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Community responsibility.

If the government investigated your nonprofit organization to determine if it deserved its tax-exempt status, how would you react? What evidence could you provide? The need for nonprofits to enhance--and document--their social accountability programs is greater than ever. Sen. Charles Grassley (R-Iowa), chairman of the Senate Finance Committee, has begun investigating how not-for-profits conduct their business and whether they deserve their tax-exempt status. Grassley is currently investigating hospitals, but he has expressed interest in analyzing this difference in long-term care.


If Grassley believes the difference is negligible or nonexistent, nonprofit long-term care organizations could be required to pay property taxes and other fees despite their work in the community. In April, Larry Minnix, president/CEO of the American Association of Homes and Services for the Aging (AAHSA), penned a letter to nonprofits on their responsibility to their communities (see "Doing Good and Doing Well," p. 60). While these facilities fulfill this responsibility by providing charity within their communities and in their greater communities, they may be required to prove this to investigators in the future.

What Is Social Accountability?

According to AAHSA, "Social accountability is a measure of an organization's commitment to its mission, its stakeholders, and society. It is also a process for planning, budgeting, reporting, and evaluating these community benefits." Kay Kallander, senior vice-president of strategic planning at American Baptist Homes of the West (ABHOW), says that this responsibility "brings value to the communities in which we work." Based in Pleasanton, California, ABHOW has 30 communities throughout California, Washington, and Arizona. "We want to be focused on enhancing these communities and towns beyond just our own business pro forma," she adds.

Wesley Towers, in Hutchinson, Kansas, follows the same philosophy. "I believe that social accountability means being transparent and demonstrating this to our community and stakeholders," says Ray Vernon, president/CEO of Wesley Towers. "We provide services to elders beyond what the public would normally want to do and fund. We provide a quality of life for our residents that appreciates and recognizes their important contributions to our community, state, and nation." Wesley Towers advocates long-term care by training others and being active in the field, and it promotes quality and excellence in service to seniors.

Fulfilling Community Needs

Social responsibility has always been a part of ABHOW's culture, and several years ago the organization began tracking, articulating, and sharing its efforts. "But I would be remiss if I gave any impression that our predecessors were not attentive to this, as well," Kallander explains. "We're just doing an extended job of capturing this information."

Wesley Towers has had an ongoing formal philosophy to highlight its partnership and citizenship to its stakeholders since 1999. "Our first demonstration of this was to the Hutchinson City Council." Vernon says. "At that time (and it still somewhat exists today) there was a perception that not-for-profit retirement communities catered to the wealthy and provided little social benefit. Our goal then, as today, was to demonstrate that we do serve those in need and provide many social and community benefits worthy of our 501(c) designation and tax exemptions."

Both ABHOW and Wesley Towers provide an essential responsibility that is common among nonprofits: They provide charitable care to residents who are unable to pay. "If a resident in an ABHOW community runs out of funds," Kallander notes, "he or she is never asked to leave and is given all the care needed." At Wesley Towers, no resident has ever had to leave the facility because of an inability to pay for care or services.

Long-term care organizations are also major employers in their communities and make important economic contributions to those communities. "It is our philosophy," Vernon says, "to share our facilities and resources as much as possible without jeopardizing the needs of our residents." Each ABHOW community develops programs that meet the needs of its particular location.

To contribute to its external community, a nonprofit organization can:

* Provide training, education, and employment opportunities for healthcare professionals throughout the community.

* Offer scholarships to employees for nursing, management, and certification programs.

* Provide local, state, and national leadership from management in the interest of issues that affect older Americans, such as healthcare, housing, and wellness.

* Serve as a polling place for local, state, and national elections.

* Invite local public agencies to visit and voice their needs.

* Reach into the community by providing meeting space and free clinic services.

* Extend transportation services using facility buses.

* Set up a hotline for seniors to call for resources or information.

* Operate a Meals On Wheels program.

* Knit caps for premature babies in neonatal intensive care units.

Tracking Accountability

Providing charitable services to the community is one part of social responsibility; the other is tallying that contribution and relaying it to stakeholders. "The hardest thing is to track it," Kallander explains. "You all are probably doing it, you're just not tracking it." An organization should assess its social accountability progress in time and/or dollars. ABHOW estimates the dollar value of each hour a volunteer contributes, based on each volunteer's duties, using an online calculator (one such calculator is available at But the organization also focuses on how its presence can enhance a community. "We believe we're a benefit to these towns both in dollars and in time and treasure," Kallander says. "That's a great thing to have, not only for the positive, but for a potential assault on the not-for-profit status."


ABHOW publishes a yearly report consisting of data collected from all 30 communities. The annual report features financial information and graphs, as well as a narrative section documenting the programs each community has that fulfill its social responsibility. That report is presented to residents, board members, and employees. Next year, ABHOW plans to develop a written social accountability policy and post the social accountability report on the organization's Web site. "People can visit, read the report, and get ideas," Kallander says.

Wesley Towers also publishes a yearly statement highlighting its contributions in the Hutchinson News and to the city of Hutchinson. The report includes the organization's mission statement, examples of benefits provided, and a message to the community. It states, "Wesley Towers is proud of its not-for-profit status and its ability to contribute to the growth and viability of the Hutchinson community. Wesley Towers appreciates the opportunity to serve the Hutchinson community."


Vernon advises organizations to be accessible, which he credits for Wesley Towers' positive perception in the community. "I think this openness has helped the public and government agencies understand and appreciate us more--especially our residents and staff," he notes. Kallander suggests organizations bring in key townspeople--social workers, hospital discharge staff, fire department officials, and clergy--and ask them, "What is it that you see that we're missing in our community?" She recommends implementing one or two of the community's suggestions and managing the community's expectations so your organization doesn't disappoint.

Once an organization identifies and implements a social responsibility program, it can track its contributions and share that information both internally and externally. If an organization's 501(c)(3) status were ever challenged, it has evidence of its community contributions. "The main point, though, is that you do this because it's the right thing to do," Kallander says. "If you do it with just the intent of being able to prove something, you missed the core of what social responsibility is all about."

For more information on American Baptist Homes of the West, phone (800) 222-2469 or visit For more information on Wesley Towers, phone (888) 663-9175 or visit To send your comments to the author and editors, e-mail


A collaboration of the American Association of Homes and Services for the Aging and Nursing Homes/Long Term Care Management

Not-for-Profit Report, appearing in every issue of Nursing Homes magazine, addresses issues of particular interest to long-term care's not-for-profit sector. It provides nonprofit aging service providers with an additional information resource. Topics have been identified in collaboration with the American Association of Homes and Services for the Aging. Nursing Homes welcomes comments and suggestions for future coverage.

RELATED ARTICLE: Doing good and doing well

Editor's Note: The following is a letter to AAHSA members on social accountability from Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging

John Picken, board chair of Kendal at Oberlin, and Benjamin Franklin think alike about not-for-profits. Franklin established the Leather Apron Society in 1727 based on the premise that "The good that men do separately is small compared with what they do collectively."

Thus, the birth of the American not-for-profit organization. A century later, Alexis de Tocqueville commented that community action for the public good was honorable and uniquely American.

Fast-forward a century. Peter Drucker discerned three fundamental sectors of American society that make it vibrant: business, government, and not-for-profits. Each sector has a unique responsibility. Government's is to protect and oversee. Business' role is to generate an economy. Not-for-profits' responsibility is to change lives. More recently, Dr. Lester Salamon, director of the Johns Hopkins Center for Civil Society Studies, defines four major duties of the not-for-profit sector:

* Guardians of values

* Service providers to meet emerging and often difficult societal needs

* Advocates for those often without public voice

* Creators of community (or social capital)

Dr. Salamon, in his must-read book for not-for-profit boards, The Resilient Sector, offers facts and figures on the size, scope, and impact of this sector on the American economy and our way of life.

Even more recently, Dr. Claire Gaudiani of Yale University, in another must-read book for boards, The Greater Good, discusses how American generosity is the economic engine that drives capitalism as an essential dynamic of democracy. Dr. Gaudiani says, "The ultimate form of generosity is the investment in people, property, and ideas." She reflects on Maimonides, who wrote centuries earlier about the eight states of Tsedakah, which means "generosity that acknowledges the dignity of the receiver":

The highest level of Tsedakah is to enter into a partnership with the person in need so that he will become productive and eventually independent.

Dr. Gaudiani has a chapter in her book on the fragile balance between democracy, capitalism, and generosity, in which she writes, "Most people think Americans are generous because we are rich. The truth is we are rich because we are generous."

I submit to you that the "fragile balance" that makes America great rests on the broad shoulders of not-for-profit governing bodies: yes, the volunteers who are generous with time, commitment, money, and influence; people who see need and are not afraid to take risks and work hard to meet it.

Most not-for-profit organizations have boards that are bedrock keepers of this fragile balance. AAHSA's largest 100 members have average life spans of three generations, compared with our counterparts in the investor-owned sector, which have only a third of that. I'm not making a value judgment with that comparison, but I mention the difference because the not-for-profit sector is expected to fulfill a unique and enduring role: to change lives, enlarge the hearts of communities, guard values, advocate, and meet changing needs when it isn't profitable to do so.

Therefore, governing bodies need to know their jobs. In these complex times, many of our boards are asking that very question: "What is our responsibility?" Public pressure from Congress and the media, spurred by high-profile scandal, raises another question: "How do not-for-profits stand accountable for the recognition American society affords us through tradition and law?"

Dr. Salamon concludes that the not-for-profit sector is in danger of "losing its soul" because we act too much like businesses. Jim Collins of Good to Great fame also wrote a monograph, Good to Great and the Social Sectors: Why Business Thinking is Not the Answer (another must-read for our boards), in which he details special characteristics of mission-driven versus profit-driven enterprises.

Which brings me back to John Picken, who put the issue to me like this (I'm paraphrasing): Can our not-for-profits and their boards "cite the good they do"? Do they "know the difference between doing good and doing well"?

Our boards must answer Picken's question! But how? There are numerous experts and tools to guide a thoughtful reflection process. Quality First offers an excellent framework for essential board talk. We even published a resource that your organization can use to establish a social accountability program in 60 minutes. Experts like Richard Chait, William Ryan, and Barbara Taylor are also helping members through their book Governance as Leadership and presentations at national and state meetings.

Accreditation through CARF-CCAC is an excellent process that stimulates reflection about effective governance.

The health of American society depends on such dialogue to maintain that essential yet fragile balance of democracy, capitalism, and generosity. A key outcome of that dialogue is John Picken's challenge to know the difference between doing good and doing well. Not-for-profits must do both, or we will not fulfill our unique responsibility.

William L. Minnix, Jr., DMin

AAHSA President and CEO
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Title Annotation:NOT-FOR-PROFIT report
Author:Peltier, Michael
Publication:Nursing Homes
Date:Oct 1, 2007
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