Charitable Organizations

In recognition of their charitable contributions to the community, the Internal Revenue Service (IRS) does not require charitable organizations—such as libraries, museums, universities and non-profit hospitals—to pay federal income taxes, as described in Internal Revenue Code (IRC) Section 501(c)(3).

As a charitable organization, each hospital must promote health as its charitable purpose, measured by a community benefit standard. The IRS will consider any combination of the following factors, including whether the hospital:

Operates a full-time emergency room that provides treatment regardless of ability to pay
Provides non-emergency services to Medicare and Medicaid beneficiaries
Has an open medical staff, consistent with the size and nature of the hospital
Has a governing board that includes independent civic leaders drawn from the community
Serves a broad cross section of the community through medical training, education and research programs
Has a formal charity care policy

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