When the Hospital Is the Town

Every U.S. nonprofit that pays a family member of an officer, director, or key employee has to list that person on Schedule L of Form 990. Most of the time, the resulting disclosures are unremarkable: a spouse in accounting, a brother-in-law doing some contracting.

But in a particular kind of American place, the list gets long. Not because the institution is shady. Because the institution is, essentially, the town.

Sidney, Montana: population 6,400

Sidney is in the northeast corner of Montana, close enough to the North Dakota line that cell service switches carriers on the drive over. Sidney Health Center is the only full-service hospital in Richland County. It has an emergency department, a nursing home, and a clinic. If you live within about an hour of Sidney, and you want a salaried job in healthcare, administration, or clinical support, you essentially work there or you don't work in healthcare.

The 2024 Schedule L for Sidney Health Center lists five family members of hospital leadership on the payroll:

On paper this reads like a bad governance headline: the CEO's husband, mother, and sister-in-law all work at the hospital the CEO runs. The CFO's husband and son work there too. Any critic with a spreadsheet could turn that into a story in an afternoon.

The critic would be missing the place. Sidney has one grocery store, one high school, one coffee shop that stays open past three. It is the kind of town where the CEO and the CFO did not relocate to take the job. They are from there. Their kids went to school with their coworkers' kids. Their spouses are from there. If the hospital refused to hire anyone related to anyone on the payroll, it would simply lose access to a big share of the qualified local workforce, and the workforce would lose access to the only nonprofit employer in the county.

None of that makes the disclosures not worth filing. They are. But the shape of the disclosure is different from what it looks like at first glance. It is not nepotism. It is topology.

Tioga, North Dakota: population 1,500

Tioga Medical Center is in a town so small that its 990 filing lists the entire facility on a single tax form. Its Schedule L names five family members of board members on the staff payroll:

• Hannah Odegaard and Hannah Valliere, both listed as family of board member Brodie Odegaard (~$166,000 combined)
• Marissa Mickelsen and Lori Olson, both family of board member Lee Olson (~$119,000 combined)
• Anna Nordloef, family of board member Seth Wisthoff

Three different board members. Three different family clusters. In a large urban hospital this pattern would raise immediate questions about how board seats get filled. In Tioga, it is the predictable consequence of a board being drawn from the same pool of civic-minded locals that the hospital hires from. The board member and the staff member are often cousins because everyone in town is related at two removes.

The board member and the staff member are often cousins because everyone in town is related at two removes.

Rocky Boy's Reservation, Montana

Rocky Boy Health Center serves the Chippewa Cree Tribe of the Rocky Boy's Indian Reservation. Its 2024 Schedule L discloses seventeen family-member employees, totaling roughly $1.7 million in compensation. That number, coming from a reservation clinic of modest size, would look alarming if read out of context.

The context: the Rocky Boy's Reservation has a population of roughly 3,300 people, almost all of whom are enrolled members of a single tribe. Tribal employment is, by design, preferential to enrolled members. The governing board of the health center is made up of tribal members. The clinic is one of the largest non-governmental employers on the reservation. Of course many employees are related to board members. The alternative would be for the tribal health system to systematically exclude the tribe from the jobs the system creates, which no reasonable reading of either tribal sovereignty or federal Indian health policy would endorse.

The largest single family-member salaries at Rocky Boy exceed $170,000. These are not clerks. They are almost certainly clinicians, administrators, or program directors, reservation positions that are genuinely hard to fill because the pool of candidates who are willing to live and work on a rural reservation is small.

Kalispell, Montana: the professional-couple pattern

A different version of the same dynamic shows up at Kalispell Regional Medical Center in northwest Montana. The top compensated family members here are not distant relatives drawing clerical wages. They are highly paid professionals:

At these compensation levels, the people involved are physicians or senior administrators. The structural story here is the professional-couple problem. Two doctors who meet in medical school or residency and marry will, for the rest of their career, face a geographic constraint: it must be a place that has jobs for both of them in their specialties. Outside of large urban academic centers, there are a tiny number of places in the country that can employ two specialists from the same household. In Montana, Kalispell Regional is one of maybe three.

If the hospital refused to employ anyone married to anyone on its staff or board, it would lose both halves of every dual-physician couple it recruits. The governance cost of the current arrangement is real. The alternative cost, recruiting only single doctors to a remote market, is higher.

What the pattern looks like

Organizations where Schedule L is long for structural rather than self-dealing reasons share a set of features:

• They are in single-employer towns. Frontier counties often have exactly one hospital, one school district, one meaningful nonprofit. The labor pool the institution hires from and the civic pool its board is drawn from are the same people.
• They are in specialized labor markets. Rural hospitals that manage to recruit dual-physician couples will end up with them on the same 990. The alternative is no physicians at all.
• They are tribal or tightly-knit communities. Reservations, parochial academies, and ethnic communities run institutions that serve a bounded population. Hiring from that population is the point, not a conflict.
• The relationships are disclosed and the dollar amounts are ordinary. Nepotism disclosures tend to have a handful of outsized salaries clustered around the founding family. Structural-necessity disclosures tend to look like a cross-section of the local wage distribution, a lot of $40K to $90K jobs, consistent with what everyone else in town earns.

Why this still has to be disclosed

None of the above is an argument that Schedule L is unnecessary. The opposite: it exists precisely because, from the outside, you cannot tell Sidney Health Center (unavoidable) apart from a charter school where the founder's six children all happen to have administrative jobs (avoidable) without looking at the filing. The disclosure is the mechanism that lets an outside observer see the pattern and then, separately, ask whether it makes sense for the specific organization.

For most of the organizations that show up on this list, the answer is going to be yes. A critical-access hospital in a town of 1,500 cannot refuse to hire its board members' nieces if it wants to keep the nursing unit staffed. A reservation clinic cannot pretend that tribal membership and family are separable categories. Two physicians who fell in love in residency will have to live somewhere.

For the organizations where the answer is no, the same disclosure shows it. That is what Form 990 is for.

Compensation figures represent peak total compensation disclosed on IRS Form 990 filings, including base pay, bonus, deferred compensation, and other reportable income across all filing years (2001–2025). Separation packages, deferred-comp payouts, and emeritus/former officer entries have been excluded from these rankings, though one-time payments may still inflate individual totals. See the full methodology.

Search 1.6 million nonprofit executives

Find compensation data for any nonprofit executive or organization in America.