community members. These can take on many forms, but often involve community organizations collaborating with schools or government agencies to provide educational resources to their neighbors.

As the health care system transforms, community benefits can be a powerful frame to help accreditation organizations for health professional training programs and state governments set expectations around the advancement of societal goals tied to workforce diversity. The historical and legal antecedents outlined above support this conclusion, but the challenge remains how to articulate these goals in a way that demonstrates an institutional commitment without resorting to fixed numerical quotas.

As a result, it seems appropriate to reexamine how and where community benefit efforts are documented so that the public can gain a more comprehensive understanding of the potential for these institutions to respond to key societal imperatives. The CHA/VHA Social Accountability Budget model (SAB) provides a framework for this type of exploration.

Community Health

Community health encompasses the broad array of charitable services, activities and resources hospitals use to meet their obligations under the Internal Revenue Service’s definition of “community benefit.” This includes free and discounted care for the poor and disadvantaged, but also community-identified priorities such as health professions education and community health improvement.

The ACA requires nonprofit hospitals to complete a community health needs assessment and have an active, written community benefits program. The resulting programs should focus on the social determinants of health that keep communities and specific groups within a community from getting effective healthcare and experiencing overall wellness.

For example, addressing water fluoridation could help reduce childhood tooth decay, and efforts to address obesity in low-income neighborhoods might have a positive impact on heart disease rates. Often, community health programs take into account factors like housing, transportation, food and economic status. Identify the current community health initiatives in your area and ask how you can get involved.

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