By Roxanne Peek
What does it mean to be a non-profit EMS organization? Often, people hear the term “non-profit,” and have false assumptions about what that actually means regarding how an organization operates.
There are several key things that a non-profit is required to do:
- Serve the public for purposes such as science, religion, charitable, literary, research, public safety testing, etc. Examples of non-profit organizations that operate around such settings include universities, churches, national charities and healthcare providers (e.g., hospitals, EMS organizations, etc.)
- Share their financial and operating information with the public
- Meet the relevant state agency compliance requirements to maintain their tax-exempt status
Although non-profit organizations have tax-exempt status, they are allowed to make a profit, and often build reserve funds for sustainability. Unlike a for-profit organization, a non-profit organization cannot distribute its profits to any private individual, however, they can pay reasonable compensation to those providing services.
As we begin to look at the challenges and strategies for leading a non-profit EMS organization, there are several myths about non-profits that exist that are important to mention:
- A well-run non-profit should have low overhead
- Non-profits get most of their funding from foundations
- Non-profits do not have paid staff; they only use volunteers
- Non-profits cannot lobby
These myths will be explained further as the following challenges and strategies are explored in more detail.
Myth: A well-run non-profit should have low overhead. Truth: Non-profit EMS organizations can vary in size and the services they provide, but they all must meet the key requirements for a non-profit, and they all face similar challenges. One of the most significant challenges, just like their for-profit counterparts, is financial sustainability. EMS organizations require funding for overhead expenses, such as equipment, training, operations and salaries in order to provide services to their communities. The myth that a well-run non-profit should have low overhead, is just that, a myth. Expense categories in a non-profit EMS organization are very similar to a for-profit EMS organization, such as rent, supplies, equipment, salaries, utilities, etc., and these expenses historically increase annually.
EMS organizations have not seen reimbursements for the services they provide keep pace with the annual increase in expenses, especially in the state and federal payers fee schedules. In addition to low reimbursement, EMS organizations are also seeing less government subsidies and fewer donations, resulting in tighter budgets. All these factors combined make it more difficult to achieve a positive bottom line, and to ultimately meet the more complex demands for services that continue to evolve in the prehospital care setting.
Myth: Non-profits get most of their funding from foundations. Truth: Despite the myth that non-profits get most of their funding from foundations, 49% of most non-profit’s revenues actually come from private fees for services provided. Government grants/contracts make up 31.8% of revenues earned, and donations from individuals, foundations and corporations make up only 14% of revenues. The remaining 5.2% are from other sources. With reimbursement that does not cover expenses making up 49% of an EMS organization’s revenue, it has become imperative that EMS leadership look at alternative funding sources.
Some additional funding strategies that should be considered are:
- Maximizing reimbursement from insurance providers, through network agreements
- Applying for grants, which requires leadership that can collaborate, and a program that has capacity and the ability to measure results
- Seeking charitable contributions
- Developing a membership/subscription program
- Crowd sourcing for raising funds for a specific need, such as equipment, vehicles, etc.
All of these strategies are viable options to consider, but will vary for each organization, depending on the communities the services are being provided to.
In the wake of COVID, non-profits have had to change the way they seek charitable contributions and engage the community in fund raising events. The historical in-person events have not been possible, so many turned to social media and virtual events. If organizations learned anything during this time, it is that virtual events are here to stay, so non-profits need to adapt and ensure they are transforming their organizations to actively participate in the digital world. Embracing technology and virtual events also allows for a targeted marketing approach to the tech-savvy Gen Z and Millennial generations that have grown up in a digital world and rely heavily on these platforms to engage with others. Younger generations are the next group of potential donors, and it will be imperative to engage them in a way that is meaningful to this cohort.
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Non-profit EMS organizations are facing the challenge of effectiveness and/or demonstrating value. EMS organizations must be able to measure and promote effectiveness by establishing goals, conveying to the community what has been accomplished and ultimately how they add value to the larger healthcare system. This a shift in perception from being viewed as a transport organization to becoming understood as integral part of an integrated healthcare delivery system. EMS organizations have been finding more ways to demonstrate value through strategies involving implementing innovative programs such as:
- Community paramedicine
- Mobile integrated healthcare; and more recently
- Treat-in-place/hospital-at-home care models that some larger health systems are trialing
Non-profit EMS organizations need to make it a priority to be actively engaged in their communities. This not only supports the non-profit commitment of supporting the public, but it also helps develop brand recognition among customers and supporters, to demonstrate value. Often, non-profit EMS organizations also demonstrate value and/or effectiveness through other types of services provided to the communities, such as clinical education for local/rural EMS organizations, first responders, and hospital staff; or community education such as AED, CPR, stop the bleed and safety training. In addition, EMS organizations also serve the public by participating in community health events, vaccination clinics, etc.
Brand recognition is not only important in demonstrating value, but it plays a significant role in the challenge of developing strategies on how to differentiate the non-profit organization from the competition and utilize brand recognition to connect with communities. This is critical when seeking any type of charitable contribution or conducting fundraising events. The focus has shifted over the years from not just acquiring new donors but to retaining current donors, engaging the community and promoting general brand awareness. EMS Leaders of non-profit organizations need to ensure they develop strong relationships in the community and are able to demonstrate and communicate their organization’s “why.”
As the author, Simon Sinek, summarizes in his book, “Start With Why,” most organizations know what they do, and how they do it, but to differentiate yourself, an organization needs to know its why. Simon says, “There are very few leaders, products or companies that create movements. Very few leaders that motivate their followers and employees to stick with them through thick and thin. Starting with the why gives your customers and supporters a way to identify with you on a personal level. To build trust, you need authenticity.” He further explains this means that your how (actions) and what (results) have to be consistent with your why (beliefs). Companies with a clear sense of why tend to be able to ignore their competitors, because what the competitor does is often not in alignment with their organization. Organizations that are not clear on their why tend to obsess with what the competitors are doing, and they try to blindly copy or follow them, only to fail.
Demonstrating effectiveness and/or value and knowing your organization’s why are both necessary in order to tackle the challenge of sustainable growth. Non-profit EMS organizations need to continue to grow, make positive impacts on the community, and effect change in order to survive in the long term. If an organization is not clear on their why, and have not demonstrated value to their customers, sustainable growth will be hard to achieve. Oftentimes, sustainable growth requires such a focused strategy on efficient operations, organizations miss the most critical piece for sustainable growth, which is their employees.
Myth: Non-profits do not have paid staff; they only use volunteers. Truth: Despite the myth that non-profits do not have paid staff, and only use volunteers, a large majority of non-profit EMS organizations do have employees. An organization needs to have a recruitment and retention strategy if they want long-term sustainable growth. Recruiting employees that believe in the organization’s why results in longer retention, therefore reducing turnover. This keeps the expenses associated with onboarding new employees lower and allows for consistency within the organization. It is proven that employees who believe in the why are highly motivated, loyal, and will contribute greatly to the growth for years to come.
Myth: Non-profits cannot lobby. Truth: Lobbying by a non-profit is actually permitted, however, what they are not able to do is attempt to influence legislation and spend a substantial amount of funds and time on lobbying activities. Non-profits can be involved in issues of public policy and approach their advocacy efforts as educational. Every non-profit can and should make its voice heard on issues that are important to its mission and to the communities they serve. This is key factor in achieving sustainable growth, and overall success.
Leading a non-profit EMS organization certainly has some challenges, but with the right strategies, it can be very fulfilling to engage with the communities served in meaningful ways, and to serve the public by providing such vital services.
About the author
Roxanne Peek, MBA, is a partner at Fitch & Associates. She serves as the CEO for LifeFlight Eagle Air Medical Program in Kansas City, Missouri, and as the executive director for the Association of Critical Care Transport in Platte City, Missouri. She has an extensive background in healthcare and EMS leadership with more than 26 years of experience in progressively responsible clinical and leadership roles. She can be reached at [email protected].