As the caregiver shortage continues to worsen across the nation, an alternative business model for home care workers is gaining ground thanks to a new grant project funded by the AARP Foundation.
Creating a sustainable pathway to expand home care cooperatives is one goal of the $200,000, two-year grant to Capital Impact Partners from the AARP Foundation’s Evidence-based Solutions for Vulnerable Older Adults.
The project is a national effort to scale existing home care cooperatives, which are worker-owned businesses and alternatives to traditional home care companies. Capital Impact Partners is a nonprofit community development financial institution that has disbursed more than $2 billion to revitalize communities and incubate social programs.
The project aims to support the home care workforce by studying and analyzing how to make cooperatives sustainable and scalable.
“We’ve been working on designing or studying what is the best and most sustainable business model for these home care cooperatives,” Candace Baldwin, director of strategy for aging in the community at Capital Impact Partners, told Home Health Care News. “That’s the premise of why we reached out to AARP Foundation and for the grant. [It’s about] taking these replicable models and asking how we take it from a local community where it’s working really well and expanding that wealth and knowledge and replicating it.”
The task of scaling cooperative business models is not an easy task, according to Balwin, who says the funding came along at just the right time.
The Home Care Cooperative
Cooperatives (co-ops) have been in existence since the mid 1940s, with home care cooperatives cropping up around 1985. Currently, there are fewer than a dozen home care cooperatives across the nation, with the largest being Cooperative Home Care Associates in the Bronx, New York, according to Leslie Mead, executive director at the Cooperative Development Foundation (CDF), which is working alongside Capital Impact Partners on the project.
The worker-owned businesses are typically started with funding from community sources, including nonprofits, grants and local government help. Co-ops offer an alternative for workers, who are able to take ownership stake in the company. For home care workers, who are frequently faced with low-wage conditions, there are several benefits for working in a co-op instead of a traditional home care agency, according to Baldwin.
For one, co-ops tend to provide slightly better benefits. With workers running the business, there may be greater opportunities for career development and higher wages. Additionally, with high demand for home care workers, co-ops may help attract more caregivers to the space to meet the need.
“I see co-ops as an ownership form,” Mead told HHCN. “They are competitors like anybody else in the home care business. They are part of the landscape. I don’t want to frame what we are doing as taking on home care or other agencies, but more just offering workers an alternative.”
Co-ops can also help fill home care needs in rural communities, where home care agencies may not want to take up shop, but community resources can help develop a worker-owned business.
Scalability and Expansion
The AARP-funded project will focus on studying and analyzing existing co-ops’ structure, training and business models. Contributing to a scaleable and sustainable co-op model will help drive more benefits to home care workers and help meet the growing demand for care, Baldwin believes.
“For us, it’s planting the seed and creating a path for replication,” Baldwin said of the project’s goals. “We want to have a replicable model with some fidelity that we can help with and that can be sustainable.”
The research could also help inform the field about home care cooperatives and their alternative choices for workers, she added. At the end of the two-year grant, Baldwin hopes the efforts will encourage expansion of existing co-ops and help solve the caregiver crisis by building up benefits for these workers.
“Right now, co-ops sort of spring up organically around the country,” Mead said. “They are one-off. [This] committed money is a really deep dive into how co-ops can be replicated more efficiently.”
Written by Amy Baxter