Not for Profit Difference

The Not-for-profit Difference

Aging Services The Not-for-profit Difference

Standing the Test of Time


St. Martin de Porres Manor in Louisiana, serving its community

for 167 years.


Playing a crucial role in American society for more

than 250 years has earned not-for-profi t organiza-

tions the trust of their local communities and the

respect of the entire nation. Telling the not-for-profi t

story continues, as modern-day scholars stress the

importance of the not-for-profi t sector in our demo-

cratic system. Peter Drucker, a leading management

consultant, characterized not-for-profi ts as one of three

major institutions in America, the others being govern-

ment and business. His 1990 publication, Managing

the Not-for-Profi t Organization, suggests that govern-

ment’s role is to protect and oversee, and the role of

business is to generate an economy.

“The role of not-for-profi ts, as one of three major institu-

tions in America, is nothing less than to change lives.”3

—Peter Drucker

Benjamin Franklin penned these words

in the 18th century, acknowledging the

value of committed individuals coming

together to solve shared concerns through collective

action. Franklin’s Leather Apron Club was the vehi-

cle for his philosophy to become practice – the fi rst,

“not-for-profi t movement” in America.

A century later, French aristocrat Alexis de Tocqueville

suggested that communal action for the public good

was not only honorable, but was uniquely American.

His 1835 classic, Democracy in America, attests to this

belief as follows:

“Feelings and opinions are recruited, the heart is en-

larged and the human mind is developed, only by the

reciprocal infl uence of men upon one another…these

infl uences are almost null in democratic countries; they

must, therefore, be artifi cially created, and this can only

be accomplished by associations.”2

—Alexis de Tocqueville

Not-for-Profits: Standing the Test of Time

“Th e goo d that men may do separately is small compared with wh at they may do coll ectively.” 1 –Benjamin Franklin


Lester M. Salamon (Johns Hopkins University), a

leading expert on the not-for-profi t sector, suggests

that this sector is the centerpiece of American culture.

His book, The Resilient Sector (2003), offers facts and

fi gures on the size, scope and impact of this sector on

both our economy and way of life.

“[The not-for-profit sector] represents a faith in the

capacity of individual action to improve the quality of

human life.”4

—Lester Salamon

Jim Collins, best known for his Good to Great book,

also wrote a monograph entitled Good to Great and

the Social Sectors: Why Business Thinking Is Not the

Answer (2005), in which he details special characteris-

tics of mission-driven versus profi t-driven enterprises.

“A great organization is one that delivers superior

performance and makes a distinctive impact over a long

period of time. For a business, fi nancial returns are a

perfectly legitimate measure of performance. For a social

sector organization, however, performance must be

assessed relative to mission, not fi nancial returns.”5

— Jim Collins

Many not-for-profit aging-services organizations

have existed in the same communities for genera-

tions, offering a stability that fosters peace of mind

for both older Americans and their families.

Twenty–four of the AZ100 have been in

operation over 100 years. The average

inception date of the AZ100 organiza-

tion is 1937. 6

— AAHSA Ziegler 100, April 2007


Neville Manor in Massachusetts, serving its community for 228 years.


Telling Our Story — Pers onal Testimonials


“Having worked in senior services for over 20 years, and

having worked in ‘for-profi t’ and ‘ nonprofi t,’ I can tell

you that there are tremendous differences in the ‘envi-

ronment or climate’ of the community. In the for-profi t

community, emphasis was on the ‘numbers’ and I began

feeling like a number as a staff member. At RHF, I feel

like I am part of a family; myself and the entire staff are

committed to the mission. We are not here for the mon-

ey; we believe in the philosophy of the company, and the

residents benefi t from the commitment and compassion

of the staff. Several of my residents have told me that

there is so much love and life in the building, and that’s

why I work for RHF…it is very gratifying.”

—Stacey A. Montero, Property

Manager, St.Catherine Retirement

Community/Retirement Housing

Foundation (RHF), Florissant, Mo.

“In my 26 years in long-term care, I’ve worked in both

for-profi t and nonprofi t organizations. Nonprofi ts pro-

vide better quality because our focus is on our mission

of service to the community versus the pressure to deliver

on quarterly earnings. We attract committed community

volunteers to lead us and enhance the quality of life of the

people we serve. We provide higher staffi ng ratios, living

wages and benefi ts to our employees and their families.

These advantages translate into better quality and conti-

nuity of care and the ability to risk innovation.”

—Kevin Jones, Chief Operating

Offi cer, Saunders House,

Philadelphia, Pa.

“If it wasn’t for the help I got from my organization, I

probably wouldn’t have even gone back to school. It’s hard

for someone who is self-supporting, and can’t afford the

tuition, to do it on their own. I got the days off I asked for

and needed, so I wasn’t exhausted from school. It made

me appreciate working here even more.”

—Tabitha Menendez, Certifi ed

Nursing Assistant, Rosewood

Heights Nursing Facility,

Syracuse, N.Y.


“At a member council meeting in July 2007, residents

were asked for their comments about the nonprofit

difference. Here are some of their words:

• ‘We are not driven by a need to make

money.’

• ‘Because a not-for-profi t is service-driven,

not profi t-driven; we don’t cut corners.’

• ‘Our people are driven by the desire to

make a good community instead of being

driven by a ledger sheet.’

• ‘They are caring people.’ ”

—Judith A. Lamoureux, Director of

Sales and Marketing, The Atrium at

The Cedars, Portland, Maine

“It’s a not-for-profi t. People here are committed to care

for the elderly. When we toured, one of the staff ’s mother

was here, and that said something about the place. The

staff knows everybody. My mother has lived at three or

four other communities and they were nothing like this.”

—Jeanne W., daughter of resident

Marie S. at Franciscan Communities/

Addolorata Villa, Wheeling, Ill.

“I’m proud to be a member of the staff at Marjorie Doyle

Rockwell Center, a not-for-profi t residence for individu-

als with Alzheimer’s disease in Cohoes, N.Y. We recognize

that the needs of the residents come fi rst, and we know

how important it is to treat them with the compassion,

dignity and respect that they deserve as senior citizens and

as human beings. I’ve worked for both for-profi t and not-

for-profi t providers, and it’s a great feeling to be a part of

the not-for-profit mission and a strong commitment

to helping seniors and their families.”

— Barbara Ashley, Unit Secretary,

Marjorie Doyle Rockwell Center/

The Eddy, Cohoes, N.Y.


Setting the StandardOur nation’s not-for-profi t housing, community service

and long-term care providers are on a mission. Their

objective: to provide the highest quality and most com-

passionate care to those they serve. The good news for

older people, persons with disabilities, their families

and the entire aging-services profession is that they are

succeeding.

At a time when not-for-profit aging-services orga-

nizations are under intense government and media

scrutiny, not-for-profits are showing by example

that there is a difference when it comes to qual-

ity. By continuing a tradition of mission-driven,

consumer-centered management and competent,

hands-on care, not-for-profits set the standard in

the continuum of housing, care and services for

the most vulnerable Americans.

Not-for-Profi ts: Fulfilling Our Miss ion

What are not-for-profit responsibilities?AAHSA’s values guide the work of our members, pro-

viding an example to aging-services organizations and

motivating them based on following ideals:

• Quality that people can trust.

• Services people need, when they need them,

in the place they call home.

• Dignity of all persons at every stage of life.

• Mission-driven, not-for-profi t values.

• Advocacy for the right public policy, for

the right reasons.

• Leadership through shared learning.

Are we fulfilling our responsibilities?Diana Aviv, president and CEO of the Independent

Sector, testifi ed on July 24, 2007, at a hearing on tax-

exempt charitable organizations held by the House

Ways and Means Subcommittee on Oversight. In her

testimony, Aviv observed:

“No matter who you are, or where you are in this coun-

try, your life is touched and enhanced by the work of

nonprofi t organizations.” 7

— Diana Aviv


“The ultimate form of generosity is the investment in people, property and ideas.” 8

“Generosity helps to distribute rather than concentrate wealth and oppor-tunities in society. Generosity is the moral juice that has kept us heading towards the founders’ ideals.” 9 — Claire Gaudiani Author, The Greater Good

Poydras Home in Louisiana, serving its community for 190 years.


Mission-Driven ValuesNot-for-profi t organizations manage their fi nancial

resources in accordance with their missions. Many

of these housing and service providers were founded

by faith-based and civic groups of rich tradition, and

their long-standing values are refl ected in their gover-

nance and management.

They are not driven by daily pressure to increase their

“bottom line” for owners, investors or shareholders.

The pressure to make a profi t is felt the most by the

consumer, due to an inevitable array of cost-cutting

reductions in staffi ng, services, supplies and overall

quality.

Quality, not earnings, is the barometer of a not-for-

profit organization’s efforts. All proceeds in a

not-for-profi t are reinvested in improving the physical

environment, serving more people, offering more

and better accommodations and services and,

ultimately, fulfilling the organization’s mission.

Claire Gaudiani (Yale University), author of The Great-

er Good (2003), often speaks of generosity within the

American culture. Translating our mission-driven,

not-for-profi t values into policies, procedures and

daily operations is clearly an enduring example of gen-

erosity in action.

AccountabilityNot-for-profi t organizations are accountable to vol-

untary boards of directors, who donate their time and

talent to ensure that ethical management, fi nancial

integrity and quality services are maintained.

Not-for-profit finances are always open for public

inspection; with such information readily available

on the Internet, the information is literally at our

fingertips.

Volunteer board members also have their fi ngers on

the pulse of evolving local community needs, there-

by bridging internal and external communities.

Not-for-profits have a responsibility to be active,

contributing members of their localities. Social

accountability opportunities and measures continu-

ally help not-for-profi ts not only to identify but also

to exercise leadership in meeting local community

needs.

We all desire compassionate, knowledgeable and

dedicated staff overseeing the needs of our loved

ones. Not-for-profi t organizations recognize that staff

satisfaction and commitment are related to having

suffi cient numbers of staff, fair wages and benefi ts,

fl exibility when needed, continuing education/growth

opportunities and an environment of respect.


Quality Measures Not-for-Profi t For-Profi t

Total Defi ciencies 11.67 19.08

Serious (F+) Defi ciencies 0.74 1.25

Not-for-Profi t Nursing Homes Have More Nursing Staff than For-Profi ts10

• Residents receive 6.1% more hours per day

of licensed practical nurse care.


of certifi ed nursing assistant care.


of registered nurse care.

• Residents receive 22% more hours per day

of care from other licensed staff.

Not-for-Profi t Nursing Homes Have Signifi cantly Fewer Total and Serious Defi ciencies Than

For-Profi t Homes11

The mission of AAHSA Quality First is to achieve excellence and earn the public’s

trust in aging services. Quality First was launched in 2002 by three national associations

representing providers of aging services. Not-for-profit providers have a longstand-

ing tradition of leading with quality. Quality First reinforces that tradition with a

commitment to maximize quality of care and quality of life for older adults.

How Do We Know This? Research Affi rms Our StoryNumerous credible sources have conducted research and reported fi ndings that support our leadership in quality

housing, care and services.

Not-for-Profi ts: Leading With Quality

R

For profi t 19%

Quality Outcome Measure: Percentage of Skilled Nursing Facility Patients Discharged Home in

First 30 Days, 2004 (higher is better)12

Not-for-profi t 29%

0

5

10

15

20

25

30


From “For-Profi t versus Not-for-Profi t Delivery

of Long-Term Care”:

“…for-profi t long-term care facilities had higher rates

of acute care hospital admission of residents because of

several quality of care related diagnoses than did not-

for-profi t facilities.”14

From a General Accounting Offi ce (GAO) Report

on HUD Housing:

“For-profi t and limited-dividend property owners had

a higher percentage of opt-outs* than other types of

property owners…conversely, nonprofi t owners had

the lowest percentage of opt-outs at two percent. The

percentage of foreclosures and enforcement actions for

nonprofi ts was also slightly lower [than] for all other

types of ownerships.” 15

*Note: “Opting out” occurs when a housing provider decides to end its participation in a federal program serving low-income residents.

From a 2007 Publication of the Joint Center for

Housing Studies at Harvard University:

“The unassisted private housing market generally

does not provide sufficient profit [for] for-profit

developers to build or maintain decent quality

housing that is affordable to lower income house-

holds. In comparison with for-profi ts involved with

subsidized housing, nonprofi ts typically focus on

more distressed areas and their developments are

typically targeted to harder-to-house populations.”

“Supporters of nonprofi ts point to their commitment

to produce housing that is affordable to lower income

people over the long-term, as well as to stimulating

investment in neighborhoods in need of revitaliza-

tion…. In addition, nonprofi t housing providers are

credited for their connections to community and

residents, their commitment to providing services for

residents, and their potential for accessing affordable

land and buildings.”16

Business Segment Percentage of CNA LTC Insureds (2004)

Number of Closed Claims*

Average Paid Indemnity

Average Paid Expenses

Average Total Paid*

Not-for-Profi t 45% 526 $82,562 $28,803 $102,056

For-Profi t 55% 1,808 $119,152 $35,065 $146,88

Not-for-Profi ts Experience Fewer Liability Claims and ExpensesMix of Insureds and Severity of Closed Claims by Business Segment13

* The number of closed claims includes claims with no paid expense; therefore, the denominator used to calculate average paid expenses

may be different from the denominator used to calculate average paid indemnity. As a result, the average total paid may not be equal to

the average paid indemnity plus the average paid expenses.


Warren Haven in New Jersey, serving its community for 173 years.


From Advocate - “Bad Nursing Home Care Persists”:

“Not-for-profit nursing homes generally provide

better care than those operated by for-profit, an

analysis of state inspections for some 16,000 homes

nationwide found.”17

From “Multifamily Properties: Opting In, Opting

Out and Remaining Affordable”:

A 2006 study found that only .9 percent of all U.S.

Department of Housing and Urban Development

Section 202 affordable senior housing communities

chose to ‘opt out’ of the program and market the units

for another use.18

From “Nursing Home Profi t Status and Quality

of Care: Is There Any Evidence of an Association?”

“This review suggests that despite increased awareness

and numerous high-profi le government reports and

publications, residents of for-profi t nursing homes

were more likely to be the recipients of poor qual-

ity compared with similar residents in not-for-profi t

facilities.”

“The pattern of quality indicators indicates that

not-for-profit homes are less likely to have poor

quality-of-care practices and outcomes. For-profi t

nursing homes were found to have provided lower

quality of care when judged by structure, process

and outcome criteria…residents of for-profi t nursing

homes were more likely to be the recipients of poor

quality compared with similar residents in not-for-

profi t facilities.” “Patients in for-profi t homes tended

to have higher rates of pressure ulcers.”19

From “Testing for Ownership Mix Effi ciency:

The Case of the Nursing Home Industry ”:

“The policy implication is that more quality of care

per dollar might be obtained by attracting a greater

percentage of nonprofi t nursing homes into most

market areas.”20

From “For-Profi t vs. Not-for-Profi t Hospice:

It Is the Quality that Counts”:

“For-profit hospices, being more focused on the

‘bottom line,’ are ‘selecting’ patients who, because of

the nature of their terminal illnesses (non-cancer)

and where they reside (nursing homes), are more

likely to have a length of stay exceeding 90 days, and

require a lower percentage of skilled nursing services,

and hence, cost less to care for.”21

From “Does Investor Ownership of Nursing Homes

Compromise the Quality of Care”:

“Investor-owned nursing homes provide worse care

and less nursing care than do not-for-profi t or public

homes.”22


Not-for-Profi ts: Advancing th e Greate r Goo d Th rough Leaders hip and Innovation

Not-for-profi t organizations consistently apply their

resources to streamline and enhance their housing,

health care and services to meet the evolving needs and

wants of consumers. Initiatives of change, encompass-

ing philosophies and practices of person-centered care,

deinstitutionalization, healthy work environments and

empowered staff, are also growing.

The following AAHSA members represent just a few

examples of not-for-profi t leadership and innovation:

• Specialized, Urban Care – In the mid-1800s,

Eliza Simmons Bryant turned her concern for

the lack of care options for aging black Americans

into action by opening the fi rst black charitable

organization in the region and one of the oldest

African American based nursing homes nation-

wide. For more than a century, the Eliza Bryant

Village in Cleveland, Ohio, has pioneered

inner-city, specialized senior care.

• All-Inclusive Care – Founded in the early 1970s

by citizens concerned for the frail elderly and

their lack of community service options, the On

Lok organization in San Francisco, Calif., was the

fi rst to provide a comprehensive array of medical

and support services to enable seniors to live

at home as long as feasible. The Program of

All-Inclusive Care for the Elderly (PACE) evolved

from the On Lok model.

• Green Houses – The Mississippi Methodist Senior

Services organization transformed its nursin home

culture by developing Green Houses in Tupelo,

Miss., to accommodate elders needing long-term

care with increased privacy, community and choice

in small, home-like settings. Person-centered care,

empowered staff and universal worker models are

all aspects of this innovative care model.

• Elder Abuse Prevention – The Weinberg Center

of the Hebrew Home at Riverdale, N.Y., “provides

the nation’s fi rst and only long-term care based

shelter dedicated to elderly victims of emotional,

physical and fi nancial abuse.” 23 In addition,

the center offers community training programs

on the signs and symptoms of elder abuse as well

as elder abuse prevention/intervention services.

“Consumer Reports’ analysis found that not-for-profi t homes are more likely to provide good care than for-profi ts, based on our analysis of inspection surveys, staffi ng and quality indicators.” 24


Maple Knoll Village in Ohio, serving its community for 159 years.

America’s future is fi lled with older faces. By 2020, one

in six Americans will be age 65 or older. AAHSA and

its members are working today to ensure that housing,

community services and long-term health care services

not only meet the needs of tomorrow’s elderly and dis-

abled Americans, but exceed their expectations.

AAHSA is the leader in joining providers, poli-

cymakers, researchers, advocates, regulators and

consumers to develop policies and practices that

continue to make our field the center of innovative,

quality housing and care for those who need it most

in our society.

Not-for-Profi ts: Th ere Is a Diff ere nce

Setting the Standard

Mission-Driven ValuesAccountability

Quality

LeadershipInnovation

Six Elements – Numerous Examples

One Clear Difference: People Before Profi ts


1Isaacson, Walter. Benjamin Franklin: An American Life. New York: Simon and Shuster.

2Tocqueville, Alexis de. 1835. Democracy in America, vol. II, the Henry Reeve text, as revised by Francis Bowen (Vintage Books, 1945), p.117.

3Drucker, Peter. 1990. Managing the Nonprofi t Organization. New York: Harper Collins.

4Salamon, Lester M. 2003. The Resilient Sector: The State of Nonprofi t America. Washington, DC: Brookings Institution and the Aspen Institute.

5Collins, Jim. 2005. Good to Great and the Social Sectors. www. jimcollins.com. Boulder, CO.

6AAHSA Ziegler 100. 2007. Ziegler Capital Markets, a division of B.C. Ziegler and Company.

7Aviv, Diana. July 24, 2007. Testimony before United States House of Representatives, Ways and Means Subcommittee on Oversight, Hearing on Tax-Exempt Charitable Organizations.

8Gaudiani, Claire. 2003. The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism. New York: Henry Holt and Company.

9Gaudiani, Claire. 2003. The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism. New York: Henry Holt and Company.

10CMS Data. 2007. National Nursing Home Survey.

11“Quality of Care in Nursing Homes: An Analysis of Relationships Among Profi t, Quality, and Ownership,” (Table 2). 2003. Medical Care, Volume 41, Number 12, pp 1318-1330.

12“Understanding Temporal Changes in and Factors Associated with SNF Rates of Community Discharge and Rehospitalization.” June 2007. Andrew Kramer, Theresa Eilertsen, Glenn Goodrich, Sung-joon Min. University of Colorado at Denver and Health Sciences Center.

13Comparison of Claims Data in Long Term Care – January 1996 through March 2005. September 2005. CNA HealthPro.

14“For-Profi t versus Not-for-Profi t Delivery of Long-Term Care.” Jan. 2, 2007. Kimberlyn M. McGrail, Margaret J. McGregor, Marcy Cohen, Robert B. Tate and Lisa A. Ronald, Canadian Medical Association Journal.

15General Accounting Offi ce (GAO) Report on HUD Housing. http://www.gao.gov. 07-290.

16Joint Center for Housing Studies at Harvard University. http://www.jchs.harvard.edu/publications/rental/revisiting_ rental_symposium/papers/rr07-12_bratt.pdf

17Advocate - “Bad Nursing Home Care Persists.” Aug. 6, 2006. Consumer Reports.

18“Multifamily Properties: Opting In, Opting Out and Remaining Affordable.” January 2006. U.S. Department of Housing and Urban Development/Offi ce of Policy Development and Research.

19“Nursing Home Profi t Status and Quality of Care: Is There Any Evidence of an Association?” April 2005. Michael B. Hillmer, Walter P. Wodchis, Sudeep S. Gill, Geoffrey M. Anderson and Paula A. Rochon, Medical Care and Research Review, Volume 62, No. 2.

20“Testing for Ownership Mix Effi ciency: The Case of the Nursing Home Industry.” February 2005. Rexford E. Santere and John A. Vernon, National Bureau of Economic Research.

21“For-Profi t vs. Not-for-Profi t Hospice: It Is the Quality that Counts.” 2002. Editorial, Journal of Palliative Medicine, Volume 5, No. 4.

22“Does Investor Ownership of Nursing Homes Compromise the Quality of Care.” 2001. Charlene Harrington, PhD, Steffi e Woolhandler, MD, MPH, Joseph Mullan, PhD, Helen Carrillo, MS and David U. Himmelstein, MD, American Journal of Public Health, 91:1452-1455.

23“23 The Hebrew Home at Riverdale website: http://www.hebrewhome.org/abuserecovery.asp

24“Nursing Homes: Business as Usual,” September 2006. Consumer Reports.


The Heritage in California, serving its community for 154 years.


The members of the American Association of Homes and Services for the Aging (www.aahsa.org)

help millions of older people, their families and those who support them every day through

mission-driven, not-for-profi t organizations dedicated to providing the services that people need,

when they need them, in the place they call home. Our 5,700 member organizations, many of which

have served their communities for generations, offer the continuum of aging services: adult day

services, home health, community services, senior housing, assisted living residences, continuing

care retirement communities and nursing homes. AAHSA’s commitment is to create the future of

aging services through quality people can trust.

AAHSA’s Center for Aging Services Technologies (CAST) leads the national charge to develop and deploy emerging

technologies to improve the aging experience in America. Established in 2003, CAST has grown to be a national

coalition of more than 400 technology companies, aging-services organizations, research universities and

government representatives. To advance its agenda, CAST produced and disseminated a vision video depicting technology’s potential for

transforming aging, published several white papers and sponsored symposia, demonstrations and workshops.

Creating th e Future of Aging Services Th rough Innovation

AAHSA’s Institute for the Future of Aging Services (IFAS) conducts research and publishes landmark reports across the

continuum of housing and long-term care services with the overarching goal of improved quality. IFAS is committed to

the development of nationally replicable, innovative models of housing and supportive services and is a recognized leader

in the study of long-term care workforce issues. Recent applied research projects include, but are not limited to, Better Jobs Better Care and the

National Affordable Housing with Supportive Services Initiative. When applied research, policy and practice are connected, evidence-based

approaches emerge that facilitate continuous improvement in care and service delivery.

Many of AAHSA’s members have been involved in applied research and innovative programs since their founding.

It’s no surprise that AAHSA created the Institute for the Future of Aging Services and the Center for Aging

Services Technologies to advance our commitment to research and innovation.

Documents

Not for Profit Difference