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A not-for-profit reincarnated

March 1, 2010
by Kevin R. McMahon
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Blending for-profits and not-for-profits to create a new organizational model

In Akron, Ohio, the locals refer to her as the “grand old lady” of Merriman Road. Born in 1917, she is stately and statuesque, bordering on the sublime. Showing some of the inevitable signs of aging attributable to anything that has been on this planet for 90-plus years, she is, nonetheless, a testament to a proper upbringing.

A brief history

This particular grande dame is not a woman but, in fact, a gracious mansion situated in an historic neighborhood along a winding tree-lined road. Her life began as a private residence and, in 1951, she became a home for elderly well-to-do Akronites born to rubber company wealth and prosperity.

A not-for-profit philanthropic organization, Sumner Home for the Aged, operated this mansion as a care facility, naming it Sumner on Merriman. Several large additions eventually incorporated assisted living and nursing care services for 120 older adults through the generosity of wealthy benefactors.

As with most not-for-profits, Sumner on Merriman took very good care of a fixed and static population of older adults. Those who resided there received some of the most lavish care and services a nursing home resident could ever imagine or expect.

But, in the waning months of 2003, Sumner on Merriman ceased to exist. On November 30, 2003, its owners built a new CCRC, named Sumner on Ridgewood, six miles away, taking a large percentage of 209 Merriman's staff and residents with it. With that move, the philanthropic foundation transferred their considerable assets to their new location.

The Merriman is born

Arriving as administrator at 209 Merriman, renamed The Merriman, three months after the transition, I quickly realized that the philanthropic spirit of this magical place remained intact. During the following months, The Merriman attempted to reconstitute itself as a viably operating for-profit long-term care facility in the old shell of the former not-for-profit Sumner on Merriman.

On August 15, 2004, everything came to a head when the facility's management team, employees, residents, and families were introduced to Brian Colleran, president and owner of Provider Services, the new operating entity of The Merriman. The company runs the management functions of the nursing home and the property itself is owned by a healthcare REIT (real estate investment trust) arm of HCR ManorCare. Colleran immediately recognized that the Merriman and its environs were far from the typical nursing home operation. Provider Services' philosophy of allowing its facilities to retain their character and uniqueness was welcomed by all who cherish this special place.

A new organizational model

In the early days of Provider's arrival at The Merriman, Colleran visited the facility to attend a family/resident meeting. At that time, I had the opportunity to spend some time with Colleran discussing the historical background of 209 Merriman Road.

We also talked about an idea that I had written about for a publication back in 1986. Having worked in both the for-profit and nonprofit sectors, my premise was that the sheer weight of demographic forces combined with the shrinking federal and state dollars necessary to provide for nursing home care would result in an inefficient and undesirable two-tiered healthcare system for residents. I posited that part of the solution to this looming crisis might be to create a new hybrid organizational model-one that combines the best of the for-profit and not-for-profit models of delivering care.

Also having worked in both the for-profit and nonprofit sectors, Colleran knew the respective strengths and weaknesses of both and he immediately recognized the potential of such an approach. It rang especially true as he learned about the deep and far-reaching philanthropic roots of the Sumner on Merriman organization. Over the coming months and years, we discussed the feasibility of establishing a 501(c)3 charitable foundation at The Merriman. With the help of attorneys working on a pro bono basis, our foundation, called The Merriman Good Life Foundation, received its 501(c)3 designation in November 2007.

Good Life for great people

In its infancy as The Merriman, the tradition of giving connected with this special building continued. Families would regularly write checks to enable us to do the extras for residents that are a part of this facility's unique culture, such as special activity items, resident outings, and generally doing anything that adds richness and fulfillment to our residents' lives. Or moved by the death of a special friend or family member, individuals honored the deceased through this type of giving.

Early on, it was decided to make the foundation's goals narrow, modest, and focused. It would seek to provide a tax-exempt giving opportunity for those who wish to support our provisions of the “extras” to our residents.

By establishing this tax-exempt giving opportunity, we believed that donations would increase over time. In addition, we felt that having a not-for-profit foundation with no connection to the for-profit operating entity would assure donors that their dollars would be spent directly for the residents and in no way personally benefit the owners and operators of The Merriman.

The Merriman Good Life Foundation is seeking foundation support to assist with the legal and consulting costs associated with establishing this hybrid model. Application has been made to the Draper Richards and Kauffman Foundations for assistance. We are targeting these and other similar foundations that seek to support social entrepreneurial ventures such as The Merriman Good Life Foundation.