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Not-for-Profit VS. For-Profit Retirement Communities – What’s the difference?

By Sarah Sexton | Publish Date October 14, 2020

“Kirkwood began as a not-for-profit created by the Independent Presbyterian Church to offer continuing care retirement to seniors.”

Not-for-profit: What does that mean? Why does it matter? What’s the difference?

If you have begun the retirement living search for yourself or a loved one, you may find that there are both for-profit (FP) and not-for-profit (NFP) retirement communities to choose from. While FP and NFP communities often offer similar services and features, there are a few major distinctions between the way these types of communities operate. Over the next 3 months, we are going to lay out some facts for you and talk about the differences between the two categories and what to keep in mind when choosing a community for you or your loved one.

First, let’s define a not-for-profit retirement community. A NFP organization, or in this case, retirement community, keeps all of its earnings in the organization. This is one of the major distinctions of a NFP from a FP community. Both FP and NFP communities must earn money to continue operating, but NFP communities reinvest profits back into the community to make improvements to their programs and services, enhance the community’s campus, hire additional staff members, and ultimately benefit residents. For-profit communities have an obligation to shareholders and investors whose priority is making money on their investment. According to James M. Moloney, Head of Real Estate and Co-Head of Tax-Exempt M&A at Cain Brothers in San Francisco, these communities are “run from a financial return perspective, as opposed to the mission-in-perpetuity perspective of the not-for-profits.”

Another distinction between not-for-profit and for-profit retirement communities is the quality of care you recieve. All senior care facilities that are licensed by the state are required to adhere to the same regulations to ensure the safety of residents. In terms of the quality of care provided, however, NFP and FP senior facilities may differ. For example, a study by the Center for Medicare Advocacy found that FP nursing homes had lower staffing levels, higher numbers of deficiencies cited by regulatory agencies, and higher numbers of deficiencies causing harm or jeopardy to residents when compared to not-for-profit facilities. Although this study focused on nursing homes, all continuing care retirement communities include nursing home care and apply the same quality of care across their entire community.

The last difference we will talk about today is how not-for-profit retirement communities are often driven by an overarching mission to serve their residents and assist people in need. Most NFP communities work to fulfill their mission by engaging in service efforts to benefit others, such as providing lifetime housing and health care services to individuals even if their personal finances are depleted, and volunteering for community organizations. Many residents and potential residents find it comforting to know that they will be living somewhere that aligns with their values and will always take care of them. While for-profit communities may have an obligation to investors and shareholders, the majority still desire to meet the needs of their residents and provide competitive services and amenities.

As we take a deeper look into not-for-profit retirement communities and what sets us apart when it comes to choosing a new home for yourself or your loved one, we hope you will join us! If there are any specific questions you have or topics you would like us to cover – please feel free to drop into the comments or email lsanderlin@kirkwoodbytheriver.com!

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The Residents

Our residents come from different backgrounds and bring their unique qualities, talents, and life experiences to complete the Kirkwood community. Here are just a few reflections from some individuals who call Kirkwood their home.

I fell in love with the cottage and the view from my back porch. I am excited to have a yard for Ginger, my poodle, to play in and my own garage, all within an established retirement community!

Charlotte Hamilton Current Resident

My husband and I looked at a number of places when deciding to move to a retirement community. For the most part, we found communities that said, ‘We’re going to take care of you.’ But Kirkwood was different. It wasn’t just about taking care of us. It was also about having fun, having friends, and living life to the fullest. The attitude at Kirkwood was positive and the atmosphere was comforting. We simply couldn’t resist. Without a doubt, the location was ideal. The Cahaba Room that overlooks the river, the mountains, the trails – there were just so many things about life. The community was lively. It was alive.

Alice Brooks Current Resident

We realized we were approaching an age where we might need more assistance than what just downsizing could provide. Knowing we have my sons nearby and the levels of care should we need it is comforting, and the beautiful hillside, river, and the woods makes it that much more appealing. We don’t know of any other community that has the woods, the various levels of care, and so many different amenities.

Phyllis and John Guschke Current Residents

We were moving my parents down from the Cleveland area to be near us. I looked at almost every retirement place in the Birmingham area. The second I turned into Kirkwood’s drive and drove up the hill, I knew that I’d found the perfect place for my parents to live in Alabama. In the six years that my parents have been at Kirkwood, I have always felt nothing but love and helpfulness from every staff member. Everyone is always helpful with a pleasant attitude. You can truly see and feel the family atmosphere. I’m happy that my parents can call Kirkwood their home.

Brenda Sheehan Kirkwood family member

When we learned that Cedar Ridge was being developed, that seemed to fit our needs very well. It is the ideal place for the next phase of our retirement.

Carol and Arthur Stephens Current Residents

One thing that we feel is very important here at Kirkwood by the River is the relationship that we have between the staff and the residents. They are dedicated to making our life here as safe and secure and pleasurable as possible. That goes a long way.

Fred Rogers Current Resident

The community's cottage living surrounded by a wooded, natural environment with access to future healthcare services is what attracted us to Kirkwood!

Rick and Jane Ricketts Current Residents