Non-Profit - Rarely the Right Choice for Your Practice | Practice Up! for Advocates and Care Managers

Not a week goes by when a new advocate tells me he or she plans to establish their new advocacy practice as a non-profit organization.

“Why do you think you want to establish your practice as a non-profit?” I ask.

“Because then I won’t have to ask patients for money,” is the nonsensical response.

“Then where will your money come from?” I continue. “How will you sustain your business?”

….crickets….. then…..

“That’s why I called (or wrote to) you!”

Yikes.

Because advocates are among the most caring and empathetic human beings on the face of the planet, many want to be able to help patients out of the goodness of their hearts, and not because it’s a way to make a living.

I get that! I have a kind heart, too! But I am also well aware that unless I have a way to fund my business – providing me with the ability to pay my mortgage and put food on the table – I won’t be able to do it for long.

Most of the time this non-profit reasoning comes because the new advocate doesn’t like the idea of asking for money, or knows that so many well-deserving patients can’t afford advocacy services.

But, I’m sorry to tell you, establishing a non-profit organization isn’t the answer.

Here are the facts about all non-profit organizations:

They cannot operate without income.
Their income sources are donations, not payment for services. So they still have to ask for money – through donations. But they usually ask people who aren’t their patient-customers to provide funding.
Not only does a non-profit require a lawyer to establish the non-profit organization, donors require reports that a for-profit business doesn’t need to provide. Donors want to know how their money is being used, plus receipts for their taxes – more paperwork!
Donations can create conflicts-of-interest. Example: Suppose an oncologist wanted to donate $500,000 with a request you always take your clients to him/her for a second opinion? Would you do it? While you’d help dozens of people, that’s a conflict-of-interest because that oncologist might not be the best choice, and because advocacy ethics require the patient-client be the person to make that choice. The kindness of your heart could be sorely tested.

Here’s probably the bottom line to most people reading this TIP: If the problem you have is with asking for money, creating a non-profit isn’t the way to overcome it. It only changes who you ask, and it forces you into more rules, paperwork, and difficult decision-making.

Once you realize that yes, in order to run your business, you’re going to have to ask for money, then begin to focus on how to overcome that fear. Just do it! Here’s some how-to advice.

Then someday, when you’ve run a successful, profitable practice for many years, consider establishing a non-profit foundation that accompanies your for-profit practice, to help those who cannot afford your services.