Steps for Starting a Stand-Alone, Mixed-Model Community Charity Pharmacy

Phil Baker of Good Shepherd Medication Management offers these points to starting a stand-alone charity pharmacy.

Good Shepherd Medication Management isa nonprofit organization of Christian pharmacists dedicated to providing pharmacy services to the under-served in Memphis, Tennessee. This nonprofit was created to be Memphis’ first charity pharmacy, dispensing to low-income uninsured patients for free, specializing in personal patient counseling services.

  • Acquire nonprofit status in state where pharmacy will exist (See: 501(c)3 Nonprofit Status).
  • Develop a three-year budget(See: Example of Initial Budget). Start fund development once at least the first year’s budget is defined.
  • Strive for funding from more than one source, a minimum of three. If initial budget is $450,000 for 3 years and $150,000 is needed for the first year, seek for “Matching” funds from three different organizations. Example: $50,000 per year from 3 different sources on an annually recurring grant for three years. Funders may be more amenable to a smaller recurring grant than one large single grant. Securing one grant allows time to pursue the other two. 
  • Partnerships:
  1. Hospitals– most nonprofit hospitals have foundations that can (sometimes) be sources of funding. Transitional care programs are a great place to partner for direct reimbursement.
  2. Pharmacy Schools– not sources of funding but essential to a healthy program. Become a preceptor site for local schools as quickly as possible. Precepting fees bring in revenue and students can be utilized throughout the program as they learn various pharmacy processes and develop skills for serving an uninsured population.
  3. Foundations– Connect with local foundations as early as possible. These are great sources of funding, but they are relationships that take a long time build (See: Fund Development and Relationship).
  • After securing at least one supporter, the next focus is finding a location. Encourage the new “supporter/s” to help find the best location for free (See: Location).

TIP:Iowa Prescription Drug Corporation is licensed as a distributor and pharmacy. Reclaimed meds are distributed to program participating pharmacies throughout the state as well as directly from the facility.

  • Once a facility has been acquired, work with the state for licensing as a pharmacy and/or wholesaler/distributor, related to reclamation. The state may require a wholesaler/distributor license if transferring reclaimed meds from the facility to another facility/pharmacy (See: Registrations and Steps to Obtaining a Pharmacy License).
  • Initiate contracts with nonprofit distributors: Dispensary of Hope, AmeriCares, Direct Relief, SIRUM and others. Determine a starting inventory and place an initial order (See: Developing a Formulary and Vendors).
  • Website
  • HIPAA Compliant form on website.
  • Pharmacy Software
  • Billing software
  • Customer Relationship Management (CRM) Software
  • G-suite for email, contacts, drive space


  • Host a grand opening event and maximize publicity.
  • The first 12 to 18 months are primarily about publicity. Plan on spending at least 50% of time outside the pharmacy speaking to anyone who will listen (primary care providers, other safety net providers, rotary clubs, and anywhere you are invited to speak).
  • Recruit (or hire) a local PR professional and plan some sort of press release or event every 30 days. Every new partnership (school, foundation, hospital, etc.) is an opportunity for a press release. Publicity builds credibility as quickly as possible. Under a web search for the pharmacy, the more articles that come up, the more credible the pharmacy is seen.


  • Recruit patients through partnerships with hospitals, other safety-net providers and speaking engagements.
  • Enroll patients
    • in person (walk-ins)
    • over the phone
    • through pharmacy website