Every other nonprofit hospital in this series runs on patient billing and invests its reserve on the side. Shriners Children's does the opposite. It runs on its reserve, a $10.7 billion endowment, and gives the medicine away. Its most recent tax return shows a hospital system built like a foundation: $11.9 billion in total assets, $10.7 billion in net assets, and only about $1.1 billion in annual operating cost, funded from investment income and donations rather than from what it charges the children it treats. It is the clearest illustration in these posts of what an endowment is actually for, and of how completely a market crash can reach into a child's hospital room. Everything below is from the filing and the public record.
A fraternity's hospital, given free
Shriners Hospitals for Children was founded in 1922 as the pediatric charity of the Shriners fraternity, and it built something almost unheard of in American medicine: a network of roughly twenty hospitals and medical centers, across the United States, Montreal, and Mexico, specializing in pediatric orthopedics, burns, spinal-cord injury, and cleft conditions, that treated children regardless of their family's ability to pay (Wikipedia, "Shriners Hospitals for Children"). Since 1922 it has spent roughly $12 billion caring for close to a million children, and it directs about 90 percent of its operating budget to direct child support. For most of its history it did not send anyone a bill, because it had no billing department at all.
The way it could do that is on the balance sheet. Shriners reported $1.84 billion in revenue for the year, but the character of that revenue is what matters: $217.1 million of investment income and $664.5 million of contributions, against roughly $1.12 billion in operating expenses (ProPublica). The institution is not funded by patients. It is funded by its $10.7 billion endowment and by donors, and it spends a modest slice of that enormous corpus each year, the same 5-percent-style discipline an endowment uses, applied to free pediatric care instead of grants. Shriners is, in financial structure, a foundation that happens to operate hospitals.
The crash that reached the hospital room
The risk in that model is the same risk every endowment carries, and Shriners lived through it in a way that changed the institution permanently. In the 2008 and 2009 financial crisis, its endowment fell from roughly $8 billion to around $5 billion, nearly in half (Nonprofit Quarterly). For an institution that funded free care entirely from that portfolio, a near-halving was existential. And so in 2009, after 85 years of billing no one, Shriners made a decision that would have been unthinkable a decade earlier: it voted to begin billing third-party insurance, a capability it rolled out by 2011 (KSL). Families with insurance would now have it charged. But the core promise held: uninsured families still pay nothing, and no child is turned away for inability to pay.
Sit with what that sequence means. A crash in the public and private markets, the same well every institution in this series draws from, cut a children's hospital's endowment in half, and the direct consequence was a change in whether the hospital sent bills. When the endowment is the funding, the market is the funding, and a bad year in the market is a bad year for free care. The other hospitals in this series run on billing and use their reserves as a cushion; a market crash dents their bottom line. Shriners runs on the reserve itself, so a market crash does not dent the bottom line, it reaches all the way to the mission and changes how the institution operates. That is the price of funding free care from a portfolio: the freedom to charge no one depends on the markets staying kind.
For how long
Effectively forever, which is the entire advantage of the endowment model, with the caveat the crash already demonstrated. A $10.7 billion corpus spending roughly $1.1 billion a year, and taking in another $664 million in donations, is not going to run out; it is designed to fund pediatric care in perpetuity, and it has done so for more than a century. Shriners is even expanding, having rebranded from Shriners Hospitals for Children to Shriners Children's to reflect a shift toward outpatient and telehealth care, and having announced a new research institute in Atlanta in 2025 (Shriners Children's). Governed not by a single chief executive but by a fraternal board, it is the rare institution whose financial model matches its mission exactly: a permanent fund, spent slowly, to keep a promise that a sick child's family will not get a bill they cannot pay. The endowment is the promise. The markets decide how comfortably it can be kept, and once, in 2008, they made Shriners rewrite part of it. But the child in the hospital room still does not pay, and the $10.7 billion behind that sentence is the reason.
Related reading
- The Margin Is Thin, the Portfolio Is Not: the other nonprofit hospitals, which run on billing and invest their reserves on the side.
- How Deathless Money Invests: where an endowment funding free care fits in the taxonomy of institutional money.
- The Endowment That Employs Its Scientists: HHMI, the same perpetual-endowment model funding science.
- The Working Ledgers: the market underneath every institution that holds money.
Fact-check notes and sources
- The financial figures (revenue $1.84 billion; net assets $10.74 billion; total assets $11.9 billion; investment income $217.1 million; contributions $664.5 million; roughly $1.12 billion in operating expenses): from Shriners Hospitals for Children's IRS Form 990 for 2024 (EIN 36-2193608) via ProPublica's Nonprofit Explorer.
- The 1922 founding, the roughly twenty hospitals across the US, Canada, and Mexico, the care regardless of ability to pay, the roughly $12 billion spent on nearly a million children, and the roughly 90 percent of operating budget to direct child support: Wikipedia, "Shriners Hospitals for Children", attributed.
- The 2008 to 2009 fall in the endowment from about $8 billion to roughly $5 billion and the resulting decision to begin billing insurance: Nonprofit Quarterly and KSL, which also confirm that uninsured families still pay nothing.
- The rebrand to Shriners Children's and the 2025 Atlanta research institute: Shriners Children's and Wikipedia.
This post is informational, not financial or medical advice. All figures are reproduced from the public filing and the public record. The organization is discussed from the public record as nominative fair use, with no affiliation implied and nothing endorsed by it.
