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Nonprofit vs. For-Profit Retirement Communities: What’s the Real Difference?

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When you begin the retirement living search for your aging parent, you may find that there are both for-profit and nonprofit retirement communities to choose from. While for-profit and nonprofit communities often offer similar services and features, there are a few major distinctions between the way these types of communities operate. As you evaluate your choices, consider these important differences between nonprofit and for-profit retirement communities.

Organizational motivation

The most obvious distinction between for-profit and nonprofit retirement communities is their organizational motivation and structure. Around 80% of all residential care facilities are owned and operated by for-profit entities, and many are part of large, national corporate chains. For-profit communities have obligations to their stakeholders and are motivated to make a profit as a result. By contrast, nonprofit facilities are privately owned, and many are associated with religious organizations. While nonprofit communities must also make money to continue operating, they reinvest profits back into the community to make improvements to their programs and services, enhance the community’s campus, and ultimately benefit residents.


Quality of care

All senior care facilities that are licensed by the state are required to adhere to the same regulations to ensure the safety of residents. In terms of the quality of care provided, however, nonprofit and for-profit senior facilities may differ. For example, a study by the Center for Medicare Advocacy found that for-profit nursing homes had lower staffing levels, higher numbers of deficiencies cited by regulatory agencies, and higher numbers of deficiencies causing harm or jeopardy to residents when compared to nonprofit facilities. Although this study focused on nursing homes, most continuing care retirement communities include nursing home care and apply the same quality of care across their entire community.


Giving back to the community

Nonprofit retirement communities are often driven by an overarching mission to serve their residents and assist people in need. Most nonprofit facilities work to fulfill their mission by engaging in service efforts to benefit others, such as providing support to low-income individuals and volunteering for community organizations. Many older adults find peace of mind knowing that their retirement community closely aligns with their own values and needs.


As you begin looking for right retirement living fit for your parent, be sure to research how the retirement community is run. We recommend scheduling visits to nearby retirement communities to compare the quality of care, staff ratios, as well as the mission and values of different types of communities to find the best match for your parent’s needs.

Written by Bethany Village

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