Seven nonprofits team up to cut costs for disabled people.
By: Olivia Winslow | email@example.com
Thursday, March 9, 2023
Newsday | www.newsday.com | LI Business
Seven nonprofit agencies serving intellectually and developmentally disabled people, aiming to rein in administrative costs, have joined forces under a new umbrella agency.
Walter Stockton, president and CEO of Kinexion, stops to chat with Theresa D., of East Moriches, center, and Howard S. of Aquebogue, participants in the day habilitation program at IGHL in Manorville. Credit: Newsday
What began as a slow process of sharing resources more than two decades ago has gained members in recent years, developing into a new nonprofit umbrella agency called Kinexion, which became an official tax-exempt 501(c)(3) entity on New Year’s Day. Kinexion – what is known as a management service organization (MSO) – has $250 million in total revenue and 3,200 staff members in various agencies who provide services to about 5,000 children and adults across Long Island with intellectual and developmental disabilities, according to officials.
Experts say MSOs such as Kinexion, enable social services nonprofits that are often overwhelmed with cash flow issues and administrative red tape to turn over those responsibilities to a larger network with deeper pockets while they focus on their core focus – their programs.
Each agency contributes a portion of their finances to the MSO, so there is “one finance office for all the organizations,” said Walter Stockton, president and chief executive of Kinexion. “All of the billing, all of the payroll go through one finance department.”
That way, “the MSO can concentrate on just those services, while the agency can concentrate on providing program services. It allows for efficiencies we would not have had,” said Lisa Meyer-Fertal, executive director of both East End Disability Associates in Riverhead and Independent Group Home Living (IGHL) in Manorville, two agencies affiliated with Kinexion.
She took over the leadership of IGHL from Stockton last year when he moved to Kinexion.
The other agencies that joined the network include the Center for Developmental Disabilities in Woodbury; Maryhaven in Port Jefferson Station; the Association for Technology Dependent Children based in Hauppauge, better known as Angela’s House; the Head Injury Association in Hauppauge; and the New Interdisciplinary School in Yaphank.
These nonprofits came to Kinexion one by one over the years in an effort to save money and gain the expertise of a larger network that would consolidate their financial departments while letting them retain their individual identities as service providers.
The origin of Kinexion dates to 1999 when other struggling agencies having financial problems sought to share operations with IGHL, said Stockton, who was then executive director of IGHL.
Bob Policastro, founder and executive director of Angela’s House, said being affiliated with IGHL in 2002 “allowed us to economically survive because we could share administrative costs and be able to share human resources, the accounting department, the purchasing department.”
Stockton said that no jobs in the agencies were cut. Some employees decided to leave, but everyone was offered other positions in existent vacancies.
Stockton said joint purchasing saves money and in the area of health insurance, for example: “The buying power you have with 4,000 employees instead of 600 employees, you can get better benefits at far less cost.” Health care cost savings for the agencies were about 10%, or a total of $2.7 million, Stockton added.
Management service organizations, said Ken Cerini, managing partner of Cerini & Associates, a Bohemia-based accounting firm, are common in the health care industry.
For networks like Kinexion, Cerini said, “It is innovative, creative to take a page from a bigger model and integrate it into a small nonprofit? Yeah. I think that’s the direction we’re going to see more of.”
Jay Silverstein, executive director of the Center and the New Interdisciplinary School, said, besides the cost savings, an MSO provides access to the knowledge needed to cope with governmental funding rules. “All systems of operation require a high level of expertise when you’re dealing with state funds and regulations…I don’t have a CFO, but there’s a CFO at the central office. I have a school here and adult residents, and they’re all regulated and funded differently.”
Now, being with Kinexion, his agencies can concentrate on developing programs. “We had our own culture, our own way of doing things wasn’t superseded.”