Life as a not-for-profit
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“When you are in business to make a profit, sometimes there is pressure to make decisions for short-term gains to meet analysts’ expectations and keep shareholders happy. But when you are in the not-for-profit sector, you are able to take a more long-term view and, I think, make better decisions.”

That, as Ed Barnes sees it, is one of the big advantages of FirstHealth of the Carolinas’ status as a not-for-profit health care network. Barnes is chairman of the FirstHealth of the Carolinas Board of Directors.

Of course, being a not-for-profit enterprise doesn’t mean that FirstHealth has no money left over after paying salaries and paying its bills. Instead of using some of its “profit” to pay shareholders, however,
FirstHealth uses it to expand and improve its facilities and services, and to invest in local communities.

“We take very seriously our obligation to give back to our communities and to do whatever we can to make them better, healthier places,” says Charles Frock, FirstHealth’s chief executive officer.

In fact, FirstHealth has an entire department, Community Health Services, whose mission is “to identify unmet needs in the community, develop interventions and secure resources to address those needs.”

Community Health Services often partners with other community-based organizations to seek grants for initiatives aimed at promoting the health and well-being of the people in FirstHealth communities.

The three FirstHealth hospitals—Moore Regional, Montgomery Memorial and Richmond Memorial—provide free care to people who are unable to pay, as nearly all hospitals do to some extent. But because the FirstHealth hospitals are not for profit, they also can keep costs as low as possible for all patients.

Foundation support
FirstHealth has a family of charitable foundations that provide critical support for health care facilities, equipment and services. Under the umbrella of the Foundation of FirstHealth are Moore Regional Hospital Foundation, Richmond Memorial Hospital Foundation, FirstHealth Montgomery Foundation and FirstHealth Hospice Foundation. Donations to each of these foundations are tax-deductible.

“The generosity of people in our communities enables us to have a margin of excellence that otherwise would be difficult to achieve,” Frock says. “It means we don’t have to worry day to day about how we are going to meet our expenses. We can do so much more.”

Robin Cummings, M.D., chairman of the Moore Regional Hospital Foundation board, believes that people are generally more willing to donate to a not-for-profit organization.

“When I go out to talk to people about giving, I can always tell that it sits well with them to know that we are not for profit,” he says. “It makes my job easier to be able to tell them that any profit we make is turned back into patient care and community services. It’s not used to pay board members or to answer to stockholders.”

Spending money that people contribute brings a special responsibility of stewardship. Donors want to know that their money is being handled carefully and used wisely.

“Our first priority is to make sure donations go only for the purposes for which they are intended,” Frock says. “Second, if there are funds that we don’t expend right away, we want to invest them prudently, but not so cautiously that they don’t grow.”

An Investment Committee that is made up of community volunteers recommends investment policies and oversees investment reporting to the Foundation of FirstHealth’s governance board.

“Often, people give because they want to provide for future generations,” Frock says. “They don’t give selfishly to get something in return right away. They want to make sure that the institutions and services they value will not only still be here, but will be even better and stronger, many years from now.”

“Community-owned”
Kathleen Westover, president of the Foundation of FirstHealth, says donors and board members understand that, as a not-for-profit enterprise, FirstHealth truly is owned by the community.

“Because of that, they have even more of a vested interest in how FirstHealth operates and how successful it is,” she says. “They understand that community contributions really do make the difference between good health care services and services that exceed what most communities have.”

Making financial contributions is one way that people in the community support the mission of FirstHealth. Another way is to give of their time, knowledge and judgment as members of a FirstHealth board. Since FirstHealth is not for profit, board members are volunteers whose only interests are the health of the organization and the welfare of their communities. (See related lists.)

“Many organizations have a more centralized governance structure, but we think it is important to have the various components of the system governed by people who are closer to where the services are being provided,” Frock says. “That is a better way of staying close to your community than having somebody remotely making governance decisions.”

According to Frock, board members also help FirstHealth fulfill its not-for-profit responsibility of community service.

“They let us know their communities’ needs and expectations, and we have an obligation to satisfy those needs and meet or exceed those expectations in every way we can,” he says.

Barnes, the FirstHealth board chairman, previously served on the Moore Regional Hospital Board of Trustees. He says it has never been difficult to find smart, dedicated people to serve on FirstHealth boards and committees, and he attributes that in part to FirstHealth’s not-for-profit status.

“There is so much talent in this area, and people are willing to use their talent to serve the community,” he says. “I have never been turned down by anyone I approached about serving on a board. That says a lot about the organization and the reputation it has.”