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Senior Living Nonprofits Quietly Collaborate In Under-the-Radar Group

Non-profit senior living providers across the U.S. have in recent years looked to mergers and affiliations as a way to gain scale and thrive in the face of industry headwinds. But some of these arrangements also come with a price: In order to join forces, at least one party needs to give up some degree of autonomy.

It doesn’t always have to be that way, though. One organization, Novare, is shaking up the traditional model of affiliation by letting its members share some of the benefits of scale while keeping control of their identity and finances.

Novare is composed of 17 single-site and small-system life plan community providers, totaling about 7,200 units located in markets that don’t compete with one another. If it were counted on the annual LeadingAge Ziegler 200 list, Novare would be the fifth-largest multi-site senior living nonprofit.

Underscoring that its member organizations prize their autonomy and independent brands, Novare doesn’t publicly disclose its membership or have a publicly accessible website. As a result, a certain amount of industry speculation surrounds Novare.

Mary Leary, who chairs Novare and also serves as the president and CEO of Evanston, Illinois-based Mather, draws a comparison to a speakeasy. Not that Novare is in any way illegal, but it does maintain a certain amount of exclusivity in its membership, and is not an entity that generally publicizes itself. In addition to Mather, Leary did identify some participating organizations, including the Frasier Meadows Retirement Community in Boulder, Colorado; Moorings Park in Naples, Florida; Bishop Gadsden in Charleston, South Carolina; Carolina Meadows in Chapel Hill, North Carolina; and Kahala Nui in Honolulu, Hawaii.

Novare was founded in 2012 to give non-profit life plan community providers another way to share best practices and collaborate with industry peers.

For an upfront fee and a recurring yearly fee after that, member organizations get access to things such as a group purchasing organization, a semi-annual CEO forum, a management training course geared toward career development, peer exchanges, industry benchmarking data and an online knowledge repository.

Novare isn’t meant to replace the traditional affiliation model for senior living nonprofits, but it does serve as an alternative to it, Leary said.

“Novare provides more autonomy than affiliations in that, with affiliations, an organization gives up control,” Leary told Senior Housing News. “With Novare, members retain control over their own boards, their financial statements and their tax returns.”

Novare is growing, with another six to eight providers possibly joining the organization soon.

“We’re just benefitting so much from the collective strength of the group,” Leary said. “I think we’re just raising all the ships in the harbor to a greater extent than we could do alone.”

As headwinds continue to buffet the senior living industry, non-profit providers — especially those with skilled nursing exposure — are at risk of operational upheaval. And all the while, for-profits are circling the waters, looking for fresh acquisition targets.

Since 2010, 568 not-for-profit senior housing communities have changed owners or sponsors — with the for-profit sector gobbling up about half of that total, according to Ziegler investment banking data shared in March.

These conditions make organizations like Novare all the more important, according to Bill Lowe, president and CEO of Chicago Methodist Senior Services (CMSS). Based in Chicago, CMSS has five senior housing properties, and to date has found success in joining forces with industry peers.

“You can gain a lot of value from just getting together,” Lowe told SHN. “If you have a group of really talented CEOs around the table thinking about best practices, leveraging vertical integration opportunities … you’re going to gain.”

While CMSS doesn’t have any life plan communities and therefore isn’t eligible to join Novare, the organization does find value in linking up with industry peers. CMSS’ partnerships have included founding with 11 other non-profit senior living providers a therapy, rehab and pharmacy services company called Symbria; a similar venture that provides IT services called Parasol Alliance; and an accounts receivable cooperative.

Lowe, who has been with CMSS since 1989, has seen many senior living nonprofits assimilate with larger organizations over the years. Sometimes, those arrangements are less about needing new expertise or fresh ideas and more about needing the larger organization’s balance sheet.

“Any time a 100 year old organization goes away … there’s a sadness in that,” Lowe said. “It’s especially poignant when you have a faith-based community that’s been supported by one or more churches.”

The post Senior Living Nonprofits Quietly Collaborate In Under-the-Radar Group appeared first on Senior Housing News.

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