Many times a week I get asked, “why did you become a nonprofit?” I usually say, “because we are here to care for people, and it made sense to do that as a nonprofit.” Although, admittedly, the answer is quite broader than that. And, maybe the question is much deeper than that.
What does being a nonprofit business mean? Well, society usually has many different answers to this. Factually, a 501c3 public charity is generally defined by the IRS as an organization which receives a substantial portion of its revenue from the general public or from government and has a mission that provides needed services for the good of the public. One of the most distinct provisions unique to Section 501(c)(3) organizations is the tax deductibility of donations. 26 U.S.C. § 170, provides a deduction, for federal income tax purposes, for some donors who make charitable contributions to most types of 501(c)(3) organizations. Also, many states allow 501(c)(3) organizations to be exempt from sales tax on purchases, as well as exemption from property taxes. Although the IRS and the state of MN declare that a public charity should receive a substantial amount of revenue from public and government funding, the exact percentage amount is not defined. In fact, it is strongly encouraged that nonprofit organizations think of themselves as a business with responsible financial management and establish income streams related to their nonprofit mission (income dollars not related to their mission may be taxable according to state and federal law) such as sliding scale fees. At the end of the day, nonprofit’s have expenses just like any other for profit business. Payroll, rent, administrative costs, heat, air, snow removal are all expenses that are not always worthy of donation or grant support but a reality for any organization that needs to be paid if they want to keep the doors open. It is very important to remember that without funds to cover these real operational costs, your favorite nonprofit would not exist. For more on this, watch this TEd Talks by Dan Pallotta. It is a very compelling talk that will change your donor mindset forever.
As for Exercisabilities and the decision to become a nonprofit, making money for profit in the medical industry comes with many financial and ethical considerations. First, it is true that we seek reimbursement for all of our services. First and foremost, we must keep the doors open and operationally must collect an income. This reimbursement comes from many different sources including medical insurance, private payments (especially considering deductibles and co-insurances), or the county and state of MN waiver program. It took nearly $1,000,000 in 2016 just to keep the lights on and the staff paid well enough to be competitive in the work force. For those of you who know, we did amazing work in 2016. It would have been impossible to raise $1,000,000 without seeking reimbursement. However, what does our reimbursement look like? We run about 60%-70% Medicare/Medicaid casemix. For those of you in the medical industry, this is very high. Our Medicare reimbursement is at cost meaning that we get paid exactly what it costs us. MN medicaid pays us $10 below our cost of providing care. This means that we hare often receiving just at or below our cost to deliver care. This = no profit. But, it is enough to keep our doors open and do what we do well every day. But, does it allow us enough to do any charity work. No.
So why do we need donations to support our mission? There is a gap. There is a huge gap. There are people like R.J. She has chronic pain. It is debilitating and severe. She has worked to improve it for years. She is working hard to stay off narcotics and to live a socially fulfilling life, as well as earn a living at a job. She has tried everything. But what she has found works best is a great combination of gentle exercise, meditation and relaxation activities, and regular PT visits to work on many aspects of her pain both physically and cognitively. Jared has helped her considerably to overcome her pain and return to work. One day, her insurance said that they would no longer pay for her PT or provide any reimbursement for exercise classes – what has worked. Without PT and access to affordable exercise instruction or equipment, she regressed. She could no longer go to work, and no longer make a livable wage. This is the gap that we see time and time again. How can we help one person at a time return to a life without pain, with better mobility, with the ability to walk again. The stories could go on for days. BW had a stroke in his cervical (neck) spinal cord at age of 58. He was preparing to retire from a life of laboring hard at work, successful at both work and family. He was single and his kids are all grown and moved away. He was left as a 6 foot 8 inch tall quadriplegic. He had some ability to move his legs, but not enough to stand or walk given his tall frame. His arms were left unusable. He had to move to a care home, get a power wheelchair that he could propel with his chin, and just sit there. He became stiff and pain filled his body as the staff were unable to provide enough physical or social outlets for him to move. He no longer qualified for Physical Therapy or Occupational Therapy as he was now on Medicaid and all his savings depleted to zero. There were no reimbursement for him, he was stuck. One day, he found EA! We worked to get BW out of his house and into an environment that he could move and exercise. His pain went away and he could work on activities out of his wheelchair that made him move. He loved it! He got stronger and was better able to tolerate sitting all day. He wanted to come to EA everyday. We have been able to shift him to the Forever strong program now and he atleast comes 2 days a week. With our fundraising efforts, we hope to get him to us more. We got him out of the gap and feeling a part of his community again. He is healthier and happier.
What do we need to keep filling the gap? Our Forever Strong Program is the answer. Once our participants are done with what their insurance or therapists say is the end of their skilled, reimbursed PT/OT, they need another step. A next phase where they keep coming and getting stronger, more socially interactive, and can learn to maintain their high physical level that was gained in PT or OT. If they stop, they will certainly lose everything that they gained. If they continue, our results show that they are healthier, happier, and better able to participate in their community without falls and hospitalizations. This can save our local medical system millions of dollars in health care costs. The Forever Strong Program can potentially partially funded by the county waiver program through the state of Minnesota. In 2016, we became a 245D licensed facility so that we could help our participants access these funds. Thanks to this, we have started serving 31 individuals through this partially funded program, and the rest of our cost has been supported through our generous donors and grants. In 2017 Q1-Q3, we served 31 individuals multiple times per week. However, we were only able to provide a portion of their recommended frequency due to needing to manage inadequate donation amounts to fully support the program. The great news is that we provided 32 hours per week and provided $260/week of donated funding which equaled $14,000! This is a great start for our first year! Unfortunately, we currently have a huge list and are not fully providing the amounts that are recommended by the physician and therapist due to not reaching our fundraising goals yet. Our goal is to provide for 100 clients in our forever strong program who fall into this gap of no reimbursement and poverty level financial status. This will require nearly $300,000 per year in fundraising efforts in order to meet our goal. How can you help? Become a friend, attend our fundraiser, share the word about the great work that we are doing.
Attend our November Fundraiser or donate today! We look forward to seeing you on November 10, 2017 at Somerby Golf Course at 6PM for Rock for Recovery. Also, look for our online silent auction and participate even if you cannot attend the gala!