“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 firstname.lastname@example.org!