Senior citizens comprise one of the largest age groups in the United States. According to 2020 U.S. Census Bureau data, there are nearly 56 million seniors in our nation aged 65 and older, and this number is continuing to grow as our population ages. Ensuring the health and quality of life for older adults is paramount, and the responsibility of effectively governing senior living organizations falls to their boards.
Oversight & Strategy
Nonprofit senior living organizations are governed by a board of directors. Board members are essential to the success of nonprofit organizations—their insights and connections are key to compliance and mission accomplishment.
One of the critical roles of a board is setting the strategic direction of the organization. This includes defining the mission, vision, and setting long-term goals that help guide decision making at every level. This strategic process helps the organization remain relevant amid constant changes in funding, regulations, technology, and resident expectations.
Some senior living organizations include residents on their board of directors. When implemented thoughtfully, this firsthand insight into the community’s atmosphere can enrich governance and foster a resident-centered approach. It can help ensure that the lived experience informs decision making. Boards that have proactively adapted to evolving consumer preferences and economic pressures have successfully repositioned their senior living communities by introducing memory care units, expanding wellness programs, and embracing and integrating technology-enabled services to help serve the growing aging population.
Compliance
Board members of nonprofits are legal entities of the organization and are charged with three fiduciary responsibilities.
1. Duty of Care
Board members must act with care to make decisions that lead to the best outcome for the organization. This includes:
- Attending and actively participating in board meetings
- Reviewing materials and asking informed questions
- Monitoring financial health and performance indicators and approving budgets
Example of breach: Missing meetings regularly or failing to review financial reports before approving them.
Senior living boards are constantly monitoring five core capabilities, which Forvis Mazars has outlined in Achieving Health: Our Healthcare Market Point of View: Aligned Growth, Financial Discipline, Regulatory Excellence, Strategic Agility, and Talent Optimization. For more information on this, see our article: Strategies for Senior Living Organizations to Achieve Health in 2025.
2. Duty of Loyalty
Board members must prioritize the interests of the organization above personal or professional interests, to include:
- Avoiding conflicts of interest
- Disclosing any potential conflicts
- Recusing oneself from decisions where personal gain is possible
Example of breach: Voting to hire a company owned by a board member or allowing a person who is related to a paid employee to sit on the board.
3. Duty of Obedience
Board members must make sure the organization complies with:
- All applicable local, state, and federal laws and regulations
- Its own bylaws and policies
- The mission and donor intent
This legal responsibility requires board members to promote transparency and accountability, and to behave ethically in all aspects of the operation.
Example of breach: Using restricted donations for purposes other than what the donor specified or ignoring unethical behavior among staff or board.
There are serious consequences and organizational impacts for violating the duty of obedience that include:
- Revocation of tax-exempt status
- Legal penalties
- Loss of public/donor trust
To carry out these important legal responsibilities, board members should be provided with proper orientation and annual training.
How Forvis Mazars Can Help
Senior living organizations with active, engaged boards that foster a culture of accountability and remain committed to their mission of enriching the lives of older adults consistently achieve outstanding results—including high levels of resident and employee satisfaction. If you have questions, please reach out to a professional at Forvis Mazars.