You do know what road is paved with good intentions, right?
When we were finishing up last year’s financials in around January of 2023, which we printed as always in Voices, I thought I should document our current financial situation, but then I got busy and didn’t. As I was making my Tour de LSC rounds of the organization, I explained our financials to each group, including our Board of Advisors. Again, I never shared that publicly, and felt it would be helpful.
LSC had the best year we’ve ever had, at least on paper. But just on paper. LSC is now a $176 million organization, and growing. Our nursing homes qualified for Covid funds from the federal government and different parts of the organization qualified for various other Covid and economic programs. We spent millions to test and care for residents, pay higher wages and bonuses to keep staff working, and to pay staff when others were out with Covid. In many cases, the money had to be used for specific purposes, and in some cases we received funds, but it was made clear we were getting the money at that time but would need to make it last.
Covid is not over. It has a long tail that is affecting us now and will affect us well into the future. We are still testing people. We still have teammates test positive and we have to send them home, then we have to replace them with more expensive staff paying overtime, bonuses, etc. We earmarked over $1 million dollars in 2022 to pay bonuses the next year. That’s a lot of money, but not really when you consider LSC’s salaries and benefits alone cost over $91 million a year!
Covid affected us in another very different way. We have over three years of pent-up capital needs that have to come out of any excess funds. All through Covid, we couldn’t even have repair people in our buildings unless it was a major emergency. Much-needed renovations to older buildings had to be put on hold. And our buildings get used and banged up 24/7. We have a backlog of renovations, repairs, and capital improvements to catch up on. That is millions of dollars. Again, for perspective, LSC has over $215 million in real property to maintain.
LSC is a faith-based nonprofit. I love the fact that anything left over does not go into any person’s pocket. Any excess goes right back into the organization to care for people and make us stronger. LSC has been very conservative with our funds; we try to use them wisely to continue this good work. LSC has grown into a large and complicated organization. Many of our assets, including cash, are pledged to specific uses, pledged as collateral for loans, and/or as required cash-on-hand to sustain the organization.
LSC will need to stay that course of financial stability and conservatism as we come out of Covid, continue to address the national workforce emergency, and deal with inflation and other economic conditions. As always, if we stay focused on our Vision, Mission, and Values, we will continue to thrive, not just survive.
