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Nonprofit Mortuaries Are Helping Cash-Strapped Families Honor Their Dead

Nonprofit funeral homes have popped up across the country to ensure that grieving people don't get price-gouged after the death of a loved one.

When Nantucket resident Nancy Holmes's mother died in September 2014, she called the nearest funeral home to make arrangements. But if she wanted an embalming, the funeral home told her, it would require shipping her mother's remains via ferry to their facility on the mainland. After that, the body would have to be ferried back to the island for the service and subsequent burial in the local Catholic cemetery. "Your choices are dictated by the distance of the boat ride and the cost of the boat ride," she told me. Ultimately, Holmes decided against it and asked that the funeral home send a hearse with a coffin to the island instead. "Other people don't mind. We just didn't want to send her. It wasn't what we wanted... It just seemed kind of ridiculous to me."

Transporting a body from the place of death to a funeral home is usually an inexpensive and straightforward process in the United States. Until January 2014, it wasn't a problem in Nantucket either. That's when the island's only funeral home closed its doors, after the home's owner Richard Lewis retired at the age of 79. Ever since then, the 30 miles of bay that separate the island from the mainland provide for delays and additional costs that often lead to residents altering their funeral arrangements.

"There are storms in the winter time. Ferries get cancelled a lot between September and April. There were times when the boat didn't go [for several days], and somebody died and funeral arrangements were delayed," said Catherine Stover, the Nantucket town clerk who has been leading efforts to open a funeral home on the island. She added that "this is no reflection on the service that people have gotten, which has been wonderful." Stover also happens to be a licensed funeral director who worked in the industry until 1998 on the mainland. She said that the Lewis family, who formerly handled all of the island's funerals, "were splendid caretakers of the dead. We owe them a lot."

The challenge in opening a new funeral home is making such an operation financially sustainable. Nantucket's permanent population is about 10,000; in the summer, it surges to about 50,000. There simply wouldn't be enough business to sustain a for-profit funeral home. "If people could afford to build a funeral home and run it in Nantucket, they would've done it," Stover reiterates.

Stover's solution is to form a nonprofit corporation which will be on public land, rather than having to purchase expensive real estate on the open market. She has also convinced a local contractor to build the facility at cost. So far, the residents have been supportive. A recent town meeting approved the location, and through a crowdfunding campaign she raised the funds needed to file paperwork for the 501(c)(3) nonprofit corporation.

Of the almost 20,000 funeral homes in the United States, only a handful are not-for-profit. Often, it is to serve members of a specific religion. But there are secular outfits as well. In the case of Nantucket, geography necessitates it—but geography isn't the only reason to eschew profits.

"People couldn't afford the cost of a funeral. So they just all came together and organized this thing to have a funeral home and it's been that way ever since." –Malcolm Magar

The People's Memorial Association of Washington (PMA) is a nonprofit organization that was formed in 1939. For 65 years, PMA worked with Bleitz Funeral Home in Seattle to provide its tens of thousands of members a low fixed rate on cremation and burial services. In 2006, Bleitz was purchased by funeral and cemetery conglomerate Service Corporation International (SCI). SCI did not renew the contract. Instead, PMA proceeded to make contracts with Alderwoods Group, a provider of funeral services with five locations in King County. The following year, SCI bought Alderwoods—effectively spelling the end of the PMA contract.

While PMA had statewide reach and worked with funeral homes all over Washington, the Alderwoods acquisition meant that it had no funeral homes in Seattle with which to enter into agreements. PMA's board of directors decided that the only way to guarantee affordable services for their Seattle members would be to start their own funeral home. As a result, the Co-op Funeral Home opened its doors to the public in June 2007.

Co-op's managing funeral director Nora Menkin told me, "It's still a business. We deal with the same profit/loss statements and balance sheets as any other business. But we also have the good fortune that [if] we end the year in the black, it doesn't matter how far in the black. I think last year we had maybe $200 profit, and that's a good year. We paid our staff, we have good benefits for everybody, we treated our clients well."

When Menkin began at her current role with Co-op, her predecessor provided her a list of five other funeral homes that were already operating with a similar operating structure. According to its website, the nation's first to operate in this way is People's Cooperative Funeral Home in Lone Wolf, Oklahoma, which is still in operation today. According to managing funeral director Malcolm Magar, People's Cooperative was started in 1936 when the owner of the existing funeral home couldn't afford to keep it.

"It was the Depression. People couldn't afford the cost of a funeral. So they just all came together and organized this thing to have a funeral home and it's been that way ever since."

Magar has worked there for 53 years. It's not incorporated as a nonprofit, but he told me that they "operate as close to it as we can."

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While an operator that isn't driven by profit might be seen as the place to go for cheap funerals, the desire to offer the lowest price is not necessarily what drives a nonprofit funeral home. Stover told me that in her community, "people have an emotional need to have a local place." Holmes added that there's a very practical consideration of having a space to hold a viewing: "We could have done it at our church. But people that don't belong to a church don't have a place to do it any more. I suppose it's not against the law to do it in your home, but most people aren't comfortable with that."

Photo by Flickr user Peter

According to Menkin, Co-op does operate with the goal of maintaining the $755 member price for direct cremations (non-member price $895), but there are now places in Seattle that are cheaper. Menkin told me that the main difference between Co-op and other funeral homes is that traditional homes want clients to come in so they can sell pre-need arrangements after someone has just completed the paperwork for the person that just died. This happens because staff often works on commission. At Co-op, staff members do not receive commission, "so there's no incentive to sell a family anything that they don't need."

People's Cooperative was not the only organization of its type to form and operate during the Great Depression—though, from my research, it appears to be the only one that still survives today. A big reason for that is because in the years after World War II, co-ops in general were seen by many with suspicion as vehicles for communism. Funeral co-ops and memorial societies like PMA, which operated all over the country, were seen by anti-communists as part of the same conspiracy.

Josh Slocum is executive director of the Funeral Consumers Association (FCA)—a funeral industry watchdog group (PMA is an FCA affiliate). Slocum provided me a 1966 pamphlet entitled "Co-ops and the Funeral Industry: A case study of Socialist war on a segment of private industry," which is riddled with conspiratorial scaremongering about the evils of cooperative funeral homes and memorial societies like PMA. The cover has a backdrop of hammers and sickles to drive home the point. PMA says that it took until 1957 before they had a written contract with Bleitz due to concerns about being publicly associated with an alleged communist group.

Fast forward to today, and both McCarthyism and funeral cooperatives are all but gone. The other great communist menace—memorial societies—are still very much around, as local affiliates of the Funeral Consumers Alliance.

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The for-profit funeral industry also hasn't been supportive of these endeavors. In Massachusetts, state law stipulates that funeral directors own at least 10 percent of the business. This means that effectively a nonprofit (which has no shareholders) could not operate a funeral home. Stover was able to lobby local legislators to amend the legislation for an exemption which she said passed "at the 11th hour." Stover tells me that she encountered "a ton of pushback" from the funeral industry through an "organized statewide [lobbying] effort." Washington had no similar ownership laws impeding the creation of Co-op and in Menkin's experience, the member of the state Funeral and Cemetery Board see themselves as "regulating the industry against the bad eggs and making sure consumers are being taken care of."

When asked if Stover sees mainland for-profit operators in an adversarial way, she responded that she doesn't. "We have a lot of options available to use that are not available to the general industry." One of those options under consideration is to run the funeral home as a co-op. As of right now, she estimates that $2 million would need to be raised in order for the funeral home to become operational. She's optimistic that this is an achievable goal and hopes to be operational in 2016. One thing that is for sure is that she's not looking to get back into the business herself: "I've got a nice job that I love, I've got grandchildren, and I've got stuff I wanna do."

If Co-op is any indication, a nonprofit operator can be quite successful even after just a few years in business. Co-op is now the fourth highest volume funeral home in Washington State. Menkin says the growing staff is "bursting at the seams" at their current location and they are looking for a new location.

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