Many in the not-for-profit sector of senior housing have found the post-pandemic operating environment challenging to navigate. The rate of recovery has been slowed by many factors felt more acutely in the not-for-profit sector, where revenues are oftentimes limited by stagnating reimbursements from federal and state sources, while expenses continue to rise as the result of inflation.

Additional pressures have also arisen from a rising interest rate environment and a loss of value in investment income, which have destabilized and/or drained rainy-day funds. Finding a balance between meeting the mission as a values- or faith-based organization, operational sustainability, and cash management has become even more complex and challenging than many anticipated since the end of the COVID-19 Public Health Emergency (PHE).

To stabilize operations and meet the needs of the seniors who depend on the not-for-profit housing option, it is becoming increasingly common for boards of directors and community leadership to reach out to consultants to seek advice and counsel on the challenges of the current landscape. Though this can be construed as both risky and counterintuitive to the not-for-profit charter, there are ways to assess whether a for-profit management company can help stabilize operations, while supporting the mission of affordability, access, and care.

So what questions should the leadership of a not-for-profit organization ask when considering a partnership with consultants or a management company from the for-profit side of senior housing?

NOT-FOR-PROFIT PARTNERSHIP CONSIDERATIONS

VALUES

The first consideration that needs to be addressed is ensuring there is a match for each organization’s value system. Mission and value statements are standard for all organizations, but can the individuals speak to them, citing specific examples of how they are implemented in everyday work with seniors? Commonality or differences of values can be found by asking open-ended questions about issues that might be encountered during the assignment.

As with residents of faith-based senior housing communities, it is not always required that all parties proscribe to the specific faith of an organization, but a respect for and recognition of the importance that it plays in the lives of the residents, employees, and families affiliated with the community is critical. Is there alignment between what both organizations prioritize when considering care delivery to the older adults in their care?

EXPECTATIONS

When finding a match between not-for-profit and for-profit, the expected result must be clear to each organization before the engagement commences. The definition of “success” might look very different between the two organizations, and an understanding from both parties will help avoid confusion and misalignment.

There should also be a clear understanding of how and to whom information should be communicated. The governing body may request that all information be delivered to them so it can be disseminated to the appropriate decision-makers, or they may want to take a more hands-off approach and have a community leader or consultant deliver results to them. The nature and extent of work being completed may require different audiences, but the parameters surrounding timing and delivery should be followed and respected.

EXPERIENCE

It may seem like a commonsense question, but it is oftentimes overlooked: Has the for-profit organization done similar work to success in the not-for-profit space before? Understanding what work was done and how results were measured—and hearing from key references—should be the minimal expectations when looking for solutions to operational challenges.

It should also be evident in seeking solutions from for-profit organizations that they have the necessary resources to support the assigned project. Asking who will be on the team, what their background and experience includes, and how much time each can commit to the project will help ensure that the goals and objectives are achievable and manageable.

For properties serving rural markets, or for organizations with either one community or a smaller portfolio, an experienced and knowledgeable consultant will be able to provide guidance on more efficient means to manage operating systems, including billing, payroll, CRM, and EMR. This can lead not only to cost savings but increased productivity.

Bringing a for-profit organization into the not-for-profit environment can be a difficult decision to make for leaders. Concerns about a loss of focus of the intended charter from all affected parties are legitimate and can be addressed preemptively by ensuring there is alignment on values, expectations, and experience. In the end, bringing in a fresh perspective on the challenges faced in the not-for-profit sector of senior housing can have positive results.

CONTACT US

Health Dimensions Group (HDG) has years of experience owning, operating, and providing comprehensive third-party management services for a vast array of partners. We’d welcome the opportunity to share more about our experience working with not-for-profit organizations should you be contemplating a partnership with an outside consultant or third-party management firm.

For more information, please contact us at info@hdgi1.com or 763.537.5700.