Comparing Not-for-Profit and For-Profit Retirement Communities

Individuals ages 65 and older account for 17% of the population of the United States—about 56 million people. Many of these individuals still live in their own homes or with family members, but senior living communities are becoming an increasingly popular option for older adults. It is important to understand one important distinction between senior living communities: those that are for-profit and those that are not-for-profit. This article will compare the differences between for-profit and not-for-profit retirement communities.

Ownership

The driving difference between not-for-profit and for-profit retirement communities is ownership. For-profit organizations are owned by an individual or group of shareholders who are looking to make money through their business. These individuals are often based far from the community and don’t know what is happening in local communities. Not-for-profit organizations are not owned by anyone and are instead overseen by a board of directors. These board members are individuals who volunteer their talents and their time in order to help the organization provide quality services and management. 

As volunteers, board members don’t accept any financial gain, which means that they are solely focused on and committed to managing the organization's financial resources, planning for the future, responding to needs within the organization, and staying true to the mission. These individuals are also from the local area and understand the community’s needs and expectations.

Price and Profits

By definition, for-profit organizations have to show a significant return on their owners’ investment. By charging the local communities management fees and paying dividends, the for-profit institutions move funds from their local community to the owners’ bottom line. On the other side of things, not-for-profit organizations are not owned by anyone and do not keep profits. Instead, they reinvest any profits back into the organization in order to continue carrying out their mission and improving the lives of their residents. 

Nearly 80% of all senior residential care communities are privately owned and for-profit. When giant corporations own hundreds of properties, they’re not necessarily worried about using profits to help people; they are worried about growing their own equity. This usually leads to them keeping rental rates as high as possible and costs as low as possible, which can affect different offerings from the community like dining, staffing, activities, transportation, and more. Combined, these can end up negatively impacting the residents' quality of life.

Commitment to the Community

Another key difference that separates not-for-profit retirement communities from for-profit ones is the commitment they offer. Nonprofit organizations are committed to their mission above all else. This commitment also factors into the quality of services that are provided in the community.

As mentioned earlier, for-profit communities generally try to keep costs low in order to maximize their profits. That doesn’t always result in a commitment to providing quality services for residents. For-profit retirement communities that do not have ties to the communities that they service may be more likely to fold when things get tough, leaving their residents scrambling to find a new home.

For-profit communities are mainly focused on making money, while not-for-profit communities are committed to providing quality care to their residents above everything else. While there are many individuals at the for-profit communities that are deeply committed to their residents, the organizational commitment at for-profits will always start with the financial return.

Growth and Improvement

Two other areas that differentiate not-for-profit communities from for-profit ones are growth and improvement. This comes back to the commitment and quality that not-for-profit communities offer, as they are committed to growing and improving so they can continue to provide quality services to their residents and seniors in the surrounding community—now and in the future.

In fact, many not-for-profit senior organizations have been around for over 50 years. These organizations have been at the forefront of improving and changing the field of aging services to better help older adults. 

In comparison, some for-profit organizations start with a financial goal in mind and then cash out once they’ve hit that goal. This leaves the older adults in those communities vulnerable to changes that may be brought with new owners.

Not-for-profits, on the other hand, don’t usually have an exit strategy. Instead, they are built for the long-term benefit of their residents and the overall community, not short-term financial gains. This includes tailoring the housing, health care, and community services they offer to residents to address specific needs within the community. 

Ultimately, not-for-profit retirement communities are different from for-profit communities because they are committed to their mission of providing the best service possible to their residents, and they reinvest the money from residents directly back into serving them and the community. This creates better living options for older adults where their quality of life is always the top priority.

Porter County’s Only Not-for-Profit Retirement Community

Pines Village Retirement Communities, Inc. is a nonprofit senior living community in Valparaiso, Indiana, with two campuses: Pines Village and Meridian Woods. Our nonprofit status means we put people before profits; quality before earnings. Our funds are committed exclusively to running and improving the Pines Village community, enhancing services for our residents.

Pines Village is privileged to give back to the Northwest Indiana community in many ways, including:

The Pines Village campus offers pet-friendly independent living apartments with the option to add assistive services à la carte or in packages. The Meridian Woods campus consists of maintenance-free paired homes and Campbell St. Cafe, which, in addition to being a restaurant open to the public, hosts events and acts as a meeting space for residents and local nonprofits.

At Pines Village, we celebrate life by enriching the lives of older adults. We pride ourselves on our culture, which is driven by a passion for serving the residents, visitors, and staff of Pines Village as well as the greater Valparaiso community. Explore our senior apartment availability, learn more about our assisted living options, or contact us with any questions today!

Jessica