IRS documents show Sanford Health made nearly $5 billion during the COVID-19 pandemic

Makenzie Huber, Sioux Falls Argus Leader
·6 min read

Sanford Health filed its IRS form 990 Monday, revealing that former CEO and President Kelby Krabbenhoft split with a cool $49 million from the nonprofit organization.

While such news dominated headlines Monday, the nearly 500-page document offers a glimpse into the nonprofit and its financial dealings, including that the Sioux Falls-based health organization brought in nearly $5 billion from operations amid the coronavirus pandemic. $207 million of revenue earned was through government grants, according to the filing.

Here's what else you need to know about Sanford's latest 990 filing:

What is a 990?

The IRS form 990 is an annually filed form that informs the public about financial operations of nonprofit organizations. The information provided is used by government agencies to prevent organizations from abusing their tax-exempt status.

The form highlights its revenues, expenses, assets and liabilities. A significant portion of the form lists names of officers, directors and highly-compensated employees involved with managing the organization to prove that the nonprofit isn't overly-compensating management.

More: Sanford pays former CEO Kelby Krabbenhoft $49M in 2020, IRS documents show

Where Sanford stands

Sanford Health ended the year with $1.9 billion in assets, which was a jump of more than $372 million from 2019. The organization's total revenue in 2020 was $4.78 billion.

The top three missions of the organization, separated by revenue brought in, include providing regional medical services, research and medical education. Medical services revenue was listed as $4.49 billion.

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Contributions to Sanford Health

In 2019, Sanford Health reported $75.7 million in contributions and grants, but reported more than triple that amount in 2020, with $266.1 million received during the fiscal year.

Over 78% of that total revenue comes from government grants. Another $51 million comes from related organizations and $6.8 million comes from other contributions.

Outlined in the 990, Sanford Health lists 41 contributors with gifts of more than $5,000. Two contributions from individuals included a $2 million donation and a $8.6 million donation.

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Over $600 million from T. Denny Sanford were donated recently to the nonprofit in March 2021 and September 2021. Those contributions are not outlined in the 2020 filing.

In addition to contributions from outside sources, Sanford Health reported $14.6 million because of investment income.

Sanford employee, admin salaries

According to the 990, expenses increased with $4.39 billion reported in 2020 compared to $4.2 billion in expenses in 2019.

Salaries, compensation and employee benefits increased over the past year by $119.5 million.

Krabbenhoft left Sanford last year with about $15 million paid out as separation and another $29.3 million through an executive retirement plan, which was started in 1983 for Sanford executives. Krabbenhoft and Bill Marlette, most recently CFO and treasurer who received $5.9 million from the plan, were the only executives remaining on the plan.

Besides Marlette and Krabbenhoft, seven other Sanford executives who departed the organization in 2020 received either separation or payments. Daniel Blue, with 31 years at Sanford, received $5.3 million; Kim Patrick, with 21 years, received nearly $2.9 million; Nate White, with 16 years at Sanford, received nearly $3.3 million; Mark Lundeen, with 40 years, received $1 million; JoAnn Kunkel, with 28 years , received $6.8 million; and Allison Whierda-Suttle, with 19 years, received more than $2.3 million.

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Also outlined in the 990 were compensations to family members of Sanford leadership who were employed with the organization. Nine total family members of Sanford leadership were compensated, according to the filing:

  • $1.5 million to Annette White, Nate White's wife who left Sanford in May 2020 after serving as senior vice president of general counsel

  • $202,205 to Louis Krabbenhoft, Kelby Krabbenhoft's son who works in Sanford Health's legal team

  • $518,768 to Daniel "Scott" Aberson, who serves as system vice president of legal and enterprise risk management and is related to Micah Aberson, a former Sanford executive vice president.

  • $289,455 to Christina Olson, a family medicine physician at Sanford who is a family member of Nick Olson, Sanford's vice president of finance.

  • $6 million to Everist Health, a personalized medicine company that Sanford Health invested $4 million in 2016 and $2 million in 2018. The information reported in the 2020 filing reflects Sanford's ongoing equity interest in the company, which is about 22.84% of stock, according to Sanford officials. The family of Tom and Barb Everist also have ongoing equity interest in the company.

Contributions to community organizations

In 2020, Sanford Health gave more than $10 million alone to regional colleges, according to the filing.

  • Augustana University received just over $2 million for scholarships, a professorship, Horizon 2030 gift and general support.

  • NDSU received $2.8 million as an annual contribution for its sports medicine programs, nursing programs and scholarships.

  • South Dakota State University and its foundation received over $3.37 million for its orthopedic sports medicine contracts and donations.

  • The University of South Dakota and its foundation received over $2.48 million for its orthopedic sports medicine contracts and scholarships as well.

The Summit League received $1.6 million and the Sioux Falls Sports Authority received $2.8 million for orthopedic sports medicine contracts. Sioux Falls Lutheran School received the highest amount from Sanford among area school systems with $1 million for an orthopedic sports medicine contract.

Millions of dollars were donated by Sanford Health last year to nonprofits, according to the filing, to provide assistance for "COVID-19 food insecurity support. That including over $1 million each to Feeding South Dakota and Great Plains Food Bank in North Dakota.

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Also in the 990, as contributions to domestic organizations, were amounts of $6.6 million to Sanford Health Foundation, $2 million to Sanford Health Foundation North, $1 million to Sanford Health Foundation West, $1.2 million to the Good Samaritan Foundation and $616,000 to Sanford Health Foundation of Northern Minnesota.

Contributions nationally, internationally

Outside of the Midwest, Sanford Health contributed $2 million in general support to the Miami Children's Health System; $1 million in donations to Samaritans Feet, based in North Carolina; and $1 million to the Cura Foundation through the Vatican Foundation.

Outside of the United States, Sanford Health is active as an international organization with clinic operations in Ghana with $3.1 million in expenditures and investments in the region, another $4.2 million going toward Ghana clinic operations since 2012, $1.3 million toward Israel since 2018, and $11.9 million in Germany investments starting in 2015.

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Contributions from Sanford Health are usually tax-free, since they're a nonprofit organization.

Clarification: This story has been updated to better explain Sanford Health's and Everist Health's relationship.

This article originally appeared on Sioux Falls Argus Leader: Sanford Health made billions amid COVID pandemic, IRS documents show