If you’re researching continuing care retirement communities (CCRCs), also called life plan communities, you’ve likely noticed both for-profit (FP) and not-for-profit (NFP) options. Most life plan communities operate as not-for-profit organizations, but for-profit providers are expanding their presence.
Seniors are often drawn to CCRCs because they offer long-term security—residents can expect care if they later require medical or personal assistance. That said, some people worry that for-profit CCRCs might prioritize returns to investors over resident welfare and could evict residents who run out of funds. While this concern is understandable, the reality is more nuanced.
Both for-profit and not-for-profit CCRCs typically include contract provisions that allow the community to terminate residency in specific circumstances. However, many CCRCs—regardless of tax status—aim to provide continued housing and care even when a resident faces financial hardship. It’s important not to dismiss all for-profit communities outright. Residency agreements vary: some for-profit contracts closely mirror not-for-profit terms, while others explicitly state that a resident may be given notice to vacate if they exhaust their finances.
In practice, the risk that a resident will require financial assistance from the community is reduced by several common safeguards. Most CCRCs perform a financial qualification for prospective residents to help confirm they have sufficient resources. Many communities offer refundable entry fees, which are typically applied to care costs before any community-funded assistance becomes available. Additionally, residents who qualify for Medicaid may be able to access government assistance to cover healthcare expenses once their personal resources are depleted, provided the community accepts Medicaid.
What is the real difference between the two?
Understanding how a CCRC is organized and managed is crucial. Regardless of whether a community is for-profit or not-for-profit, you should research its financial stability—available financial assistance depends on the organization’s capacity to provide funds. Below are practical differences to consider.
Not-for-profit CCRCs: earnings stay within the organization
- Not-for-profit CCRCs typically operate under section 501(c)(3) of the Internal Revenue Code and are expected to serve exempt purposes. Their earnings are meant to remain within the organization rather than benefiting private shareholders or individuals, which appeals to residents who prefer mission-driven operations.
- Many not-for-profit CCRCs are affiliated with religious, faith-based, or fraternal organizations, creating a mission-oriented culture that attracts certain seniors.
- Not-for-profit communities are often exempt from state property taxes. Some suggest this tax advantage lowers costs for residents, though proving a direct pass-through of savings can be difficult. If a community were to lose its tax-exempt status, the financial impact could be significant.
- Because these organizations are typically governed by a board of directors, it’s important that board and management members have appropriate experience in housing and healthcare operations. Boards steeped only in another sector—such as a church—may struggle if a community expands or transforms into a full CCRC model.
For-profit CCRCs: accountable to investors and shareholders
- For-profit CCRCs answer to investors or shareholders who expect a financial return. These communities are managed with financial performance in mind alongside operational goals.
- That focus does not mean for-profit communities do not reinvest in their properties. To remain competitive and retain residents, for-profit CCRCs must maintain quality amenities and services.
Which is right for you?
There’s no definitive evidence that one ownership model consistently outperforms the other in financial viability, pricing, or services. Past studies have found similar operating costs per resident across for-profit and not-for-profit CCRCs, and market-rate communities tend to offer comparable pricing regardless of tax status. Research on standalone nursing homes has sometimes shown differences in quality between for-profit and not-for-profit providers, but those findings don’t necessarily apply to nursing units that operate within a CCRC.
Because averages don’t predict every community’s performance, focus your evaluation on specific factors that will affect your or your loved one’s experience: the range and quality of services and amenities, professionalism and training of staff, the community culture and lifestyle, proximity to family and familiar places, the organization’s financial health, and healthcare quality. Reviewing contracts, financial statements, and the community’s policies for handling residents who exhaust their resources will give you a clearer picture of what to expect. Ultimately, the best choice depends on the individual community and how well it aligns with your priorities and needs.