Aging Service Organizations to Face Significant Challenges in Coming Years Due to Increase in U.S. Aging Population

Nonprofit organizations that provide services to older adults have experienced growth and have partially recovered since the Great Recession, but they still continue to face hurdles, such as the minimal support from private contributors, according to Giving USA’s report titled “Giving and the Golden Years: The Role of Philanthropy in Aging Service Organizations.”

While these nonprofit organizations—or aging services organizations (ASOs)—are still facing difficult challenges, the report notes that these challenges are nothing compared to what is in store the coming years. This is due to the fact the aging population (and demand for aging services) is expected to double over the next 35 years. Currently, the bulk of financial support for ASOs comes from government grants. Because there is minimal support from private contributors, authors of the report believe that there is “room for philanthropic growth among nonprofit ASOs. Philanthropic development, particularly in the areas of planning giving and capital/endowment campaigns, could provide one means of addressing future needs” of the aging population.

Here are some statistics on Baby Boomers via the Pew Research Center:

• About 10,000 Baby Boomers will turn 65 years old each day for the next 15 years.
• Every single Baby Boomer will be at least 65 years old by 2029, which will make the 20 percent of the U.S. population over 65 years of age.
• It’s projected that there will be 98.2 million people over the age of 65 by 2060 (double the estimated 47.8 million in 2015).

In 2016, there were $12.6 billion that was contributed to direct-care aging services providers—32 percent of contributions were from individuals, community and private foundations, and corporations. While attaining revenue can be challenging, there is an opportunity to build a culture of philanthropy. A culture of philanthropy within an organization “will align attitudes and behaviors that are not only create lasting bonds, but also increase sustainability,” Jeffrey D. Burne, president and CEO of Jeffrey Byrne + Associates, Inc., said. According to Byrne, the important characteristics of a strong culture of philanthropy are leadership; philanthropy as a priority; appropriately funded development staff and resources; decision-making processes guided by donor perspectives and expertise; and interaction with donors throughout the organization.

In the U.S., there are about 1.1 million public charities, according to the report. Of those charities, 2.8 percent are service providers to the aging population—25,649 total registered charities. Specifically, there are 419 food programs, 3,493 nursing facilities/home health care; 9,824 senior/adult/family centers and human services; and 11,913 centers for senior/retirement/independent/subsidized housing.

What can we learn from this report? I had the opportunity to speak with Laura MacDonald, CFRE, president of the Benefactor Group and co-author of the report, and here’s what she had to say about the report’s take-home message:

“I would hope, at the very least, the study raises an alarm that [ASOs] have a limited time and need to be adapting now. In particular, they need to have a healthy stream of contributed revenue; they need to start developing their relationships with donors now.”

MacDonald advises for these organizations to take this report to a major funder and say: “We're being proactive in preparing for this demographic shift. Would you be interested in investing in our capacity-building grant to help us strengthen our ability to secure contributed revenue?"

Or to go to an individual donor and say: "We want to be sure that we're able to sustain your quality of life, and in order to do that we know that we can't rely solely on the past streams of revenue. Can we talk to you about some enlightened plans to help us sustain a quality of life for people who live in this community?"

So, how will you prepare?