Non-Profit Organisation Considers Move to For-Profit Status

In an historic move, Masonic Homes’ CEO Doug Strain is openly contemplating moving the non-profit entity into the for-profit sphere.

 

Mr Strain has been floating this idea for some months now – sharing his plans with The Australian late last year and Australian Ageing Agendas last month. These plans involve the organisation either restructuring as a company limited by shares or floating on the stock market. This move is intended to increase the organisation’s opportunities for capital growth, aid expansion and protect against the decline and unreliability of government funding.

 

Masonic Homes is currently registered as a Public Benevolent Institute and has been in operation since the 1960s. Originating in South Australia and also operating in the Northern Territory, it has more than 1000 sites valued at around $300 million.

 

And Mr Strain has a vision of expanding the organisation even further. He told The Australian that he intends to grow the organisation nation-wide in line with the increased need for retirement places over the coming decades.

 

Joanne O’Brien, partner at Carne Reidy Herd Lawyers, noted that “tax exemptions have always been guarded very closely by charities and not for profits and this is a move away from that traditional position”

 

She calls it “another step in reducing reliance on government [that] comes against the background of the current reviews of the tax exemptions available to charities” and “another indication that the sector is looking to be more commercial in its pursuit of funding opportunities”. The final report on these reviews is expected in the coming months.

 

It remains to be seen whether Masonic Homes will make this transition successfully and the kind of response it will elicit from members and current and future clients. “I think it is a conversation worth having,” says Ms O’Brien, especially “in the context of ever shrinking government budgets for funding the work of NFPs and charities.”

 

This move has the potential to significantly impact the larger non-profit sector as similar organisations struggle to cope with the changing funding paradigm. Non-profit boards would be wise to keep an eye on Masonic Homes’ progress

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