BY TIM BONFIELD
The Cincinnati Enquirer
Beginning Wednesday, Greater Cincinnati residents will be introduced to a huge new charity -- the Health Foundation of Greater Cincinnati. Boasting a $260 million endowment that will allow it to issue $13 million in grants each year, the foundation is the biggest private health foundation in the Tristate. In fact, it is the sixth-biggest foundation of its kind in the United States.
Never before has Greater Cincinnati witnessed such a sudden and large influx of money for charity. As Tristate health leaders buzz about the foundation's potential to make a difference, agencies already have started lining up for grants.
"We will be able to have a huge impact," said foundation chairwoman Janet Reid.
Health leaders say this foundation could become a powerful agenda-setting force.
"This organization has strong leadership and strong acceptance in the community," said Malcolm Adcock, Cincinnati health commissioner. "The key will be sustaining new directions long enough to see results." The Health Foundation of Greater Cincinnati is a new organization, but its roots trace back 20 years.
In 1978, the ChoiceCare Foundation was formed by area physicians to create a non-profit health maintenance organization -- then considered a highly experimental concept.
Then in 1995, ChoiceCare converted itself into a for-profit HMO. At that time, the HMO set aside an endowment for the foundation to be used for health education, disease prevention, and promoting cost-effective care.
Last year, the foundation's endowment leaped fivefold when ChoiceCare was sold to Humana Inc. for $250 million. When the deal closed last fall, the foundation that gave away $10.5 million in its first three years was capable of giving away $13 million every year.
"We went from being a medium-sized grant-giving foundation to suddenly being a very large one," said foundation vice president Patricia O'Connor. "We knew right away that we would have to be a much different organization."
What started as a corporate-controlled charity with a heavy emphasis on promoting managed care had transformed into an independent charity with a new name and a much wider mission.
"One of the reasons we changed our name was because people were still assuming we are a corporate philanthropy," Ms. O'Connor said. "We were talking with agencies who told us they didn't have any clients with private health insurance so they "knew' we wouldn't give them any money."
The foundation spent several months getting organized. Volunteer staff became paid staff, and more people were hired. Trustees were added to expand the foundation's community representation.
Then came the hard part: deciding how to spend all that money.
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About the foundation
Background: Founded in 1985, when the non-profit ChoiceCare health plan converted itself into a for-profit plan, the recently renamed foundation grew fivefold last year after the $250 million sale of ChoiceCare to Humana Inc. Since 1985, this agency gave out a total of $10.5 million in grants. Now, the foundation will be giving out about $13 million every year.
Mission: The foundation serves a 20-county area that reaches into Kentucky and Indiana. Its four priority areas are strengthening primary care for the poor, school-based health programs, substance abuse and severe mental illness.
Projects: Recent grant winners have included the Postponing Sexual Involvement program run by Children's Hospital Medical Center; a yet-to-be-constructed health education center; school nurse programs; a mobile health van serving the homeless; and a new program at Queen City - Mitchell Mental Health Service to serve people with mental health and substance abuse problems.
Officers and trustees: Janet Reid, president of Global Lead Management Consultants, chairwoman; Don Thomas, director of Hamilton County Department of Human Services, vice chairman; Donald Hoffman, president and chief executive of the foundation; Daniel Geeding, vice president of finance of the foundation; Patricia O'Connor, vice president of programs of the foundation; Douglas Thompson, Frost & Jacobs, secretary; Mina Jefferson, Frost & Jacobs, assistant secretary; Michael Abrams, Cincinnati Financial Corp., treasurer; Sheila Adams, president and CEO of Urban League of Cincinnati, trustee; Jerry Grundhofer, president, chairman, CEO of Star Banc Corp., trustee; James Long, math professor, Cincinnati State and Technical College, trustee; Dr. Robert Maltz, past president of Academy of Medicine of Cincinnati, trustee; Robert Morgan, president and CEO of Cincinnati Financial Corp., trustee; H.C. "Buck" Niehoff, partner, Peck, Shaffer & Williams, trustee; Dr. Michael Schmerler, Riverhills Healthcare, trustee; Dr. William Schubert, retired chairman, Children's Hospital Medical Center, trustee; Ruth Westheimer, longtime community volunteer, trustee.
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The foundation's four focus areas for grants are: expanding primary care services to the poor, supporting school-based health education, and improving services for substance abusers and for those with severe mental illness.
Those goals were set after a series of surveys, focus groups and meetings with health professionals, community leaders and regular citizens.
"We wanted to focus on areas where there were significant needs but we wouldn't be duplicating work," said foundation president Donald Hoffman.
So far, the foundation has won praise for its priorities, especially its focus on substance abuse and mental illness.
"Those areas are ripe for new thinking and new initiatives," Dr. Adcock said.
"Selecting these issues as priorities gives them a lot of credibility in the general community," said Nan Franks Richardson, executive director of the Alcoholism Council of the Cincinnati Area. "There is still so much stigma attached to substance abuse and mental illness." The Health Foundation will serve a 20-county area that reaches out to Clinton, Highland and Adams counties in Ohio; Gallatin, Grant, Pendleton and Bracken counties in Kentucky; and Ripley, Ohio and Switzerland counties in Indiana.
This region goes well beyond the eight-county United Way service area. However, the territory more accurately reflects the Tristate medical market because people in these outlying areas often look toCincinnati for specialized care, Mr. Hoffman said.
"In many of the outlying counties, there are no hospitals, there are fewer agencies. . . . There's just not as much health care infrastructure as there is in Hamilton County," Mr. Hoffman said.
Conversion foundations
The emergence of the Health Foundation of Greater Cincinnati reflects a growing national trend.
The Health Foundation is one of 81 "conversion foundations" nationwide that were formed by the sale of non-profit hospitals and health insurers to for-profit companies. Combined, these foundations boast more than $9 billion in assets.
Ohio has seven such conversion foundations, Kentucky has one and Indiana has one. None is as big as Cincinnati's Health Foundation.
In general, the proceeds from selling a non-profit organization cannot go to individuals. The money must be returned to the community, which is usually done by creating a non-profit foundation.
Conversion foundation endowments range widely, from as little as $4 million to nearly $4 billion. Some, such as the 1996 conversion of Blue Cross and Blue Shield of California, have created multibillion-dollar statewide charities. Others, especially those created by hospital sales, can funnel tens of millions into much smaller, much more local territories.
However, many of the conversion foundations are so new that their impact on local communities cannot be judged. Of the 81 conversion foundations formed since 1973 in the United States, 40 of them have been formed since 1995.
The Health Foundation has 15 voting trustees and eight officers, with three trustees serving as officers.
The board reflects a mix of health, business and community leaders. Among them: the top executives of Star Bank and Cincinnati Financial Corp., three doctors, the director of the Hamilton County Department of Human Services and the president of the Urban League of Greater Cincinnati.
Most of the trustees are white men. But Ms. Reid, the board chairwoman, is African-American. Of the two other female trustees, one is black and one is white.
Four trustee positions have not been filled.
Ms. Reid said she thinks the board has a strong commitment to diversity. But board members were invited because of their skills and commitment to improving community health.
"We don't have a lot of people with big egos. We have people who are bold, passionate and really care. We have board members with track records of looking at the big picture," Ms. Reid said.
This year, the Health Foundation plans to award about $7 million in grants, of which $2 million has yet to be awarded. The amount is smaller than the $13 million planned for future years because the endowment has been invested for less than a year.
With that kind of money to spread around, It may not take long for Greater Cincinnati to feel the impact of the Health Foundation grants.
"This type of foundation is important because Washington and Columbus aren't in the business of fixing local health problems any longer, not that they ever really fixed many problems in the first place," Dr. Adcock said. "If there's ever to be solutions to local health problems, it's going to be through local programs." CP:Rodney House, 6, is checked Friday by nurse Grace Walker at Project Succeed Academy. The foundation supports a clinic at the North Fairmount school.
