Struggling Hospital Depletes $135M Endowment

Rene Letourneau, for HealthLeaders Media , July 29, 2013

Exactly why the courts would allow LICH to tap into the principal is hard to understand, says Susan Doliner, vice president of development at Maine Medical Center, a 600-bed hospital in Portland.

"I'm not sure how they got the court orders to let them spend those funds. It is unusual because you are required to permanently restrict those funds and never spend the original principle," Doliner says. "To permanently restrict, that is what endowment means. ... That principal must always stay in hand according to accounting guidelines and the fiduciary responsibility of the institution."

Interest from the principal provides an income stream, and that is the only revenue that should be spent, Doliner says. "You would never touch the principal, which will grow over the years."

What is even harder to understand is why LICH would break one of the fundamental codes of philanthropy and go against the express wishes of the donors.

Doliner says it is "absolutely important" for hospitals to spend donations in the way donors intend.

"Rule number one is that our job is to professionally steward the assets of the institution. We must make sure the funds are spent in the way the donors intended. If you make a gift to cardiology, our job is to make sure it is spent on cardiology," she says.

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3 comments on "Struggling Hospital Depletes $135M Endowment"

Steven (7/31/2013 at 5:38 PM)
What they did did was borderline criminal if not outright incompetent. I would wonder what the executives at the hospital are earning as they make these irresponsible decisions.

Steve (7/30/2013 at 5:03 AM)
I will be direct and to the point. LICH, which was owned by Continuum Health Partners, went to court to break the endowment. SUNY Downstate which took over LICH became responsible for repaying the money back and has stated that they will repay this money only when and if they are able. As to LICH losing money neither Continuum or SUNY has opened the books on LICH. All these points are easily searched.

Michelle Alicia (7/29/2013 at 3:01 PM)
Rene you have not researched your fact well; neither have you researched the background information and court cases surrounding this issue; your article is both false and misleading.




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