Balancing the Not-for-Profit Difference with For-Profit Smarts

Robyn's Read | August 07, 2015

Why has Robyn Stone spent the past few months trying to convince LeadingAge members to start thinking more like their for-profit competitors?

We spend a good deal of time at LeadingAge talking about the not-for-profit difference -- that sense of mission, compassion and social accountability that is so deeply ingrained in our member organizations and sets them apart from their for-profit colleagues.

I believe strongly in the not-for-profit difference. It’s what brought me to LeadingAge 16 years ago and it’s what keeps me here.

So why have I spent the past few months trying to convince LeadingAge members to start thinking more like their for-profit competitors?

The answer is more complex than it appears.

Not-for-profit LeadingAge members need to continue operating mission-driven organizations. In fact, they need to expand their missions to reflect a growing emphasis on serving the nation’s rapidly expanding and increasingly vulnerable population of low-income older adults.

Mission is critical to the not-for-profit field. But that mission could soon be at risk unless it is supported by the kind of smart business practices and strategic thinking that you will often find in the for-profit world.

Indeed, combining good business sense with a strong mission is the best way to ensure that a not-for-profit organization will be able to continue offering high-quality services and supports even as it navigates the dramatic and disruptive changes that are coming our way.

Taking the Message to Boards

I’ve been taking this message to individual boards of directors for quite some time. This summer, I delivered that same message, in partnership with author and renowned speaker Jamie Orlikoff, during 3 well-attended “Governance for Strategic Success” workshops that LeadingAge sponsored in Denver, Philadelphia and Chicago.

During those sessions, Jamie urged board members to adopt strategic leadership instead of simply exercising “custodial compliance.” He offered a host of strategies for adopting what he called “best practices governance.” And he emphasized a really important point:

Good governance isn’t just the right thing to do. It actually strengthens the bottom line. And let’s face it. Our members need that healthy bottom line in order to continue doing their good work.

Changes Ahead

Our field is changing rapidly. Board members need to understand those changes sooner rather than later. And they need to make strategic decisions today so their organizations can continue to thrive tomorrow.

Here are a few of the coming changes that I’ve been urging boards to address:

  • Growing demand: The demand of older consumers for formal services will increase dramatically over the next few decades, while informal care from family members will be less available than it has been in the past. This will put tremendous pressure on our current long-term care systems. Can your organization meet that demand?
  • Decreasing resources: Older consumers of the future won’t have as many financial resources to spend on housing and services as their predecessors did. Many consumers won’t be able to afford the residential settings that you’ve worked so hard to develop. Will you be able to offer older adults of modest means more affordable options? 
  • More diversity: Current trends suggest that you will soon be serving a culturally diverse older population and employing a much more diverse workforce. To succeed, your organization will need to embrace diversity, respect all cultures, and take deliberate steps to identify and address the needs and preferences of consumers and workers from varying backgrounds. Are you ready?
  • A growing desire to age in place: You may continue building bricks-and-mortar campuses, but most older consumers won’t be moving to them. To remain relevant, you’ll need to expand your reach into the community where consumers want to live. This evolving consumer preference to age in place will require that you think differently about your business models, and find new ways to serve consumers and to train and support your staff. Can you pull that off?

Where Do Boards Begin?

Facing these and other looming issues can be daunting. But don’t let the challenges overwhelm you to the point of inaction. Instead, get started by trying these 4 steps:

  • Get educated. Make sure your board, management team, and frontline staff really understand national trends, as well as the market in which your organization operates today and will operate in the future. Get a handle on your community’s demographics, including the economic status of its residents. Then ask yourself how those demographics are likely to change over the next 20 years.
  • Get help. You can hire a consultant to help you conduct market research. But you can also gain important insights by reaching out to others in your community and asking them to help you understand what’s going on. Ask board members to touch base with their community partners, including health and social service providers, city planners, older adults and consumer advocates who can help you paint an accurate picture of your current and future market.
  • Find new partners. Always be on the lookout for new relationships that can offer you new perspectives and help you think differently about your organization and its role in the community.
  • Assess and plan. Evaluate all the information you’ve collected. Then, make plans for how your organization will change so it can address the changing needs of its community while remaining true to its mission.

A Hard Message to Hear

Most board members are receptive to what I have to say. Nonetheless, I understand that my message is not an easy one to hear, especially for organizations that need to work hard in the present to ensure that their organizations remain healthy over the short-term.

I get it. But current challenges are no excuse for ignoring future challenges.

Boards have to start thinking about tough issues today in order to ensure their organizations’ solvency tomorrow. These issues aren’t going away. And, left unaddressed, they’re only going to get worse.

So start asking those tough questions. But don’t wait too long. The future will be here sooner than you think.