States Balk When Nonprofit Groups Go For-Profit

State regulators around the country are becoming disenchanted with nonprofit organizations converting to for-profit businesses, reports Forbes magazine.

Kansas, Maryland, North Carolina, and Washington state have all rejected conversion applications amid fears that a nonprofit group’s mission—providing health insurance to poor people, for example—will get short shrift if the organization goes private.

The conversion trend started in the 1980s with hospitals and health plans and took off in 1993 when California’s Blue Cross plan, with assets worth $3.2-billion, converted to a for-profit entity. While some states will still approve the conversions, the article says, nonprofit officials are having a harder time finding willing state regulators.