Financial Assistance for Patients with Medical Conditions

This manual describes the step-by-step procedures by which ImpactMatters analyzes financial assistance for patients nonprofits. We recommend reading the program analysis methodology first.

Program subtype

We categorize each nonprofit by its patients’ disease subtype: (1) cancer (of any kind); (2) kidney disease; (3) and life-threatening, chronic or rare diseases. For nonprofits that provide assistance to patients of multiple diseases, including cancer and/or kidney disease, they are categorized under “life-threatening, chronic or rare diseases.” All subtypes follow the same program analysis methodology, and as such, the following sections will refer to patients financial assistance programs as a single program type.

Dollar value of financial assistance to patients

We record the dollar value of financial assistance provided by the nonprofit to patients. This value is usually present in the Form 990, Schedule I, Part III, but may also be found in financial statements, annual reports or nonprofit websites. Often, financial assistance reported in the Schedule I is also reported in Part III, Line 4a of the Form 990. When these numbers are consistent across both locations, we simply take the value of financial assistance as reported. However, in some cases, this value may not be reported consistently. When this occurs, we take the following steps to determine what value to use:

  • We initially look at the value as reported in the Form 990 Schedule I Part III, and if the grants are detailed and broken down into different areas of how the money is distributed, then we use the value as reported there.

  • If the Form 990 Schedule I Part III contains a single line that describing financial assistance in general terms (e.g., “cash grants to patients” or “financial assistance to patients”), we then use the value that appears most frequently across different fields of the Form 990, annual reports and financial statements.

  • If different numbers are reported equally, we use the financial assistance value that is reported in association with the number of patients served, to ensure these values are in alignment. In general, this means the Schedule I, but the number of patients assisted can also sometimes be found in Part III Line 4 or an annual report.

  • For nonprofits where we are unable to make a decision after steps 1-3, we look at the previous year’s 990 to see if there is any additional or clarifying information, and use that if so. This is because some organizations change their reporting methods or their structure across years, which may change how they describe the value of financial assistance that they provide.

  • If we are unable to use a value after the following steps, we disqualify the nonprofit for inconsistent data.

In addition to financial assistance, nonprofits may also provide patients with assistance in kind (e.g., flights to seek treatment, wheelchairs). We include this in-kind assistance in the total amount of financial assistance to patients, provided that the nonprofit reports a dollar estimate of its in-kind assistance. We do so on the assumption that in-kind assistance is also effectively a boost to income: it allows patients to save money in one area of expenditure and, instead, spend the savings in another.


Beneficiary costs

In the ideal case, we use costs clearly labeled as associated solely with the patients financial assistance program. This is most frequently found in the Form 990, Part III Line 4a, but also may be found as a line item in Part IX, “Statement of Functional Expenses.”

Nonprofits may give out other grants in addition to those grants dedicated to financial assistance to patients (e.g., grants to institutions for cancer research). They may also give grants to patients for reasons other than reducing the financial burden of health care (e.g., scholarships provided to cancer survivors, granting “wishes” to sick children). We isolate the grant amount exclusively dedicated to helping alleviate the financial burden of a patient suffering from a disease. If program costs include the cost of administering all types of grants, we calculate the proportion of grant money dedicated to financial assistance and multiply it by program costs. This allows us to isolate the program cost associated only with the financial assistance component.

Additional services

Some nonprofits lump together the costs of financial assistance with the costs of other services provided to recipients of financial assistance, such as vacation retreats for patients and counseling sessions.

If the nonprofit has itemized its costs, we simply subtract the costs of the above extra services from the starting figure for program costs.

If the nonprofit has not itemized its costs, we apply a 5 percent discount to program costs for each extra service provided. E.g., if an organization provides emotional support/therapy to patients in addition to financial assistance, we would factor out 5 percent from the starting figure for costs.

Ratings adjustments

We exclude all nonprofits where less than 50 percent of a dollar gets transferred to patients for financial assistance. Our reasoning for this is that if we estimate that a nonprofit is paying more than twice as much for a program as it disburses, this likely due to incorrect or inconsistent measurement or data reporting rather than an actual reflection of its impact. It may be due to costs that are grouped together or overly vague descriptions. We do not provide ratings for these nonprofits unless we can verify that their costs and grants are accurate.

To rate the cost-effectiveness of financial assistance programs, we apply our standard benchmarks for programs that aim to boost the income of beneficiaries:

  • 4 stars: Programs that boost income by 85 percent as much as total program cost

  • 5 stars: Programs that boost income by 150 percent as much as total program cost

Under this set of benchmarks, our analysis yields no 5-star ratings for programs providing financial assistance to patients. Lacking evidence from the research literature, we are limited to estimating only the immediate and pecuniary benefit of financial assistance for patients and can only speculate about its potential future and nonpecuniary benefits. As such, our estimate of attributable outcomes includes only the amount of the transfer itself. Because our estimate of cost includes both the amount of the transfer and any costs to administer the transfer, no financial assistance programs achieve 5 stars with the above benchmarks. However, we recognize the social importance of these programs, which address the very real problem of staggering costs of medical care in the country. To fairly represent financial assistance programs, we adjust upwards the star ratings of the highest-performing among the rated programs. Specifically, programs that boost income by at least 85 percent as much as total program cost are awarded 5 stars in total. Programs that boost income by between 70 and 85 percent of total program cost are awarded 4 stars in total. Programs that boost income by less than 70 percent of total program cost or less are awarded 3 stars.