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But the need to operate profitably has a downside, in that some projects Ð while needed Ð don't help the bottom line at the Paynesville Area Health Care System (PAHCS), which is why the Paynesville Area Hospital Foundation was formed.

After more than a year in organizing, the foundation board met for the first time in January.

PAHCS CEO Willie LaCroix told the board that he suggested establishing a foundation a dozen or so years ago, when the hospital was still owned by the city of Paynesville. Even after a hospital district was formed that assumed ownership of PAHCS in the early 1990s, administration faced the same problem: tracing money from donations to insure that they go towards the intended purpose.

The idea of establishing a foundation was approached again over a year ago, and the hospital board gave its approval to explore it.

"The goal of this entity is to create a vehicle for people who want to give," said Doug Ruhland of Eden Valley, who as the vice chair of the hospital board is the CEO of the foundation.

Membership on the board will include the officers of the regular hospital board (chair, vice chair, secretary, and treasurer) as well as the chief of the medical staff, who will serve on both the hospital board and on the foundation board. Currently these positions from the board are chair Don Thomes of Zion Township, vice chair Ruhland, secretary Diane Rothstein of the city of St. Martin, and treasurer Carolyn Swyter of the city of Paynesville. Dr. Randy Nelson has just started a two-year stint as chief of staff.

The foundation board will also have four public members who will serve two-year terms. Initial board members are Dr. Ray Lindeman, Richard Fleischhacker, and Don Torbenson. The board currently has one open position.

One of the immediate tasks of the foundation will be to receive, invest, and track the donations that PAHCS regularly receives. In its last fiscal year, more than $25,000 was donated to PAHCS. "You'll be surprised. There's money that comes in every month," said LaCroix. "All that money will now come to this foundation."

The foundation will be the repository for donations, memorials, and bequeaths, large and small. The foundation will try to be included next year in the Paynesville Area Charity Fund Drive.

The board will be responsible for investing funds wisely, for keeping the foundation in the public eye, and for giving directions for donations that might not be cash. A similar foundation in New Prague, for example, has received a house in California as a donation.

Part of the foundation's function will be to maintain separate funds for donations. For instance, should 700 Stearns Place need a new bus, a special bus fund could be established by the foundation.

Foundation dollars will not be used for general operation, unless extreme circumstances arise. "If we needed to do that we wouldn't be prudent operators," said Ruhland. "We've been prudent operators for a long, long time."

A major benefit for donors will be the foundation's tax-exempt status, which means that donations to the foundation will be tax deductible. The foundation has earned 501(c)(3) status from the Internal Revenue Service as a nonprofit corporation.

In addition to handling donations that come in, the foundation may coordinate fund drives. At their first meeting, Lindeman, who practiced medicine in Paynesville for more than 40 years, suggested the construction of a chapel in the Koronis Manor as an initial project. The Paynesville Lions Club, where Lindeman is also active, has already expressed interest in the project, and Lindeman suggested the foundation could approach other Lions chapters in Lake Henry, St. Martin, and Richmond (which also belong to the hospital district) about helping.

"That's exactly what we're trying to do with this," said LaCroix. "Instead of having the hospital board do that, this board needs to do it."

While PAHCS needs to look carefully at the profitability of all its capital expenditures, the foundation will be able to fund projects whose main focus isn't profit. "I think it's that extra something that we need to raise funds for," said Ruhland. "That extra program. Because there are things that people want that aren't revenue producing."

A chapel in the Koronis Manor is a prime example of a need that has been somewhat ignored on account of its negligible profitability.

"I don't think we'll have any problems finding projects," said Swyter. "Every time you turn around there's something we need."

Eventually, the foundation could build up a big enough reserve to serve as an endowment fund. Then it could actually help with larger capital improvement projects like building space and hi-tech equipment. While PAHCS has been very profitable in recent years, it does carry a large debt to fund its recent expansions.

Many hospitals across the state and nation have foundations that help pay for capital improvements.

The foundation board will meet monthly on the first Tuesday of every month at 8 p.m. in the Blakely Room at the hospital. Its annual meeting will be held on the fourth Wednesday of January, after the hospital board's organizational meeting at 8 p.m. Its meetings are open to the public.