As bond-funded hospital goes up, new abuse charges at Boys Town

Boys Town National Research Hospital

With construction underway on Nebraska nonprofit Boys Town's $300 million bond-financed hospital expansion, several Boys Town employees were arrested and charged with child abuse this month, raising questions about the role of fundraising in the charity's business model and the narrative that fundraising has relied upon.

The village of Boys Town, Nebraska, issued the revenue bonds earlier this year for borrower Father Flanagan's Boys' Home, doing business as Boys Town, with Father Flanagan's Fund for Needy Children, a separate nonprofit corporation controlled by the borrower, acting as guarantor.

Boys Town began in 1917 as a sanctuary for troubled boys, its reputation burnished by the 1938 biopic of the same name, starring Spencer Tracy as Boys Town founder Father Edward J. Flanagan.

Boys Town continues to operate a residential care community campus west of Omaha, which has included girls since 1979, but its mission has grown to include the pediatric research hospital for which bonds were issued earlier this year.

The arrests this month stemmed from the residential care community. A Boys Town family teacher and his wife, as well as an assistant family teacher, were charged with intentional child abuse for allegedly locking children in a closet for hours and allegedly forcing a child to write essays with a broken hand, KETV Omaha reported.

Levy Konigsberg, a law firm based in New York City, is currently seeking potential plaintiffs for sexual abuse lawsuits against Boys Town. The firm has represented plaintiffs in the Flint, Michigan, water settlement, among other cases.

Attorneys at Levy Konigsberg did not respond to messages seeking comment by press time.

The hospital expansion continues a shift in focus for Boys Town, which historically relied on fundraising off its mission to rehabilitate troubled youth, away from that legacy and toward the provision of healthcare services.

Boys Town received $211 million, or 35% of its revenues, from healthcare patient services in the fiscal year ended Dec. 31, 2024. 

In its 2025 audit, Boys Town reported $241 million in patient revenue, or about 45% of its $538.8 million total revenues for the fiscal year ended Dec. 31, 2025.

The makeup of the board of directors also increasingly underscores that shift. The chair-elect of the board is an executive vice president at Blue Cross Blue Shield of Nebraska. And two of the trustees added in 2024 work in medicine, as a cardiology professor and vice chair of the pediatrics department at UMass Memorial Children's Medical Center, according to the OS.

After rising steadily since 2015, the charity's fundraising totals have dipped in recent years, falling to $205 million in 2022 from $210 million in 2021, when a Nebraska Attorney General's Office investigation found two priests employed by Boys Town had victimized multiple youths — and were part of a broader historical pattern by the church of prioritizing "the preservation of (institutional) reputation," then-Attorney General Douglas Peterson wrote.  

Boys Town's fundraising fell further in 2023 and 2024, to $193 million and $180 million, respectively. 

Child abuse allegations have dogged the charity in recent years. At least eight former residents have filed lawsuits alleging child sexual abuse. Some of those lawsuits have been dismissed due to the statute of limitations.

A Boys Town spokesperson declined to say how many lawsuits Boys Town is currently facing.

The child abuse arrests this month don't involve sexual abuse allegations.

Other Catholic nonprofits have declared bankruptcy amid abuse lawsuits. The Archdiocese of New Orleans' bankruptcy, begun in 2020 and approved by a judge last year, brought interest losses for bondholders. And in April, the Archdiocese of New York told clergy it was hundreds of millions of dollars short of funds to pay a global settlement, and is considering bankruptcy. 

The official statement for Boys Town's Series 2026 bonds notes under bondholders' risks that "a bankruptcy of the borrower or the guarantor could impose significant risks of delay, limitation or modification of the registered owners' rights against the borrower or the guarantor."

Boys Town said in the OS that the lawsuits it currently faces have not been "unusual or disproportionately large," adding, "At this time, the borrower does not believe that there are any pending suits/claims of a material nature."

Bridgette Renbarger, Boys Town's EVP of finance and CFO, did not respond to questions by press time. A Nebraska Department of Health and Human Services spokesperson did not respond to a request for comment.

On Jan. 21, Stifel priced for the Village of Boys Town, Nebraska, (/AA-//) $312.32 million of Series 2026 revenue bonds with 5s of 7/2046 at 4.50%, 5.25s of 2044 at 4.75% and 5s of 2055 at 4.80%, callable 7/2035.

The Series 2026 bonds have a limited amortization schedule that means nearly half the bonds will remain outstanding until maturity, with $164.38 million in principal maturing in 2046 and $147.94 million in principal maturing in 2055. 

That's on top of two prior series of bonds with limited or no amortization. The Series 2017 bonds have a debt service structure in which the principal does not amortize, and the Series 2020 bonds have limited amortization prior to the final maturity, according to the OS.

S&P Global Ratings downgraded Boys Town two notches in November to AA-minus, saying Boys Town's post-issuance debt total would be around $413.2 million, and noting that debt is mostly composed of bullet maturities. 

"This structure exposes (Boys Town) to refinancing risk, although we believe the organization currently has the liquidity and resources to manage that risk," S&P said in its rating report. The outlook on all the bonds is stable.

The rating agency pointed to weak operating performance in recent fiscal years and major bullet maturities in fiscal 2028 and 2050.

The village loaned the Series 2026 bond proceeds to the borrower for the design, construction and equipping of new hospital and research facilities, as well as a new elementary school on Boys Town's main campus, and street and infrastructure improvements on that campus.

Bond proceeds will also pay a portion of interest on the Series 2026 bonds and costs of issuance, per the OS.

The 254,000-square-foot hospital modernization project will merge the old hospital space with new research facilities and 24 additional hospital rooms, the Omaha World-Herald reported July 31. The groundbreaking was in November; the site preparation phase ended and construction began last month, the Herald reported.

In an unsigned email, a Boys Town spokesperson said the expansion includes extra hospital space for acute care as well as the research labs and clinics. The expanded hospital is scheduled to open November 2027, the spokesperson said. 

Jessica Lerner contributed to this story.