Caring For Life: Facing the Challenges of Charitable Care
March 13, 2012 | by Kim Fernandez
Mission-driven providers put benevolent care at the center of their obligations to residents, but planning and creative fundraising are necessary to making the financial commitment work.
According to a recent survey by Gallup, two-thirds of Americans worry they won’t have enough money for retirement. It’s not an unfounded fear, either: Traditional pension plans are on their way to extinction, 401(k)s and housing prices have tanked in recent years, and the cost of standard medical and long-term care is skyrocketing.
Other statistics are equally sobering: According to the EBRI Retirement Readiness Rating
, nearly 48 percent of older baby boomers and 45 percent of Generation X members are at risk of outliving their financial resources; that number climbs to 70 percent for low-income Americans.
Even those who’ve saved aren’t out of the woods. Many misunderstand how and where government health care programs kick in for long-term nursing care, and those who’ve relied on real estate or investment houses for their retirement savings have watched those numbers dwindle despite everyone’s best efforts.
All of this means that there will likely continue to be a great need for charitable or benevolent care for senior citizens over the next decade. That’s something many CCRCs are already struggling with—caring for elderly residents is expensive, and the money has to come from somewhere. For most, asking a resident to move out when his or her savings are depleted isn’t something to be embraced, and finding a way to cover costs so those residents can stay is something of a puzzle.
“We are seeing this,” says Becky Drumm of Advancement Associates, Inc.
, Bellefontaine, Ohio. “This is the main reason CCRCs are ramping up or instituting development programs. Typically, it’s always been capital projects that have ramped up development efforts. Those are certainly still there, but there’s always this nagging thought that it’s becoming more and more difficult to support their mission. Most have a mission of not turning anyone out. What do you do about that?”
Douglas Myers, president of the Asbury Foundation
, Gaithersburg, MD, agrees. He says his parent company has faced the challenge for awhile.
“Benevolent care is helping residents who, through no fault of their own, have outlived their resources,” he says. “In residential living situations, there is no other source of funding other than charitable support to help them.”
And even when the government’s programs for elderly care are triggered—which doesn’t always happen—the payment scale isn’t always realistic.
Drumm says that’s not unusual, particularly in a stressed economic environment. “Government funding is being cut back,” she says. “And there’s an issue with the sheer numbers of folks who need care. CCRCs have the capacity to support those people where they want to go, but are they going to have the funding?
For many providers, the answer has been to set up fundraising arms and foundations to raise money for endowment funds, which are then used to pay for the care of those residents who’ve depleted their savings. Most of those residents find they need help when they step up from independent senior living to a higher level of care.
“People go into these facilities and they think they have enough money for it,” Drumm says. “Then they live longer or go into skilled nursing care more quickly than they thought they might have, and those resources are drained more quickly than anyone anticipated. Once you go into skilled nursing, it’s amazing how quickly the money goes.”
The answer for providers, she says, is actually relatively simple: Ask for help.
“It’s tough, but it’s not,” she says. “We tell people the opportunity lies in getting your mission out in front of folks and build a case for support just around benevolent care. I think a lot of people who would support an organization on this issue haven’t been asked, and haven’t been told why this is a problem. They don’t understand why we need to do this.”
Myers says outreach has made a big difference to his foundation. “The majority of our donors are aware of benevolent care programs,” he says. “We have a long history and we’ve been promoting it for many years. People at our established communities are aware of the program, and their annual gifts are often designated for this. But at a brand-new community that’s just been established, they’re not experiencing benevolent care at the start and their first fundraising efforts are for capital projects—wellness programs, health care centers, things like that.”
Efforts have also changed in recent years, Myers says: “When we saw the economy starting to turn down, we started looking at alternative gifts beyond traditional cash and stock. A member of our development team had a background in real estate and we’ve had success with that recently.”
That is a growing trend: CCRCs offer to try and help residents sell their long-time homes. If the home doesn’t sell in a certain amount of time, the community buys it, keeping the asset as an investment and handing the cash over to the resident’s account for their care.
“We’ve used those gifts of real estate to fund our charitable gift annuity,” says Myers. “That provides lifetime care and the system removes an obstacle for a resident who’s holding off on moving in because they don’t want the burden of selling that home.”
It’s not a perfect system, and property values seem to be affecting CCRCs: According to the National Investment Center for Seniors Housing & Care Industry
, occupancy levels in assisted living facilities and independent living facilities have fallen in proportion with home values between 2007 and the first quarter of 2011.
“The cultivation of planned gifts makes the most sense,” says Drumm. “It makes sense because this is a growing area, and you need to not just ask for immediate-needs funds. Endowments make sense—you’re building a base of support that will be ongoing.”
Myers says that’s gone so well for his organization that they’re trying to branch out a bit more. “Because our gift income relies on planned gifts, we try to look at three- to five-year averages to try and take a stab at what we think we’ll be doing during the year ahead to plan for that,” he says. “And we’re diversifying our sources of gift revenue. We’re trying to focus and strengthen our ability to secure outright gifts. We need to do a better job of identifying businesses and people who can make immediate commitments. We need money we can count on today.”
Drumm says there’s another key: Reaching out to the families of current residents.
“One of your key stakeholder groups is families,” she says. “How are you connecting to your families? So many are not even sending newsletters to family members of residents. They don’t keep them posted on what’s going on. That’s the first and easiest thing you can do. ‘Here’s what’s happening, and then here’s our case—we need support for benevolent charitable care so that no one ever has to be turned away.’ Those people become your advocates. People who believe in something are your best advocates.”