Nonprofit hospitals are increasingly asked to prove their worth to the community. If you are involved in nonprofit strategic planning initiatives, it's important to establish a charitable dividend policy, says Hamilton HMC, a healthcare management consulting firm in Atlanta. Hamilton uses a five-step value-based strategic planning approach to help nonprofit hospitals maximize their value to the community that involves:
- Estimating the implicit, market-based costs of capital.
- Determining how much should be reinvested in operations to maintain/create value and how much should be directed to the charitable mission.
- Assessing the hospital's market value given the current strategic direction and capabilities.
- Identifying strategic initiatives that create value by asking the following questions: Is the initiative in line with the organization's mission and vision? Does it create value for the organization or protect value?
- Evaluate and implement charitable initiatives.
(Hamilton HMC, 404/253-0335)