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Not-for-profit care homes
A not-for-profit care home in the UK is a residential setting for older people or those with disabilities who need extra care and support, which reinvests surplus income back into the home.
Any extra income generated is put back into the home to boost the support given to residents as well as the facilities of the care home and its services.
There are over 3,000 not-for-profit care homes, making up nearly a fifth of residential settings in the UK.
A total of 672 of these are run by local authorities and the NHS. The remaining 2,465 homes (15%) are run by charities and voluntary organisations.
Here are the key elements of not-for-profit care homes in the UK:
1. Management and ownership
Not-for-profit care homes tend to be run by charities, local authorities and voluntary bodies.
Charities that run care homes in the UK include Royal British Legion and Friends of the Elderly.
Some care homes are also run by faith-based charities, cooperatives and social enterprises.
2. Reinvestment of all surplus income
Not-for-profit care homes are characterized by the way they reinvest any surplus income left, after all expenses have been paid out, into improving the home and its facilities.
Not-for-profit care homes focus on people and not making a profit, so any surplus income is not given to the owners or the shareholders and investors.
Reinvestment back into the care home can include upskilling and training staff and improving facilities.
Chris Poole, director of business development at Sanctuary Care reveals that as a charity, they reinvest their surplus income “into the things that matter most for our residents and staff. This includes ongoing training for staff so their careers can flourish, to providing resources to support our team’s physical and mental wellbeing. We also continually invest money back into our care homes, so they are inspiring places that our residents are proud to call home.”
3. Types of care
Care homes that are not-for-profit are similar to private providers in that they tend to offer residential care, nursing care and specialised dementia care. Some also offer care for people with disabilities.
Some care providers offer care to specific groups of people. For example, Royal Star and Garter charity offers residential care to ex-Service people and their partners who are living with dementia or a disability.
4. Fees for not-for-profit care homes
Residents still pay care home fees if they are over the income threshold when they live in a not-for-profit care home, with some homes charging the same or more as private care providers.
Not-for-profit care homes will also receive an income from local authority funded residents.
Many are charities so they will also receive donations or money from fundraising activities.
No cap on fees
There is no cap on what not-for-profit care homes can charge, according to Liz Jones, policy director for the National Care Forum (NCF).
“The bottom line is they need to run a sustainable business so they still need to charge fees that will cover the costs of running the care home and providing the care. Most not-for-profit care homes have a balance of self-funding residents and local authority funded residents.”
Care for Life Promise
Not-for-profit care provider Brendon Care offers residents a Care for Life Promise, which pledges that when a resident moves into one of their homes, they will never ask them to leave due to lack of funds.
They say: “This gives enormous comfort to both people seeking care and residents who already live with us. The policy also gives extra reassurance to the families of those who have moved into one of our care homes.
“Care for Life is a charitable third-party top-up payment that can support those residents whose funds may have run down to the threshold set by the local authority. Should personal funds reach that point, we will agree the amount the local authority will contribute so that it fairly reflects the needs and cost of caring for the person in our care.”
The Care for Life promise does stipulate that a financial assessment form is filled in, before moving into the home, containing detailed and honest information. In addition there can be no financial mismanagement during the resident’s stay.
Greensleeves Care and Lilian Faithfull make a similar pledge that residents will never be asked to leave for financial reasons.
5. Standard of care
The focus of a not-for-profit care home is reinvesting surplus income in order to improve the care home and the service it provides. This means that hopefully they should provide a high standard of care where the wellbeing of the resident is prioritised.
All are subject to the same inspection process as private care providers by the country’s care regulator such as the Care Quality Commission (CQC).
If the care provider has charity status, it is also regulated by the Charities Commission which ensures it is benefiting the public.
6. Staffing
Not-for-profit care homes are often able to attract more volunteers especially if they are a charity as people will be more willing to volunteer for a charity rather than a private provider. This brings more diversity into the care home and helps boost staff numbers.
NCF’s Liz Jones says the very nature of being a not-for-profit care home “enables them to put money into innovation and pay their staff better leading to better retention rates and staff consistency which is a key driver of quality”.
7. Benefits of living in a not-for-profit care home
Simply by not being beholden to shareholders gives not-for-profit care providers more flexibility and freedom.
Quantum Care states that “Being a not-for-profit Community Benefit Society means that we do not have any shareholders and therefore we do not have to place any kind of priority on the payment of dividends.
“This in turn means that we can focus entirely on the welfare of our residents, maintaining their priority at the heart of all we do. We invest our resources into the quality of our services and the experience that our staff and care homes can provide to our residents as well as reaching out to as many people in need that we can.”
There are many benefits according to the National Care Forum, which represents not-for-profit care providers, with its policy director, Liz Jones saying: “Not-for-profit care homes tend to be based on community activism. They want the residents to live their best lives they can within an ethical framework. The fact that they don’t have shareholders and don’t have to think of extracting any profit they make is a big difference in how they operate compared to other care providers
“This is fundamentally the beating heart of what a not-for-profit care home is.”