Community benefit reporting demonstrates accountability for community investments, communicates progress toward addressing unmet health needs and disseminates community benefit activities to community stakeholders.

Legal Requirements

Each year, tax-exempt hospitals are required to report IRS financial data and answer questions that track compliance with the 501(r) rules on Form 990 Schedule H. In addition to federal community benefit reporting, some states have reporting requirements for hospitals located in their state to maintain state tax exemption.

The federal government and 23 states require reporting of community benefit activities with associated financial valuation.


Transparency promotes accountability and builds community trust, and awareness of and input on community benefit decision making increase transparency. In the current health care environment, there is an increasing focus on accountability and transparency in nonprofit organizations. A lack of clarity about the charitable obligations of tax-exempt health care organizations has mobilized policymakers, regulators, health advocates and organized labor across the country to increasingly examine charitable practices at nonprofit hospitals. Hospital boards, senior leaders and community benefit staff are responsible for demonstrating that investments of charitable resources impact community health.

Questions for Hospital Boards – Community Health Needs Assessments

  • How was the community engaged to provide input on the hospital’s Community Health Needs Assessment?
  • What are the emerging health issues in the community?
  • What health needs will the hospital address in the Implementation Strategy?
  • How does supporting these priorities relate to the hospital’s strategic plan and budget?
  • How does the Implementation Strategy address the community’s unmet health needs and specifically support the vulnerable populations in the service area? How are stakeholders from these communities involved as partners?
  • In what ways can trustees participate in supporting the hospital’s community benefit priorities?

Communicate With Your Target Audiences

Community benefit has a number of target audiences, and it is important to compile reports for them. A partial list of stakeholders that may benefit from targeted reports include the public, community organizations, elected officials, hospital governing boards, community benefit oversight committees and hospital leadership.