One of the oldest, most well-regarded retirement centers in North Carolina stumbled in the last year or two resulting in financial covenant violations, a failed growth plan, resident concerns, independent audit findings, and a state-mandated plan of correction. As you can imagine, its residents were alarmed at even the thought of their home, their retirement community, not being financially viable.
The State of North Carolina has a robust regulatory system to protect and correct just this type of issue, and the organization itself is a good organization that will get its house in order. I hate that any organization has to go through this and look forward to hearing better news.
This is a cautionary tale for all of us nonprofit senior service communities. Learning from the mistakes of others is preferable to making those mistakes ourselves.
Since 1960, Lutheran Services Carolinas has tried to create a system based on its Mission, Vision, and Values that focuses on quality, financial strength, strategic growth, and communications. We have grown steadily, but carefully over the years, understanding that we have to be fiscally conservative to weather the down cycles when they invariably come. LSC’s budget of over $224 million for the coming year again has a bottom line in the black. It was the Catholic nuns, trailblazers in social ministry in the United States, who coined the phrase, “No margin, no mission.” LSC has always tried to live by that sound philosophy. It takes both a good business person and a good mission person to be successful; one without the other is a recipe for failure.
Years ago, LSC determined that it needed to get bigger in order to survive and thrive. We needed to gain enough scale to be successful and weather the storms that we knew would come. Part of the troubled retirement center’s issue was being a single site. Many single site retirement centers struggled with census and with meeting bond covenants during economic downturns.
For years now, LSC has used an obligated group model for financial strength. Members of an obligated group are like the Three Musketeers: all for one and one for all. Most of LSC’s senior communities are members of the obligated group. Their size, location, diversity, and mutual support make it stronger. LSC’s obligated group is not invincible, but it is broad, strong, diverse, and far surpasses all of the benchmarks and requirements of regulators and its financial institutions.
LSC is a strong, healthy, vibrant, and growing organization with a bright future. Don’t just take our word for it. LSC’s Boards and committees take their governance and fiduciary responsibilities very seriously, and LSC is regulated by a number of state and federal agencies. At all times, the public can view LSC’s audit and IRS Form 990s, read and study LSC’s financing offerings and disclosure statements, etc. LSC is an open book.
As much as all of the above, LSC’s laser-focus on its Vision, Mission, and Values has been its North Star. We talk often that if we keep our focus on what’s most important, we will continue to thrive.
As part of communication and transparency, LSC administrators/executive directors are always available in each of our communities and programs. And if you ever can’t get an answer, I give you my personal email address: tgoins@lscarolinas.net. I don’t have all the answers, but I can ensure you get an answer.
Thank you for being part of the LSC Family. We appreciate your prayers and support as we continue to serve across the Carolinas.
