Meeting the Needs of Future Clients and the Importance of a Budget Surplus
A letter from David Teater, Executive Director of Reach for Recovery
I learned many years ago that “not for profit” does not mean “no profit.” In fact, if a nonprofit only breaks even every year, they won’t be in business for long. Budget surpluses must be generated to provide a cushion against unforeseen challenges (such as a global pandemic), to maintain buildings and equipment, and most important, to reinvest in services that support the agency’s mission.
Since our inception, Reach for Recovery (formerly OAR) has accepted all clients, regardless of their ability to pay. That’s the very reason many of us work here! When a client has no income or resources, which is all too common with addiction, we help them get support wherever it is available, usually through Medicaid funding. Medicaid reimbursement rates are not reflective of typical market rates. For example, our current full-fee rate for residential treatment is $200/day. For that we provide housing, food, 24/7 staffing, and 20+ hours per week of clinical services delivered by graduate-level clinicians. Daily rates at “for profit” residential programs are $1,000/day or more. Our current Medicaid reimbursement rate is $167/day and, until recently, the reimbursement rate was $114/day – a rate that was unchanged for more than 10 years. You can see how this reimbursement structure contributes to on-going financial pressures.
The decision to accept all who need our help, along with the corresponding Medicaid rates, results in significant challenges to financially break-even every year, and even more so, to generate a surplus.
Reach for Recovery was fortunate to have a surplus in FY 2020-21, primarily the result of COVID related financial support which were one-time funds. We are grateful for this support, without which, Reach for Recovery would have likely sustained a net loss for the year, or been faced with difficult staffing and program decisions. This surplus will be used to strengthen our financial position and, along with funds raised from our capital improvements campaign, invest in our buildings and programs.
If you or your organization would like to make a donation to our capital improvements campaign, each donation is being matched dollar-for-dollar by a generous, anonymous donor. You can donate securely online or donate by mail. Learn more.
As always, thanks for your ongoing support,