New Hampshire charities and other nonprofit entities find themselves facing many new challenges as 2025 begins. There are a host of issues and examples.
The well-publicized recent purchase of Catholic Medical Center, New Hampshire’s second largest hospital, and the reasons for it, highlight the ever-changing challenges facing New Hampshire hospitals, almost all of which are now part of affiliated groups or out-of-state institutions.
COVID-related financial issues, which resulted from a hiatus in being able to offer the most profitable services, have forced many of these affiliations or acquisitions. The purchase of CMC by for-profit Hospital Corporation of America (HCA), saved the hospital from imminent bankruptcy or closure, and was a study in how state regulation, religious identity and economic reality can all come together and yet yield a successful outcome.
This followed HCA’s purchase of Frisbee Hospital in 2020. Other mergers, like Exeter Hospital and Beth Israel Leahy and Wentworth-Douglass and Mass General, also demonstrate how the issue has been handled in the state recently.
State and federal budgets have tightened significantly since the days of COVID funding grants coming from the federal government, providing unusual income to the state and nonprofits. Those funds have ceased, and the deficit created at the federal level has created pressure to cut government spending.
Coupled with the flurry of Trump executive orders, many of which threatened to or actually did cut spending and grants and other federal programs, nonprofits all are watching carefully to see if their contracts will be funded.
Whether the Trump orders hold up and are effective, there will be a continued effort to control the debt and deficit. In an environment that makes increased revenue (read: taxes) unlikely, that means cutting federal spending and much of the available cutting is in programs that fund nonprofit services.
On the state level, Gov. Ayotte inherited a deficit situation, probably caused by a combination of loss of federal monies, and also state tax cuts enacted by the last Legislature. This will probably mean reductions in state program spending, which largely is administered by private nonprofits in New Hampshire.
Both the federal and state governments fund the Medicaid program, probably the largest provider of funds for medical care to those in need. Any reduction in Medicaid rates and payments will have a major impact on nonprofit providers, hospitals, substance abuse and other entities, as those rates already are inadequate to meet actual costs.
The Legislature is unlikely to pass major new spending, and one wonders why it would consider additional spending on vouchers for education either at existing levels or with increased or even universal availability, at a time when budget constraints exist.
The state’s higher education institutions, both public and private, face additional challenges. Continued declining high school graduation rates, estimated to peak in 2026 at about 26% fewer graduates than there were in 2008, mean increased competition for fewer customers.
Add to that the state budget issues, and the public institutions of the University System and Community College System of New Hampshire face possible level or reduced public support.
All institutions, public and private, are concerned about the Trump threats to eliminate the Department of Education and some or all of its programs, and it’s expressed hostility to higher education in general. Add all that to the evolution in delivery systems for higher ed, such as online and hybrid education, and the amount on the plates of college boards of trustees is substantial and worrisome.
Finally, both on the state and federal levels, the Ayotte and Trump administrations have announced commissions, headed by former governor Craig Benson, former car dealer Andrew Crews in New Hampshire, and Tesla CEO Elon Musk on the federal level, to be unelected budget-cutting entities searching for efficiencies and savings.
While this is an admirable and necessary goal, and undoubtedly there are savings to be identified in government at all levels, charitable and other nonprofit organizations will be watching to make sure that they do not recommend changes that threaten their existence or viability. Everyone will be worried about how this is being done. Whether either level of government is legally able to implement proposed changes without legislative action already is the subject of federal litigation and undoubtedly will be the cause of more.
All of the above should or will be on the minds and agenda of boards of directors and trustees of New Hampshire nonprofit charitable, educational and health care organizations starting immediately. These matters should have the attention of all citizens, as they affect us all.
We live in uncertain and interesting times.
Brad Cook is a Manchester attorney. The views expressed in this column are his own. He can be reached at bradfordcook01@gmail.com.
