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Most big companies donate to charity—but that doesn’t turn those businesses into charities themselves. This matters because charities don’t pay income taxes and often get additional tax breaks. Even a generous business is still a business. Unless it’s a hospital.
A new report by Save Our States shows that giant hospitals abuse their tax-exempt, charitable status. They invest overseas while laying off healthcare staff at home. They pay multi-million-dollar salaries to top executives while demanding more subsidies from taxpayers. These hospitals have billions of dollars in revenue and spend a tiny fraction of it on charity care.
Consider the famous Mayo Clinic. Investigations by the state of Minnesota show that it spent less than one percent of functional expenses on charity care during a period when it filed hundreds of debt-collection lawsuits against its patients. It pays its CEO several million dollars per year and, in 2023, announced a $5 billion project to “reimagine” its main campus.
Our report, which examines 14 major nonprofit hospitals and health systems, shows that Mayo Clinic is not an outlier, but an example. These are big businesses. When tax law lets giant hospitals pretend to be charities, it distorts the marketplace and shifts costs to the rest of us.
Read our full report here.