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Governance of CCRC/LifePlan Communities

Are "Advisory Councils" Required?
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The only IRS requirements are in Revenue Ruling 72-124 which provides: "Thus, an organization, otherwise qualified for charitable status under section 501(c)(3) of the Code, which devotes its resources to the operation of a home for the aged will qualify
for charitable status for purposes of Federal tax law if it operates in a manner designed to satisfy the three primary needs of aged persons. These are the need for housing, the need for health care, and the need for financial security."

At one time, NaCCRA considered working with the IRS to add a need for respect and a need for empowerment to the three needs recognized by the IRS in the 1972 ruling. We also considered refining the sections of the ruling on financial security so that residents could have financial security in reality.

I believe that those efforts are dormant for now due to lack of the resources that would be needed to pay for legal counsel to pursue such modifications to the IRS requirements that give charitable status to luxury housing for the elderly.
 
Edward,
I have never heard of the IRS requiring that a resident council be appointed by a governing board. Every Council that I am aware of is elected by the residents.

I suggest you read "Requirements - 501(c)(3) Organizations"
https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-section-501c3-organizations

Jim Haynes
 
I am a Resident at a 501 3c non-profit CCRC in New Mexico. We are administered by a corporation. The corporation has a Board of Directors and my community has a Resident Council. Now the corporation is telling us that IRS Regulation requires that an "Advisory Council" made up of NON-RESIDENTS must be appointed to govern between the Resident Council and the Board of Directors. Can anyone tell me if it is true that such an "Advisory Council" must be appointed? I see it as an unnecessary extra layer of governance and a way for the Board of Directors to avoid accountability.

Does anyone live in a 501 3c non-profit CCRC that does not have an "Advisory Council"?
 
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