Judith Bell

Recent Articles

Saving Their Assets: How to Stop Plunder at Blue Cross and Other Nonprofits

Huge nonprofit corporations are now being converted to for-profit companies, to the immense benefit of corporate insiders. But they can't take charitable assets with them. A victory in California shows what the public should insist upon.

F irst it was hospitals and nursing homes, ambulatory care centers and health maintenance organizations (HMOs). Now it is Blue Cross plans and major teaching institutions. In an accelerating rush to the marketplace, many of America's largest health care nonprofits are being converted into profit-making organizations. As this wave continues—and nothing, currently, seems likely to stop it—billions of dollars in charitable assets are at risk. If we follow one course, state regulators and an aroused public can at least force converting nonprofits to transfer the value of their assets to new charitable foundations. But if regulators fail to act, the charitable legacy will be lost and more executives of nonprofits will become overnight millionaires by capturing the assets for themselves and their investors. Recent experiences in California and Georgia illustrate the contrasting possibilities. California now has two new grant-making foundations with a total endowment of $3.3 billion,...