Why this $15M gift to an LA hospital is so unusual

While a $15 million gift presented to Los Angeles-based Martin Luther King Jr. Community Hospital from the Weingart Foundation and the Ballmer Group last week hasn't garnered much attention, it's actually quite unique and should capture philanthropist attention, according to Inside Philanthropy.

Last week, the two organizations pledged $7.5 million each to support physician recruitment at the Southern LA hospital. The hospital is located in one of the poorest parts of the metropolitan area, and few physicians choose to start practices here, often causing residents to seek basic care in emergency rooms.

The gift is unique because out of all the charitable giving that pours into healthcare organizations, about $33 billion annually, very little goes toward ensuring low-income populations and people of color have access to basic care. Further, many of the philanthropic gifts from wealthy donors like Steve Ballmer, the former CEO of Microsoft and LA Clippers owner, do not go toward underserved communities. Instead, many of today's generous donors send their largest gifts to their alma maters or top-tier big city hospitals where they received treatment.

There are numerous examples of this type of giving; notably Koch Industry Vice President David Koch's $100 million gift to New York City-based New York-Presbyterian Hospital, where he was once a patient and now serves as a board member; Former Merck President and CEO Roy Vagelos', MD, $250M donation to New York City-based Columbia University's medical school, where he obtained his medical degree; and hedge fund billionaire Jim Simons who has poured millions into autism research due to family experience.

While there's nothing wrong with giving back to these top-tier hospitals, alma maters or familiar health causes, according to Inside Philanthropy, donors often forget to make investments in under-funded, under-resourced institutions that serve low-income communities, such as MLKCH or community colleges.

It is these underserved populations and under-resourced institutions that need funding to help mitigate health disparities. In particular, in Southern Los Angeles, it is estimated that 1,200 physicians are needed to close the gap in care and about half of the patients seen at MLKCH report they don't have a regular physician.

Donations like the ones to MLKCH will help more people have access to a regular physician.

More articles on healthcare finance:
The impact of hurricanes, the revenue loss, the tough leadership decisions: 5 questions with Schneider Regional Medical Center CFO Scott Nothnagel
Martin Luther King Jr. Community Hospital receives $15M to support physician recruitment
Massachusetts community hospital posts 32nd consecutive operating surplus in FY 17

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