The Cleveland Clinic Is An Oasis Of Prosperity In A Poor City

Image courtesy of Marc Buehler

What obligations do prosperous businesses have to the neighborhoods surrounding them? What if those businesses are nonprofits that are supposed to have a higher purpose? The Cleveland Clinic is an institution in a deteriorating urban neighborhood where residents feel like they’re on a different planet, and the world-renknowned institution is gobbling up more of the surrounding neighborhood as it empties out.

The Cleveland Clinic is building new campuses all over the world, but its main home is a sprawling and constantly growing campus in Cleveland. A feature story in Politico this week examines the relationship between the Clinic and its neighbors, which is generally not warm.

There are fewer people each year in the Fairfax neighborhood that surrounds the clinic, and its campus keeps medical providers and patients separated from people who live in the area. Patients and employees never have to never have to leave for meals or services.

Activities that are theoretically open to neighborhood residents, who are largely poor and almost all African-American, aren’t as open as they seem. Area residents told Politico that they aren’t into the artisanal bouquets at the Clinic farmer’s market, and not many applied to get tickets to hear a speech by the CEO of Microsoft.

While the clinic employs almost as many people in the whole state of Ohio as Walmart, it hires few people from the surrounding neighborhood.

Then there’s health care, which is what you’d think would be an important way for the Clinic to serve its neighbors. While there’s a sparkling new clinic that specializes in diseases that people living in poverty usually have, it replaced an actual full-service hospital in the neighborhood.

“You can come from the Mideast and get a heart, but you can’t run down there” to get basic emergency services, one city councilman for the neighborhood told Politico.

Another sticking point is the Clinic’s tax-exempt status, especially as it continues to gobble more of the city. Not-for-profit entities can say that they serve the community in place of paying taxes, which is great if they actually do.

Since the passage of the Affordable Care Act, the Cleveland Clinic provides less charity care than it used to. (That could change again in the coming years.) If it were a private business, the clinic would likely pay tens of millions of dollars in property taxes.

Some not-for-profits arrange PILOTs, or payments in lieu of taxes, to compensate local governments for areas off the tax rolls. In an interview with Politico, CEO Toby Cosgrove said that he wasn’t about to start making payments until other nonprofits pony up too.

“As soon as they start doing the same thing with the churches and the Salvation Army and the Red Cross and all the other tax-exempt organizations, we’d be happy to do our part,” he said.

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