Q: Why wouldn't Parkland Health & Hospital System just operate as a not-for- profit organization?

A: Parkland Health & Hospital System does enjoy exemption from federal income taxes under Section 501(c)(3) of the Internal Revenue Code. Consequently it qualifies as a nonprofit organization. As matter of interest, there are 29 nonprofit categories defined under Section 501(c).

In addition to benefiting from exemption from federal income taxes, the hospital system – a political subdivision of the State of Texas – enjoys considerable financial support from ad valorem tax receipts that serve to meet operating cash flow deficits experienced routinely by Parkland Health & Hospital System. Consequently, it has no incentive to forego its political status and become a more traditional nonprofit, such as Overlake Hospital Medical Center, relying heavily on non-public donor contributions for operating revenue and investment income.