2007 Spring, Pg. 68. The Endowment for Health: Six Years of Service and Counting.

AuthorBy James W. Squires

New Hampshire Bar Journal


2007 Spring, Pg. 68.

The Endowment for Health: Six Years of Service and Counting

New Hampshire Bar JournalSpring 2007, Volume 48, No. 1Health Care & the LawThe Endowment for Health: Six Years of Service and CountingBy James W. SquiresI. Introduction

More than 40 years ago, former U.S. Attorney General Robert F. Kennedy remarked upon the overwhelming social inequality and injustice of his day. Seeking to provide words of inspiration, he chose a message of personal commitment that could lead to incremental change.

"Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current which can sweep down the mightiest walls."(fn1) These powerful words still provide inspiration as we look at the issues of social inequality and injustice of our day. Indeed, we have mighty walls to sweep down in our country and in our state, not the least of which is the barrier to health and health care.

The last six years have witnessed a major shift in the priorities of organizations such as the Endowment for Health. Federal and state budgets are becoming increasingly strained. If left unchecked, health care spending will represent nearly 20 cents out of every dollar Americans spend by the year 2016, far outstripping the growth of the U.S. economy.(fn2) This mounting pressure on the system is forcing foundations to use their resources for support of public policies. As a result, foundations must understand the role of government toward those who suffer from life's infirmities and the best use of not-for-profit resources. For the Endowment for Health, infirmities mean issues of health. These issues prompt us to use our voice to send out a ripple of hope to those who cannot find optimism in their lives because they cannot tear down the barrier to health on their own.

  1. The Starting Point

    The creation of the Endowment for Health(fn3) (the Endowment) occurred when nearly all nonprofit insurance providers had disappeared. The issues that surrounded the sale of New Hampshire Blue Cross and Blue Shield to Anthem Insurance in 1999 underscored the debate over who owns the assets from the sale of a nonprofit health plan to a for-profit corporation. The New Hampshire Attorney General's Office had been intimately involved in the transaction. The outcome ultimately led to the creation of the Endowment, New Hampshire's version of a health care conversion foundation - a growing national trend. In forming this foundation, the Attorney General had clearly done his homework. Nine public hearings(fn4) were held throughout the state to consider the public's views concerning how the Endowment should be structured and how its funds might be allocated in accord with its mission of improving the health and reducing the burden of illness for the people of New Hampshire - especially the vulnerable and underserved. These early efforts proved invaluable.

    "What several observers describe as the 'largest redeployment of charitable assets' in history offers significant opportunities and potential risks . . . The creation of more than 110 health care conversion foundations, established when nonprofit hospitals or health plans were sold or converted to for-profit status, has pumped billions of dollars into health care philanthropy . . . .The relative secrecy surrounding many early conversion transactions led to a good deal of controversy. In the recent past, notes Anne L. Schwartz, Ph.D. of Grantmakers In Health, "not a lot of attention was paid to how nonprofit assets were valued and what was done with them, and the community got angry."(fn5)

    Clearly, on the continuum of health care conversion foundations, the early structure of the Endowment was based on the principles of fairness and concern for serving the needs of New Hampshire. The Attorney General (Phillip S. McLaughlin) and the head of the Division of Charitable Trusts (Michael S. Delucia) deserve credit for getting it right. These efforts were complemented by the work of the newly formed Board of Directors and Advisory Council who spent the first year further defining the Endowment's governance structure.

    The Endowment, Board of Directors, Advisory Council, and staff have worked tirelessly since 2001 to create a foundation that is in tune with the needs of our state. We take our role seriously as stewards of the public's money - exercising great care in how these assets are managed and invested. We also set about establishing a fair and thoughtful process for grantmaking and programmatic work as well as ensuring integrity concerning our ongoing involvement in matters of public policy. The Endowment's assets have grown substantially to $100 million.

  2. Grantmaking - A means to an end

    Many who come to work at foundations for the first time wonder, "How hard can it be to give away money?" They soon realize, however, that grantmaking is not an end to itself but a tool to accomplish a mission. Therefore, a rigorous process for reviewing proposals and making grants is necessary, along with an understanding of the difference between charity and philanthropy. The two terms, often seen as interchangeable, are very different pursuits.

    "Foundations should primarily concentrate on philanthropy (root causes) as opposed...

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