Comparing Profit vs Not-for-Profit Retirement Communities.

If a person Googles the question, “What is the difference between a Profit and a Not-for-Profit Retirement Community?” the answer is way oversimplified and can be very misleading.

Typically, a standard answer implies that not-for-profit is a superior model because it is mission-driven rather than profit-driven. This is simply not true. Private companies can be equally mission-driven. At the same time, not-for-profit companies have to be profitable to stay open and pay staff, not to mention the additional expenses of building, updating, and running a good business. Mother Theresa always said, “No money, no mission.”

Resident care is always the key to any well-run retirement community. The key is to hire the best staff and treat them well. That spills over to the best treatment and support for residents. That can be achieved in both business models. All things being equal in terms of buildings, services, costs, and state-of-the-art equipment, the staff makes the biggest difference. That goes from the maintenance providers to the nursing staff, physicians, and owners. 

Not-for-profit senior communities historically had a church origin.

Many churches began to care for the frail and elderly decades ago. The Presbyterians’ and Methodists’ homes were some of the first facilities built. They were run by boards of directors with pastoral leadership.

Today, the vast majority of these communities are now owned by private organizations, but they maintain their denominational name and not-for-profit status. This business model can take advantage of tax-exempt laws that provide increased revenues. Although the name of the church affiliation may remain, the original religious mission may or may not be the driving force for the care of residents. 

In addition, these not-for-profit communities must make comparable profits in order to pay administrative staff, nursing staff, and all other positions.

Typically, this business model asks new residents to pay a buy-in fee, which may be 100,000s of dollars. In addition, monthly fees are charged for rent, levels of care, and additional services. This is all perfectly legal for the not-for-profit. 

Not-for-profits have tax breaks.

One of the most significant advantages of this business model is the avoidance of taxes that support the community where they are located. In most states, these organizations avoid income, sales, property, and employment taxes. This is a tremendous cost savings for these organizations.

Another advantage of many not-for-profit communities is that they can raise funds through their residents and reach out to their local communities for donations. This stream of revenue is only available because of their not-for-profit status. 

For-profit retirement communities can be corporately owned or privately owned by individuals. 

There are a variety of business models that are for-profit. That describes most of the business life in our country. Most businesses that a person deals with every day are for-profit. From Walmart to a mom-and-pop storefront, they are all in business to provide service to the public and make a living for the organization, owners, and employees.

Although the most common perception is that not-for-profit organizations are more mission-driven, that is impossible to know. Only a serious investigation of an individual Senior Community – and the larger parent organization that creates the business model – reveals the actual mission. Because the community has a designation of not-for-profit in no way describes its mission or model of business. 

For-profit companies compete for high standards of care, state-of-the-art facilities, and superior staff. 

Retirement living is competitive, like all other businesses. Walking in the door to tour a community tells a big story. What does the facility look like? How well is the community maintained? Is it clean, and does it smell good? How happy are the residents? Are the staff members smiling, and do they speak to you? These are the most important clues to the business’s mission.

Like any other business, customer service says the most about the mission. Everyone appreciates friendliness and ease of getting answers to questions. Everyone enjoys a well-run operation where they are treated with respect. 

Also, these for-profit communities contribute to the local communities by supporting multiple staff members, paying taxes, and belonging to community support groups like the Chamber of Commerce. 

Why is McCrite a unique for-profit business model?

McCrite Plaza in Topeka and Briarcliff in Kansas City have a unique business model. Yes, they are for-profit Senior Living Communities, but they are family-owned and operated. This unique model means that control is local. Decisions are made in-house, not by a corporate board hundreds of miles away.  

Answers to questions and requests for exemptions or special needs are handled in-house. When residents and their families have cares or concerns, they can access ownership easily. 

When the McCrite family started their business, they had a mission to care for the frail and elderly. Pat McCrite’s mother had cared for such residents in a home setting for years before buildings were ever built. Pat McCrite grew up as a part of his mother’s business. It was a natural transition to start his own retirement community almost 50 years ago. 

His philosophy has always been to put residents first; everything would flow from there. He and Judy have made it a family business, and all of their five children have played a part in its success. 

And yes, McCrite Plaza pays all taxes due to local communities and state and federal governments. They are responsible to abide by the same regulations of all Senior care facilities by state and federal law. They support their communities and hire local staff. 

Going on a tour and meeting the McCrite family in person is the best way to understand their mission. The entire family are people of faith, with high moral and ethical standards, and passionate about their work with the elderly. They are also fun-loving and create a contagious atmosphere of friendliness and joy for the staff and residents. It is a rare community where the CEO is in the dining room sharing some funny Irish jokes with the residents. 

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