Mission or Market: Understanding Nonprofit, Not for Profit and For-Profit Senior Living Options
Not only are there a lot of senior living choices out there — Life Plan Communities, 55+ communities, independent living — but there also nonprofit, not-for-profit and for-profit options. Is there a difference between them? How will choosing one over the other affect your lifestyle? To help you make a more informed choice, we’ll break down the differences.
Nonprofit Retirement Communities
A nonprofit community is one that receives special tax-exempt status from the Internal Revenue Service (IRS) if its mission and purpose is to advance a social cause and offer a public benefit. Specifically for retirement communities, that means they must be part of a qualifying religious, charitable organization or private foundation.
Nonprofits are sometimes also referred to as non-stock corporations, or 501(c)(3) organizations. However, nonprofits still aim to maximize their revenues, but they’re prohibited from putting their profits toward anything other than advancing the organization. There are no shareholders and owners only receive compensation in the form of salaries. To ensure they are meeting these requirements, nonprofits must make their financial and operating information public so that potential donors can see where their donation might go.
Not-For-Profit Retirement Communities
Not-for-profit is a broad term for organizations that do not generate profit for their owners. All money generated by a not-for-profit business must be reinvested back into running it. Unlike nonprofits, not-for-profits are not required to operate specifically for the benefit of the public or the advancement of a social cause. A not-for-profit can simply operate to serve the goals or special interests of its members. Like nonprofits, not-for-profits must apply to qualify for tax-exempt status with the IRS. However, money donated to not-for-profit organizations is not tax deductible.
For-Profit Retirement Communities
For-profit retirement communities are run like business entities and must report to a board and/or shareholders. Funds are generated from resident entrance fees and monthly service fees as well as outside investments. Although for-profit retirement communities have a legal obligation to generate revenue, that doesn’t necessarily mean they don’t invest time and money into better amenities and care for the residents because the reality is, without residents there aren’t any profits. When residents thrive, the community is also able to thrive.
Excellence is Excellence
When it comes to choosing a retirement community, there’s no right or wrong answer. As you evaluate potential retirement communities, ask about the community’s operating structure and financial strength. Many nonprofit and not-for-profit communities also provide financial statements so you can see exactly how they’re performing. No matter which option you choose, one thing to consider is which one will meet your needs the best today and into the future.
Freedom Village is a for-profit community managed by Life Care Services, An LCS Company. For over fifty years, Life Care Services, has developed expertise in helping small communities create the best senior living experience for residents and employees with a hospitality program that provide residents with exceptional experiences every day. They also know how to set communities up for financial stability and growth. Their results speak for themselves as Life Care Services was voted #1 in customer satisfaction in independent senior living communities by J.D. Power 5 years in a row.
Experience The Results for Yourself
To see how we invest back in our community — including campus improvements, resident activities and our beautiful residences — schedule your personal visit by using our Community Assistant chat feature, calling or contacting us here.
