There is a seemingly intractable disagreement about whether nonprofit hospitals can be meaningfully differentiated from their for-profit counterparts and are therefore still deserving of exemption from federal income tax. Nonprofit, tax-exempt hospitals are intended to be organized and operated for charitable purposes. What this means and requires has evolved from providing relief for the sick and poor to promoting community health and more. At the same time, these institutions have evolved into complex, highly regulated business organizations, some of which struggle to differentiate themselves from their for-profit competitors. The history of American hospitals from almshouses to today’s complex health care systems includes, and is better understood in the context of, the stories of how women’s hospital auxiliary organizations built, supported, and evolved with hospitals.

While acknowledging the enduring debate regarding exemption, this article attempts to address the question of how to fill the charitable gap if exempt hospitals were to lose or voluntarily relinquish their preferred tax status. The article recommends preserving the ability to address community and individual health needs through charitable hospital auxiliaries. Auxiliaries are uniquely situated in an increasingly commercial healthcare market, due both to their history and community connections, to hold and direct the use of charitable assets, to accept tax-deductible charitable contributions, and to address unmet community needs.