What Is Community Benefit?


Community Benefit

is the legal term that refers to a broad spectrum of charitable services, activities, and resources that nonprofit
hospitals and health systems allocate to meet their tax-exempt requirements.

A Brief Background

Most hospitals in the United States operate as nonprofit organizations, making them eligible for tax exemption. In exchange for their tax-exempt status, these hospitals are expected to provide benefits to communities. This obligation was codified by the IRS in 1956 and for a long time, these benefits were primarily in the form of free and discounted care for the poor.

In 1969, the IRS introduced the term "community benefit" to encompass a broader range of services and activities a tax-exempt hospital could count to meet their charity obligations. It now includes things such as preventive services, training health professionals, research, and a category called community health improvement. This includes activities and strategies activated outside of the hospital and in the community itself, including partnerships with local community organizations.

In 2009, the IRS revised the reporting requirement for all tax-exempt hospitals to document in more detail how they have allocated their community benefit resources. This creates an important opportunity to generate dialogue about how to best align and focus resources to advance health and well-being, particularly with a lens to health equity.

To learn more of the history and details of community benefit go to Community Benefit Insight.


An Opportunity to Work and Win Together

A reexamination of how and where community benefit resources are allocated offers a tremendous opportunity to build healthier communities. The vast majority of what hospitals report as community benefit is still in the form of free and discounted clinical services, mostly to treat conditions that could have been prevented.

At the same time, the evolution in health care financing is moving towards a model that creates incentives to keep people healthy and out of hospitals. This creates an opportunity to explore partnerships with hospitals to align resources and accelerate the shift to prevention.

Community benefit data and its thoughtful analysis enables a range of community stakeholders to have strategic conversations about where and how resources are allocated to address health in their communities.


Explore Community Benefit Insight

Community Benefit Insight provides a useful starting point to understand how hospital charitable resources are allocated.


Get Technical Assistance

To interpret and analyze community benefit data, overlay with supplementary resources, and identify strategic alignment of priorities and resources.


This new resource provides searchable community benefit data for nonprofit hospitals across the country.


Community benefit data is most powerful when analyzed in your community’s context. CACHE provides this.