ROI is king. RIP Not For Profits

Philosophical question: is doing good in our community now dead, replaced with EBITDA financial performance?

For decades Not For Profit church and charity plus community groups have built aged care beds in small metro and regional communities. Not anymore. They have gone on strike, saying the return on investment doesn’t stack up. Sorry.

Land cost, build cost, money cost, staff cost and availability, increasing regulation, and compliance have all killed the sector. If return on investment doesn’t deliver a commercial figure (StewartBrown says 9%), the Not For Profits are now not prepared to have a crack.

This is understandable against a backdrop of five plus years of losses and little surplus actual cash to reinvest in existing homes, let alone new ones.

Successive Governments and bureaucracies have finally broken the community spirit that held sausage sizzles to raise funds for a needed residential aged care service.

What does it say when a Not For Profit says we do not want to play until we make more money? Is it still a Not For Profit?

Of course it is, but it needs hard heads to make unemotional decisions to allow it to be able to continue to deliver care with its current services.

No mission without margin is a foundational business fact and smart. No mission and no growth is a death warning and possible RIP for the Not For Profit sector in residential aged care.

Look no further than New Zealand for a case study. Discuss.