METHODIST HOMES ALLEVIATION FUND: AN UPDATE (April 2025)
Our Fund has been in
existence for nine months now, and so we would like to give you some feedback
on the Fund’s performance, to date, and to also share a few comments.
The reasons for setting up the Fund---to enable MHA to afford to assist residents who fall into destitution late in their lives---has been fully explained in the brochure which has been produced and distributed (and is available from your Manager, from Head Office, and on our website).
The Fund’s dedicated Investec bank account opened with a credit of R500 000, which had formed part of MHA’s overall investment portfolio. It was a positive way in which to kick-start the Fund!
Since inception, an additional R240 000 of funds has flowed into the Fund. This is a very positive start, and it demonstrates to the Board and Management the wisdom in launching the Fund.
Sadly, the list of residents requiring financial assistance has not diminished, and we have anticipated this in our scenario planning.
MHA continues to support needy residents, and that amount remains in the region of R1 million per annum. Until the Fund achieves critical mass (our long-terms target is R15-R20 million), which would be when the Fund generates annual interest which would cover the support outlay, MHA will need to continue to use our general income to provide that support. This puts a handbrake on our ability to carry out all the work we need or want to do, on an annual basis.
Donations received to date range significantly, from a one-off amount of R75 000 to a monthly payment of R100 added to the Levy. Every Rand donated, irrespective of the amount, is received with huge gratitude. Please know this.
There is no way in which MHA can measure the potential income to be derived from Bequests; these usually only become apparent when an Estate is being executed, and we are informed of the generosity of a resident who made provision in his/her Will. Some residents have mentioned to the Fund Managers that some provision has been made, and this is heart-warming.
Since the Fund was launched, a few residents have asked questions such as: Why should we support the Fund which has been set up to assist residents who may have been irresponsible with their investments/retirement funding, reckless in their spending, or perhaps supported family or others when they could not really afford to do that?
Does Head Office scrutinize the financial standing of incoming residents, to ensure that they have funds to see them through their final years? Is this being monitored subsequently?
Challenging questions such as these are valid, and require a general response, because the Fund Managers and the Board need to dispel any negativism around the concept of donating or bequeathing. Perhaps the following may help those residents who have such concerns:
ü The financial standing of incoming residents is established prior to a Life Right Contract being signed. MHA needs to be comfortable that new residents can afford to live independently, pay their Levy, and to enjoy life as retired members of the Village community, and when they transition to a Bedsitter environment. We don’t interact with residents subsequently on this; we should consider a non-intrusive way in which to do this
ü Needing to move to Frail Care, usually late in life, brings with it a host of challenges, not the least of which is the financial burden; many residents rely on pension structures which are 30+ years old
ü Instances arise where a resident is well enough to continue in a cottage or apartment, but his/her partner requires Frail Care facilities. The cost of that is enormous, and is usually not anticipated when planning one’s financial future
ü Head Office is reviewing how MHA can best measure a resident’s ability to afford to live in MHA facilities, and to deal with the financial and health curveballs which are thrown their way. We believe that we can tighten up on this, and also to research having guarantors in place
ü Lastly, MHA is investigating changing the Fund’s structure to provide tax incentives.