Liz Jones, Policy Director at the National Care Forum discusses how organisations can embark on a journey toward adopting a not-for-profit care model.
As the membership body for not-for-profit care and support we know a thing or two about the benefits these organisations bring to their communities and the wider care sector. Our 170+ members all share common values and aims. Their mission is to provide long term and sustainable care and support services, nurture the the deep roots and history they have in their local areas and keep person-centredness, both in terms of staff and the people they serve, as the focus of the care they deliver. They respond to need and many offer specialist provision for people with specific needs, such as people from different faith traditions, veterans and the LGBTQ+ community.
However, the defining characteristic we’re talking about here is that not-for-profit care ensures that all funding from government or citizens remains in the sector and is reinvested into the workforce and improvement of care rather than ‘leaking’ out of services a term coined by the Centre for Health and the Public Interest’s 2019 report, Plugging the leaks in the UK care home industry: Strategies for resolving the financial crisis in the residential and nursing home sector.
As well as supporting our members, encouraging them to explore and develop new models of care and embrace the potential of technology, we also have an opportunity to shape the wider not-for-profit debate. We have been very vocal in that endeavour, taking every opportunity to extol the virtues of not-for-profit care and highlight great practice and exemplary care taking place in our members’ settings. We also made the growth of not-for-profit care one of our must-haves for social care for the next government.
However, what we haven’t yet done is to set out the process by which care providers can journey towards adopting a not-for-profit care model and this is a piece of work we are currently developing.
So, what is one of main considerations when looking to transition a care business from operating as for-profit to operating as not-for-profit?
Structure – There are a variety of types of not-for-profit business in the UK and each has its own qualities and regulatory requirements. Some of the options are outlined below
- Charitable Incorporated Organisations (CIO)
- Companies Limited by Guarantee (CLG)
- Community Interest Companies (CIC)
- Community Benefit Societies and Cooperative Societies
- Social housing providers
- Local Authority Trading Company
Two main factors that will need to be considered when transitioning to a not-for-profit organisation are legal structure and ownership structure.
Legal structure depends on the organisation’s size, activities and funding sources. It would be essential to establish a strong governance framework such as a Board of Directors or Trustees to oversee operations and there must be development of sustainable funding plans in place. There are also regulatory requirements and tax implications to consider which the guidance we are currently developing will detail together with the pros and cons for each of the potential structures you could consider.
Over and above decisions about structure and ownership, however, is the vital question – is your business committed to the ethos and values that characterise not-for-profit care? Plus, can you confidently take people with you? It will be vital that any change in your organisation is properly explored with those who draw on your care and support, and the workforce that delivers it. As outlined briefly above there are a number of ways to transition your business into not-for-profit provision together with many opportunities to grow relationships in the market. But of course, with any major business change, legal advice and support are required.
We hope this piece serves as an introduction and we plan to publish more formal guidance that will take you through the steps that would need to be considered. I’d welcome contact from any providers who would like to know more about not-for-profit care, membership of NCF and the benefits and support available. Please feel free to drop me an email on liz.jones@nationalcareforum.org.uk to start a conversation regardless of whereabouts in the decision-making process you are.
@NCF_Liz @NCFCareForum
nationalcareforum.org.uk
