Guidance on Forming a 501c3 Non-Profit Behavioral Health Entity
Addiction treatment centers are currently one of the most popular assets entrepreneurs can add to their business portfolio. With the explosive arrival of fentanyl, a surge in methamphetamine use, and the sheer number of those caught in the web of addiction, opening an addiction treatment center and staying at maximum capacity is very much achievable with the right components in place.
But what about those who might not have the revenue required to get the ball rolling on a large-scale drug rehab center? After all, high revenue also means high overhead, and the cost of opening a substance abuse treatment center is not inconsiderable.
Luckily, for those who are driven by the cause and not so much by profits, other options exist that could afford you the opportunity to open your own drug rehab business without breaking the bank.
This guide will cover how to start a non profit drug rehab or mental health treatment facility, so if this is your passion and goal, keep reading to get a roadmap to make it happen from our experts at Ads Up Marketing!
What Is a Non-Profit Addiction Treatment Center?
You must be aware of what exactly constitutes a not-for-profit addiction treatment center. Many people confuse a non-profit rehab center with state-funded free and sliding-scale facilities.
Let’s take a closer look at the differences.
State-Funded Substance Abuse Treatment Facilities
Many people hear the words “non-profit” and mistake state-funded substance abuse rehab facilities for non-profit organizations. The two have significant variances, so it’s very important to discern one from the other.
State-funded substance abuse recovery centers are exactly that – funded by the state from top-to-bottom. This means the state pays to open the facility, they pay to keep it in operation, all the way down to the cost of each client’s treatment.
Not every one of those substance abuse rehabs is completely free for everybody, as many offer sliding-scale services as part of the admissions process for those who are in need but may be responsible for a marginal portion of the treatment cost.
The Potential Pitfalls of State-Funded Rehab Facilities
Because state-funded facilities rely on tax dollars and generally have restrictive budgets, unfortunately, this often reflects in their quality of care. With a limit placed on their expenditures, it’s difficult to pay many of the professionals a competitive wage, which in turn, has a significant impact on the morale of the staff.
Ultimately, this can translate to less than satisfactory levels of quality for those who enter for drug and alcohol addiction.
Many non-profit substance abuse treatment facilities, in contrast to many state-funded options, are known for often delivering top-notch care.
Not-for-Profit Addiction Treatment Services
Non-profits in the addiction treatment space don’t automatically mean their services are free to clients. And it doesn’t mean that the services provided don’t generate revenue and even profit, but it does mean that 100% of this money is put back into the operations of the facility and not given to rehab owners or other stakeholders directly.
This means that all of the revenue the recovery center brings in is allocated for things like:
- Larger paygrades to bring in higher quality staff members
- Upgraded equipment or living arrangements for more client comfort
- Larger, more luxurious living quarters for clients
- Education and training on things like evidence-based treatments
- And more
Many would-be clients hear the term “non-profit” and automatically assume that it means a reduction in the quality of care. However, this is not often true.
Most non-profit services that specialize in the client recovery journey provide a higher level of therapy, finer amenities, a better-trained staff, and more comfortable living arrangements, as well as offering extremely robust aftercare and alumni programs in many cases.
So, what about the cost to your potential clients? Let’s dive into the cost of services.
A Non-Profit Rehab Doesn’t Equal Free Care
To reiterate, a non-profit drug addiction recovery center doesn’t mean the organization itself doesn’t generate profit. It just means that every dollar it generates must be funneled back into the organization itself and not distributed to an individual or group of owners.
Clients who attend a non-profit addiction recovery center are still required to pay for treatment or have it be paid for by grants, donations, or other funding sources.
In some cases, non-profit facilities require full payment from those who attend treatment because they are not credentialed with insurance companies. In other cases, even non-profits have negotiated to be in-network with various providers to help them treat more clients at lower overall costs.
Non-Profit Doesn’t Translate to Low Quality
Certain non-profit addiction recovery centers draw celebrity and corporate clients. You could almost compare the quality of treatment to a luxury-style rehab with top-of-the-line counselors and living arrangements.
That said, this doesn’t limit attendance to those who can privately pay for treatment. Services are also provided for those who aren’t able to afford the cost of treatment. Because non-profits also receive grants and donations, many facilities allocate a portion of these funds to create grant programs for the clients themselves, offering the full recovery experience free of cost.
So, how does a non-profit treatment facility come together and operate? What does one do if they’re interested in opening or running a not-for-profit addiction recovery program?
How to Start a Non-Profit Addiction Recovery Program
Starting a treatment facility that falls under the non-profit designation isn’t as difficult as you think. The list below provides a general outline of the most pertinent steps you can take to make your non-profit recovery program a reality.
Preparations Needed for a 501c3 Rehab
As with any other business, the first and most crucial step is in your preparation. Put everything on paper that you have in mind for your recovery center. The better outline you can provide regarding your goals, structure, and benefits for the recovery community, the smoother the process is likely to go.
This also means coming up with an idea of how you are going to start your rehab center, and how much the costs will be. The funds needed to bring things to the point of functionality is important, as most of this money will come from state and federal grants, and possibly donations.
Applying for Non Profit Status
The next step is applying for and obtaining your 501c3 status. This status is what designates your organization as a non-profit entity. You must familiarize yourself with the specifics of operating in this manner, as there are strict rules involved with maintaining your 501c3 status.
However, the benefits that come with this status include tax exemption and access to a plethora of government and state-level grants and programs that will help fund the establishment of your facility.
Inquire and Apply for Grants and Funding Opportunities
After acquiring your status and registering your business, you should have your business model all planned out. The next step is to educate yourself on all of the grants and funding your organization qualifies for, and apply for them.
As stated above, assuming that you maintain the regulatory issues regarding your 501c3 status, you have access to a multitude of government funding programs.
Donations Can Be Tax Deductible for a Non Profit Rehab
Your 501c3 status also makes you eligible to accept donations from individual and corporate entities. Do your research regarding potential companies or individuals to solicit donations.
This could include businesses that already work with organizations like yours, recovery community organizations, or people who have had loved ones or been personally impacted by substance abuse – the list goes on and on.
One of the most important things to keep in mind is reminding these individuals that any donations they make are also tax-exempt because of your non-profit status.
Additional Information On a Non-Profit Recovery Program
When it comes to advertising, marketing, and acquiring clients, the process is no different than your average substance abuse recovery organization.
Likewise, hiring your treatment center staff remains the same. Everyone who works for your rehab will be compensated just like they would at a normal job, and clients pay for services just like other addiction treatment businesses.
However, as we mentioned earlier, you’re afforded several luxuries because of the financial status of your program.
Offering Grants and Scholarships for Clients in Need
Because non-profit recovery programs receive funding from multiple sources, you’re able to allocate a portion of this funding to pay for items that other programs may not be able to.
This includes grants and funding for underprivileged clients. Just like the federal makes grants available to your organization, you in turn can provide similar offerings to would-be clients.
Does This Mean I Work for Free?
Because you operate under 501c3 status, technically there is no “owner,” so it would be against regulations for you to compensate yourself as the owner. However, this doesn’t mean you can’t be compensated for the hard work you put in.
On most occasions, those who rallied behind the facility to make it happen are listed as administrative workers or program directors (which ultimately, is what you are) and receive a paycheck each week/month just like the other employees of the facility.
Many non-profits are operated by those who are in recovery themselves. After a long battle with addiction, many have a burning desire to help others recover from substance abuse.
Do Non Profits Rehabs Need Digital Marketing Support?
Opting to start a non-profit facility can be a great way to earn a living while giving back to the community and helping those in need. But it is often impossible to successfully promote your non-profit among the many well-funded private facilities pouring tens of thousands into their marketing on a monthly basis.
This is where the services of Ads Up Marketing can provide pivotal support. With local SEO marketing and an emphasis on proven SEO campaigns, a non-profit rehab can distinguish itself successfully from other providers without being overburdened by cost.
And should your facility move into paid advertising and require PPC campaigns run with high-level expertise, we can help there as well.
From starting a rehab center, to call center management, consider Ads Up your own personal marketing team, without the expense of in-house staff.
Need Help Spreading the Word? Ads Up Marketing Can Help
Ads Up Marketing has dozens of years of combined experience in the world of substance abuse treatment marketing. You may already know that we specialize in PPC, social media, organic search success, and other facets of public-facing rehab campaigns.
And, aside from helping you spread the word about your facility to clients, we can also help you organize fundraising campaigns to generate funds for your organization.
For more information, reach out to us today to find out how we can help you achieve success in the non-profit sector!
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