LeadingAge Magazine · May/June 2014 • Volume 04 • Number 03

Do Consumers Understand the Not-For-Profit Difference?

May 14, 2014 | by John Mitchell

Some do and some don’t, but not-for-profit providers should make it a central part of their outreach to consumers.

The way Joe Anderson sees it, conveying the difference between two retirement communities a few miles apart, that look and feel the same, can be tough.

“Adult children who help elderly parents often find themselves suddenly in the situation of finding a retirement community for their parent. They don’t understand the difference between Medicare and Medicaid, much less the difference between not-for-profit and for-profit four-level retirement communities,” says Anderson, senior vice president for sales and marketing for American Baptist Homes of the West (ABHOW), which operates 11 continuing care communities in four states. “It can be a very stressful time, so the tendency, especially in a saturated market like Phoenix, is to call the first five-star community they see, regardless of its profit status.”

It’s no wonder this can be a difficult life decision. Kiplinger describes the search for the right continuing-care retirement community as hunting for a new home, making decisions about future health care needs and negotiating a contract all at the same time. Repeating any message often is a basic tenet of long-term consumer behavior, which is why telling the not-for-profit story is key.

“It is imperative to protect—yet project—brand in order to differentiate (between) for-profits and not-for-profits, while still using the brand to advocate, educate, inform, fundraise and drive revenue,” says Karen Harriman, senior vice president of marketing and communications for Presbyterian Manors of Mid-America (PMMA). PMMA operates 18 retirement communities in Missouri and Kansas, 14 of which are on the US News & World Report 5-Star Nursing Home list.

“Most people do not understand the not-for-profit concept and have the misconception that a not-for-profit should not have a positive bottom line or have to adjust rates. PMMA is working diligently in some of our markets to inform and address both not-for-profits and CCRCs,” adds Harriman.

Recent research bears out Johnson and Harriman’s sense of urgency. Lester M. Salamon, director of The Johns Hopkins Center for Civil Society Studies, and his co-authors state in a recent report, “key stakeholders in government, the media, and the general public do not seem to understand these core values of the nonprofit sector …” The report, “What Do Nonprofits Stand For?” is a Listening Post Communique from 2012.

“It’s important that we tell our story because the social extension of our mission affords us tax exemptions,” says Cory Kallheim, vice president, legal affairs and social accountability for LeadingAge. He notes that as local and state governments look for new tax revenues there is a temptation to re-examine property tax and other tax breaks provided to not-for-profit organizations.

Social accountability is a measure of an aging services organization’s commitment to its mission, its stakeholders and society. Through the Count the Ways campaign, LeadingAge and Holleran are reminding members of the resources available to help them examine, track, and report on their social accountability efforts. We are also asking members to send us copies of their social accountability reports: Email them to CKallheim@LeadingAge.org.

In addition, Holleran and LeadingAge are conducting a survey of providers to gauge where members are on their social accountability journey. You should be proud of what your organization does for your community and your community deserves to know how you are changing lives. Please help us Count the Ways!

Find LeadingAge social accountability resources here, including a link to the Count the Ways survey. Also visit Holleran’s Social Accountability Toolkit page, where you’ll find many more resources.

- Written by Cory Kallheim, vice president, legal affairs and social accountability for LeadingAge.

“It’s doing the right thing, and this includes social accountability as a central part [of] mission, not ancillary to it,” he said at the LeadingAge Annual Meeting last year.

Charlene Harrington, R.N., Ph.D., thinks not-for-profit retirement communities have a great story to tell, especially on the nursing home side. Harrington is professor emeritus of sociology and nursing at the University of California San Francisco and also manages the CalQualityCare.org website that reports on nursing home and hospice quality. She conducted research in 2011 (which has since been updated) that shows “poor quality of care is endemic in many nursing homes, but we found that the most serious problems occur in the largest for-profit chains.”

“For-profits replace registered nurses (RN) with limited practice nurses (LPN) and aides. Consumers don’t understand this issue,” says Harrington. She notes that low nursing staff levels correlates with poor quality and that the 10 largest for-profit chains had approximately 40 percent more deficiencies for quality of care than the best performing nursing homes. She says that the for-profit chains also pay their staff less, which results in higher turnover.

According to Kathy Pollicita, vice president for mission advancement at Frasier Meadows, a CCRC in Boulder, CO, in the last five years the organization has had to be more proactive in telling its not-for-profit story. She concedes that the not-for-profit distinction is a confusing concept for prospective residents, especially from those outside the Boulder area.

“Frasier Meadows was founded 54 years ago when the Frasier family donated 20 acres to the United Methodist Church for a retirement community. With about 85 percent of our residents coming from the community, our story was pretty well known by our residents and their families. But in recent years, we are starting to see more residents come from outside the community so we’ve had to get better at telling our story,” says Pollicita. She notes that Frasier Meadows is the only not-for-profit CCRC in Boulder and the only in the market area that accepts both Medicare and Medicaid, which has accounted for as much as a $1 million in uncompensated care they provide annually.

Pollicita says that Frasier Meadows relies heavily on face-to-face communication with both community leaders and visiting residents to tell its story. As part of its Community Needs Assessment, it brings community leaders on-site to discuss how the retirement community can contribute to the well-being of the community. Residents at Frasier Meadows are also very involved in operating the community, serving on 36 committees. This includes one that meets and accompanies prospective new residents who visit.

“Our current residents are our best sales people. They know how to tell our story and actually don’t like to see us advertising. They think it’s a sign that there’s a problem,” says Pollicita. Frasier Meadows has been recognized as “A Top Walkable Place to Retire,” is ranked 14th in the “Top 100 Metro Denver Places to Work” and is CARF accredited. It also was in national news this past fall when the community was damaged in a 100-year flood that wreaked havoc on the Front Range from Denver to Fort Collins. The staff were called “heroes” in the local Boulder newspaper when, on their own with no help available from the police or fire departments, they rescued and relocated 54 patients in the health care center, of whom 27 had dementia. Another 34 assisted living residents were also relocated out of flooded and damaged buildings.

“We’re still working our way through $14 million of flood damage and getting residents back on campus,” Pollicita says. “But the community has been reminded in a very profound way that Boulder is a better place with Frasier Meadows in it.”

Joe Anderson of ABHOW also says that one-on-one conversation with prospective residents is an effective opportunity to tell the not-for-profit story. ABHOW schedules “Dine & Discovery” events to introduce their communities.

“We don’t see it so much as an advertising message,” Anderson says. “Once we get prospective clients into the community for a tour, we go into depth and make the point.”

PMMA takes a different approach to reflect the culture of its communities.

“Our residents look for faith-based retirement communities and automatically link faith-based with not-for-profit,” Harriman says.

She reports that PMMA receives comments in its resident satisfaction surveys that express gratitude that PMMA is both not-for-profit and faith-based. PMMA promotes its status in a campaign with the headline “What does nonprofit mean to you?” It features both residents and staff. Harriman also cites annual recommitments by employees to “The Pillars of Our Brand Promise,” which is intended to eliminate institutional-style care and replace it with a warm, home-like environment.

ABHOW also reports similar organizational habits to ingrain “NFP-think” among its staff, including daily huddles for all staff in which ABHOW values are reviewed and discussed so as to be top-of-mind.

All of the providers interviewed stressed that it is vital to share the not-for-profit story and how it relates to quality of care with hospital discharge planners. Hospitals are under tremendous pressure to avoid readmissions within 30 days of discharge. Because of federal laws regulating referrals for services, hospitals cannot make recommendations to patients or families about which nursing home they should use. However, they do gravitate to facilities that have a proven record of lower readmissions. Social media is also an area that needs attention and is also a good place to tell the not-for-profit story.

“One bad unvetted Yelp review can ruin 20 years of good work,” says Anderson. “So you have to be active in that venue.”

In the end, it comes down to the “central part of mission” that Kallhiem advocates. Members must lead with mission to tell their not-for-profit story. For example ABHOW, as stated in its annual social accountability report, has a simple declaration: “Our goal is to touch as many lives as possible and our strategy is to put our tax-exempt dollars to work.” To that end, in 2013 ABHOW received tax benefits of nearly $9 million and provided almost $19 million in community benefit, including nearly $15 million in pure charity care. A two-to-one return on social investment is a story that is a good sell just about anywhere.