Non-Profit vs. For Profit Assisted Living for Persons with Dementia / Alzheimer’s Disease

Last Updated: August 16, 2019


 We need to know we’re making the right assisted living decision. Dad requires round-the-clock care from professionals trained to handle the symptoms of Alzheimer’s disease. But most of our options are for-profit businesses, and don’t they have a bad reputation? If their top priority is making money, how can we know dad’s getting the care that he needs?


The Bottom Line

Numerous studies have shown that nonprofit assisted-living residences provide better care than for-profit residences. This includes nursing homes and memory-care communities. (Studies here and here). Study after study, over decades, has demonstrated that when a private equity firm or corporation takes over elder care, the quality of care declines. Private, for-profit enterprises are motivated first and foremost by making money, and lowering staff levels and scaling back resources is a means of cutting costs to maximize profits. For-profits tend to have lower staffing levels and more reports of bad indicators like hospitalizations, residents being restrained or given antipsychotic drugs to calm them, and bedsores.

This can be disheartening news if your loved one needs a home that offers round-the-clock care, because most nursing homes are for-profit. Indeed, about 80 percent of assisted-living communities are for-profit, and about half of all those are part of a larger corporate chain.

But the most important truth of finding a quality assisted-living or memory-care community for your loved one is that each is unique, and due diligence is required. While it’s true that in general studies show nonprofits are better than for-profit, there are bad nonprofits and good for-profits, and knowing the difference is a matter of taking time and making the effort to find the best situation. (See below for important questions to ask.)


 Did You Know? Free assistance is available to help families find both non-profit and for-profit assisted living / memory care residences that meet an individual’s specific needs. Get help here


What’s the Difference Between Non-Profit and For-Profit Assisted Living?

While the average monthly cost to the resident does not differ for non-profit vs. for-profit homes, there are other significant differences. “For-profit” means the assisted-living facility, nursing home, or memory-care community is beholden to shareholders, an owner, or a corporation. More simply: for-profit enterprises must make money. The average cost of assisted living, in both for-profits and nonprofits, is $4,000 per month (though memory care costs more). When you pay this money to a for-profit community, some amount of that is profit that gets kicked up the ladder.

Non-profits, on the other hand, are not motivated to make as much money as possible. The money paid goes back into the facility itself, because while all communities tasked with caring for elders must follow state regulations, nonprofits operate under further guidelines specifically mandating that no profits go to individuals at the top. The money you pay goes back into the organization. Nonprofits must submit paperwork to the IRS including annual revenue, business structure, and a detailed explanation of how they serve the public good.

Nonprofits are often operated under a mission statement, which you should absolutely ask to see if you’re scouting a potential home for your loved one. These tend to be ethnic- or religious-based organizations, though that does not mean they exclusively cater to people who are members of their particular ethnicity or church. It may mean, however, that activities are structured around their affiliation. A religious nonprofit assisted-living residence, for instance, may hold regular prayer groups or bible studies.

If you choose a nonprofit, be sure your loved one’s beliefs and preferences align with the mission of the residence.


Why the Difference in Care?

The goal for a for-profit assisted-living community, ultimately, is to fill as many beds as possible. That profit motive means seeking out as many customers as possible. This doesn’t guarantee care will suffer, because the corporation may be operating with a much larger budget, but it’s simply a fact that more residents necessitates less attention from staff.

Nonprofits, on the other hand, do not necessarily want as many residents as possible; they want the right number for their operation to run well. Another upside of choosing a nonprofit is that families know that they are benefiting from financial stability. You can believe your eyes: If the community has enough bodies in beds, it should be running smoothly, with adequate care for every resident.


  Assisted-living care is expensive, averaging about $4,000 per month. But there are several options to help cover costs, including Medicare, Medicaid, and state programs. Click here for more information. 


How To Choose a Memory Care Community?

You must do your own homework. Become a detective. The best sources for information are the staff members themselves. Specific questions to ask are: “How long have you been working here?” (High turnover is a bad sign.) “How many residents do you work with?” (A good ratio is between six and eight residents per every one staff member, though they can probably handle 10 to 12 patients at nighttime.) Also: “What’s the average response time if a resident needs assistance?” (Ten minutes is standard.)

Spend time at any residence you’re considering, and visit at different points throughout the day. Join activities, to see how they’re being exercised mentally and physically. Eat a meal there.

And if you choose a for-profit community, ask its office about the corporate structure. Don’t let them dodge this question! What you’re looking for is whether the owner has a financial stake in other companies that provide “goods and services” to the residence. If so, that’s a red flag that might indicate scamming. Nursing home operators have been caught overpaying their other companies while care of residents declined.

Assisted living placement services can help. Or they can simply steer families to assisted living residences with whom they have a referral partnership. There are good and bad placement services and often it comes down to the specific employee providing assistance. Don’t hesitate to use an assisted living placement services (as they are free) and don’t hesitate to leave one behind and find a new one if the first one is not providing adequate assistance.