My guild is not an independent 501-c3.  I would say the pros are having more control over the group, and the monies are held at the foundation so if the auxiliary or guild disbands, the money still belongs to the hospital.

The only con I see is we have to go through more regulated finance channels, so it is more difficult to use the money.  Takes longer to get checks, etc.

Our Auxiliary is a separate 501-C3, that is still an entity of the hospital. The Auxiliary maintains their own bank accounts and accounting records, but all records are sent to the hospital's accountants monthly and for annual filing. I see it as the best of both worlds because the Auxiliary has the autonomy for decision making in regards to their budget, but not the responsibility for tax filing.