John Ireland of Southern Cross - Charities are a Business

Southern Cross is an independent not-for-profit organisation with a Catholic heritage. It offers similar quality accommodation free to pensioners / renters as they allocate to those who can afford to pay.

Two years ago the writing was on the wall

John: "Not-for-profit villages faced the prospect of running out of money as prices of land and expectations of quality went up. We came to the conclusion that the more business like you are, the more charitable you can be. We had to generate healthy reserves to survive and deliver. We established that our mandate is to provide 25 percent of our spaces to pensioner / renters. This meant we could charge for the other 75 percent. We also decided that for our residential care accommodation we would work on a first come, first serve basis. That means if someone knocks on our door and they have no money, we have to fit them in to the first available space."

"You can only do this if you are financially sound. We had to start acting like a developer. It has worked out; 15 years ago we had no real cash, now we have very, very healthy reserves. As not-for-profits, we have to walk a fine line in the expensive areas. Our Marsfield (Sydney) development is one example - we bought the land around Curzon Hall for $4 million and built 72 units and 40 care apartments."

"As there was no evidence of an unmet need for pensioner / renter units (given that our 40 care apartments were already available to those in need) we put the units on the market for up to $550,000 each. As a result, we were able to fund new pensioner / renter units in the town of Parkes, out west."

"At Marsfield, our residents get a cheaper home than next door in a private enterprise building plus they get a [different] quality of life, strong support to stay independent and priority access to our aged care facilities. People live longer with us because we assist their independence. We work on a cost recovery system - for instance, in our village, if you are struggling to cook for yourself, for six dollars we can provide a three-course meal. If house-keeping is becoming a struggle, we will charge $16 for cleaning a two-bedroom unit. We will clean and deliver a full set of linen for $6.50."

"We try to think outside the square. At Corowa, near Rutherglen, there was a 30-year-old local community aged care facility with 34 beds. The government gave them another 26 beds, but they needed $3.5 million. We joined up with them, sold the land and went down the road and built 60 beds and we are now building a village of 53 villas. We have sold 18 off the plan so far. Not-for-profits have to be wary, though, of being seduced by the black bottom line. The divide is getting greater between the rich at the expense of the poor."

"Each year, we put $750,000 into our pensioner / renter reserve. But we can only do this if we act like a business."

Other stories in this section:

• Stuart Nicholson, the CEO of Becton's Retirement Business
• Dr June Heinrich, the CEO of Baptist Community Services
• The SCV Group Australia's Toughest Village Job
• John Martin, Managing Director, Babcock & Brown Communities
• Ken Barber and ARV - The Business of Providing Better Care

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