We sat down with Charlie Rahilly, Executive Vice President and Chief Financial Officer of ECS, to discuss the importance of financial stability for senior living communities.

Question: When people start looking at senior communities, what should they consider?

Charlie Rahilly: When someone is moving into a senior’s community, they are typically making a decision for the coming 10 or maybe 20 years of their life. So they want to be moving into a community that has staying power, that is financially stable and secure. They also want that community to be investing in the health and happiness of its residents and reinvesting to keep the buildings well maintained.

Question: What is the biggest difference you see in senior communities?

Charlie Rahilly: There is a big difference in whether the community is nonprofit or for profit. As a nonprofit, ECS continuously reinvests in the communities, while a for-profit extracts profits to its shareholders.

Question: How does the nonprofit nature of ECS impact its structure?

Charlie Rahilly: As a nonprofit, ECS is governed by an independent board of directors from the community — leaders from business, real estate, legal, and healthcare fields.

Question: How does the board of directors measure success?

Charlie Rahilly: The board is really motivated by resident-centered success. They measure success in terms of how much residents’ lives are enriched and enhanced. It’s different from a for-profit entity that has private equity owners or shareholders who are looking to increase the profits of the company.

We have a resident experience survey. We want to understand how residents see the quality of their life being enhanced and enriched by living in one of our communities. And that’s really our measure of success. Whereas in a for-profit community, these scores drive them to raise prices and increase profit margins.

Question: How does the nonprofit nature of the communities impact the residents?

Charlie Rahilly: At ECS, there are no profits that are generated because there are no shareholders, so there are no payouts, there are no dividends. This means all of the cash flow that’s generated first goes back to reinvest in the communities to keep them safe, contemporary and comfortable. Everyone wants to live in new or like-new communities, so we’re continuously investing in the communities themselves, from replacing equipment on a schedule, to refreshing the community so the carpets are replaced, the walls are repainted and the amenities are updated. Then secondly, the cash flow goes to service the bonds or make bond payments that originally built the communities.

Question: How do you define financial stability?

Charlie Rahilly: I personally take the role of fiduciary really seriously. As the CFO of ECS, every day I see the impact of financial stability on the choices we are able to make and the services we are able to provide. At ECS, we are blessed with ample resources. So we consider: how do we generate returns on those resources that are going to keep up with or exceed the inflation rate? In doing so, we preserve the organization’s purchasing power over time on behalf of the residents. And through wise investing, we’re able to generate returns that help offset costs and allow us to reinvest these investment returns in the communities.

Question: What type of investments do you look for?

Charlie Rahilly: We are looking for prudent investments, those that provide a good return, and create value over the long-term. As a nonprofit, we use very low risk, long-term fixed rate bonds to finance the communities and the bonds are tax exempt, so we’re able to service the bonds at a lower cost. In that way, we maintain our 100-year legacy and propel it into the future.

Question: If you were looking at the finances of a senior community, what would you want to see?

Charlie Rahilly: I would look at the credit profile of the community, and their liquidity. Do they have the liquidity in their financial resources to weather something like COVID, or fires, such as the ones we just had in Altadena? These are unanticipated events and financially, you need to be resilient to sustain yourself over the long haul.

So I would look at an independent rating agency, such as Fitch. They are a credit rating agency that provides ongoing surveillance of organizations. They publish these findings, and they talk about the drivers of sustainability in those reports. The third-party nature of these reports holds the organization accountable and provides independent assurance to residents.

Question: What is ECS’s credit rating?

Charlie Rahilly: Recently, on December 17, 2024, Fitch Ratings affirmed ECS’s ‘A-’ rating with a Stable Outlook.

Question: Beyond ECS’s three lifeplan communities (MonteCedro, The Covington and The Canterbury), what are other priorities for ECS?

Charlie Rahilly: ECS as an organization exists to be a community resource. We are working with the Episcopal Diocese of Los Angeles to create more affordable housing on church properties. And we are the general partner of Casa De Los Amigos in Redondo Beach, which is a fully affordable community for 135 seniors who might otherwise be housing insecure without a subsidy.

Question: And a final question, if I were considering a for-profit versus a nonprofit community in Southern California, what should be top of mind?

Charlie Rahilly: I would say that choosing a nonprofit, you’re really investing in living in community. A for-profit is always going to take a substantial slice of the community’s cash flow for themselves. Their retained earnings are removed. That never happens in the nonprofit community model. We continually invest in community, and in the long run, that makes all the difference.

About Us

ECS has been providing exceptional communities and services for seniors in Southern California for more than 100 years. Proudly nonprofit.