In measuring the social contribution that LeadingAge members render to their communities, a bit of Mark Twain wisdom comes to mind.
“Always do the right thing; this will gratify some people and astonish the rest,” he is reported to have written, in a 1901 note to the Young People’s Society at Greenpoint Presbyterian Church in New York City.
People would be astonished to find what LeadingAge members contribute in social accountability. For a couple of LeadingAge members, the measured benefit from their presence in their communities ranges from $10-20 million. But, it’s more than just about money.
If We Did Not Exist, What Would be Lost?
David Erickson, senior vice president and general counsel for Covenant Retirement Communities, based in Skokie, IL, says, “We really want to be in the position to be able to answer, if asked: ‘What if Covenant Village Northbrook (Chicago) did not exist? Would there be a loss to the social fabric of the community?’ Social accountability helps us to identify that benefit. Just from a philosophical position, it’s just the right thing to do.”
According to Erickson, that community benefit totals $10 million for its 12 life plan communities coast-to-coast, as well as its at-home care services, and other sites. Covington operates in 9 states, all of which have an interest in what the organization contributes to its communities. He says that while Covenant always reported its financials and other metrics on an annual basis until recent years, it never took the time to measure its community benefit.
It turns out, it's an exercise that inspires.
"There is a high level of engagement and acceptance from the residents, who help us compile the information," Erickson says. "They appreciate being able to assign a dollar amount to the impact we have on the community—it's a way for us to differentiate ourselves from for-profit communities.”
He added that a big part of the impact comes from the money communities raise for their benevolent funds, which help sustain residents who have run out of assets. But they also measure direct contributions to outside organizations, as well as volunteer hours residents and staff provide to other nonprofits. For example, he cited one community in which residents assist in an English-as-a-second language program.
Erickson also says that documenting social accountability comes in handy when making the nonprofit case to community leaders. Covenant has shared the information in such matters as zoning, variances, and even state policy changes.
“This information elevates our work, and we get good feedback on it," he says. "Ultimately it is a key component to our nonprofit status … and the overall mission of our organization."
Creating Systems to Quantify Activities
At Acts Retirement-Life Communities, community benefit comes in at around 5% of operations—about $20 million across 22 nonprofit life plan communities in 8 states serving 9,000 residents. Jefferson Kaighn, executive vice president & chief administrative officer, personally coordinates social accountability throughout the organization.
“Measuring social accountability matters for all nonprofit organizations,” Kaighn says. “We happen to be in aging and senior services. But I think it is equally important for anyone who is considered charitable and has some level of tax-exempt status.”
While stories about community benefit are highly valuable, he says the benefits of measuring social accountability give communities more than great stories to tell; it provides a quantifiable impact. It is validation and offers a specific measurement of benefit to the greater community. To accomplish this measurement, Acts trains staff to measure socially accountable activities using licensed software. This collected data is, in turn, shared in an annual report to the organization’s audiences—residents, staff, communities, boards and local governmental officials.
“We believe this demonstrates our true charitable nature and the impact we have on our greater communities,” says Kaighn. “It communicates … that we are contributing mightily to those communities and our communities are better off because we exist in them.
Acts Retirement-Life Communities also chooses to pay property taxes, or payment in lieu of taxes, in many places. This, Kaighn says, makes them good corporate citizens as well. While the organization may be unusual among providers in this regard, more and more organizations are looking to demonstrate their social accountability to protect the financial viability of their mission.
“I believe the most immediate threat to providers is scrutiny by their county property tax assessor. Local governments are under chronic pressure to enhance their revenues,” says Pamela Kaufmann, a partner at the Hanson Bridgett law firm, who specializes in working with LeadingAge members on such issues. “And life plan communities serving the upper middle class are coming under attack across the country.”
She says that providing and recording social accountability has other benefits. Aging services providers (and in particular life plan communities) should care about a vibrant social accountability program. Kaufmann says such a plan could also build social capital within the community, insulate them from public criticism, and identify unmet charitable needs in their community. All this enhances mission, she maintains. To accomplish this, she notes that there is software available that offers a systematic method and plan for defining and collecting data on social accountability.
Trina Hackensmith, vice president at Lyon Software, which is designed for this purpose, notes that increasingly life plan communities are operating in a “prove it” world.
“It’s not good enough just to say you’re giving back to your community, you need to back it up with evidence,” she says. “You have to demonstrate that you are using the resources they’ve entrusted to you (i.e., tax-exempt dollars) in a way that benefits the broader community, not just your residents.”
According to Hackensmith, organizations are becoming more strategically focused on social accountability initiatives. She says that many senior living communities have a long history of serving the aged. Social accountability is a way to give their good work “feet” to get traction, to have good deeds recognized.
“I believe that the smartest communities are those who have found innovative ways to collaborate with other nonprofit and/or for-profit organizations and leverage resources to make their communities safer, healthier, better places for everyone, especially seniors,” says Hackensmith.
Hospitals are a close cousin to the long-term care sector, as about 60% are classified as nonprofit (as opposed to for-profit or governmentally owned). Sara Rosenbaum, J.D., a professor at George Washington University, notes that hospitals are required to follow very strict IRS guidelines in measuring and stating community benefit. She and a research team released a study in December 2016 titled Improving Community Health through Hospital Community Benefit sending: Charting a Path to Reform that may offer insight to LeadingAge members about what their social accountability future could hold. She supports making the social accountability case.
“Yes, I think it’s good thing,” Rosenbaum says. “It’s good to be seen as a socially responsible health care provider and ingrain the sense of mission … The bottom line is that I think it’s healthy even if you can’t say hospitals with community benefit obligations perform differently somehow.”
Cory Kallheim, vice president of legal affairs and social accountability at LeadingAge, believes for the time being that federal tax exemption status for members is not at risk. There was, he says, nothing in the recent tax bill that addressed 501(c)(3) status. But he added that the “vast majority” of members are not yet adequately capturing and telling their story.
“It’s the right thing to do. Being socially accountable is very good for the brand,” he says. “Our members have a lot of touch points in the community, and they need to tell their stories."
There are, Kallheim stresses, other advantages, from being considered as the premier employer in a community to helping with fundraising.
“It can be tough to do, but it makes an impact on the optics of the community,” Kallheim adds.
Erickson agrees with that assessment. He says Covenant’s program is a challenging one that amounts to extra work for the staff and expense for the organization.
“But, if we didn’t do this work all those stories would be lost,” says Erickson. “It’s nice to be able to say we have a day-to-day impact. We can look back to see this work is accumulating over time. It’s been some years now and it … respects all the work that has been done in the past.”
John Mitchell is a writer who lives in Cedaredge, CO.