therapist employment

Types of mental health organizations

Posted in Practice Infrastructure–Tech, Website, etc.
Tagged ,

There are several types of mental health organizations employing psychotherapists. Many of these organizations are built by, managed, or owned by mental health providers. 

In this article, I will look at six mental health structures and how they came to exist. I will also briefly look at some of the pros and cons of each type of mental health organization. 

But before we do, let’s think about where therapists’ careers begin.

Where we get our first jobs

Some clinicians get their first job and stay with it for the rest of their careers. They may advance through the ranks as a clinician to a supervisor. Then they may be promoted to a manager and perhaps become an administrator.

But just as often, therapists move from that first job to another that they think might be a better fit. Often that next job is into an existing organization created by others. 

Others move out on their own, creating something brand new. They create an entity or organization that did not exist before. 

This website primarily focuses on the creation and management of this type of organization. Read more about creating a practice here: 

The ultimate guide to starting your own practice

And here is an article listing the top 15 places that therapists work: 

Top places to work as a counselor

Who owns the practice? An overview

Let’s begin our analysis by understanding the variety of ownership arrangements. 

Most outpatient psychotherapy occurs in one of several types of organizations. The least complex, but perhaps one of the more challenging, are the solo practices. These are usually sole proprietorships. A single therapist rents space then hangs out his or her shingle, and practices alone. The owner may, but does not have to, form a separate legal entity to start this practice. For taxes, the owner can simply use a Schedule C on the individual tax return. 

Large group private practices are more organizationally complex. One person may found and own these organizations. Sometimes a partnership owns the practice. And typically, the founder(s) created a corporation that files separate tax returns each year.  

Furthermore, the not-for-profit community-based organizations are still more organizationally complex. These are often called “community mental health clinics.” An independent board, composed of volunteers, “owns” these organizations. Consequently, the board members give their time, expertise, and finances to the cause.

Additionally, there are many non-clinical organizations, such as schools or corporations, that hire many therapists as well. These may be “owned” by a governmental body, a not-for-profit, or a for-profit company. The range of possibilities is quite diverse here. 

Let’s dig more deeply into each of six types of mental health organizations.

1: Solo practice

According to the Department of Labor data, the largest percentage of therapists are self-employed. In other words, they work for themselves. 

I write about how to start a solo practice in this article: The ultimate guide to starting your own practice.

For data supporting the prominence of solo practice as a workplace see:

If this data is correct, then many are creating solo practices, with some contracting for support services.

Certainly, the obvious advantage of this type of organization is the level of autonomy this structure allows. But on the other hand, this is a lonely way to practice without much safety net for difficult times. 

2: One owner and several employees

Many founders of a solo practice decide to hire and grow the practice into a larger entity. The organization begins as a solo practice but morphs into something else. 

Consequently, the big transition for these organizations is when the clinician decides to hire others. Usually, this is in response to the overflow of work that his or her efforts have generated.

This organization has no other partner, and it is clear who the leader is, the founder and owner. These aspects can be positive or negative. Carrying the load as the sole owner can be lonely. (See, Why effective leadership is lonely and exhausting.) And yet, the decision-making process is transparent and agile. 

For more examples, read more about the decision to hire others in these posts:

And then, I have many posts on how to grow this type of organization. Start with these articles: 

3: Partnerships

Partnerships are yet another kind of organization. In this case, a group of like-minded therapists finds each other, often in graduate school or at a previous employer. They join together to form a new venture. 

Wherever these partners meet, they have in common the desire to minimize costs and maximize autonomy. 

I have written an article on many of the details to consider in forming a partnership. Creating this type of mental health organization needs to be carefully thought through. I cover many of the pros and cons here: Avoiding these partnership issues saves you down the line.

4: Not-for-profits

Not-for-profit (NFP) organizations begin with a mission, founder, and board. Someone has the vision to address an unmet need. In mental health, that need might be for serving the poor, the youth of a community, or serving some other population. 

These types of organizations grow as the founders are successful at getting others emotionally and financially invested in that mission. Additionally, the not-for-profit board builds the organization by getting the broader community to invest in the mission. 

Consequently, these organizations can be very fulfilling workplaces. Because the mission is so prominent, the sense of purpose is more clearcut. And yet, often, these employers do not pay well. And sometimes, the focus can drift from the quality of care to an overemphasis on satisfying the funding agencies.

5: Non-clinical settings

There is another type of organization that employs many therapists but is not a mental health organization. These are existing organizations that see the value of incorporating therapists into what they are doing. The primary mission of the parent organization is some other goal than one directly related to therapy or clinical work.

For example, many therapists work in school settings where the primary mission is an educational objective. Churches or other religious organizations also employ many therapists. 

Additionally, some therapists work in large corporate environments. For example, many mental health workers run Employee Assistance Programs in large corporations.

Typically these non-clinical settings can be very creative environments. And yet, the corporation usually is hiring therapists to provide other services than outpatient psychotherapy. And it is not unusual for non-clinicians to supervise therapists in these environments. The focus on other things than psychotherapy and differences of vision can lead to discontent. 

6: Hospitals and government

Finally, there are positions in hospitals. These federal, state, and NFP facilities provide short-term, crisis-oriented, psychotherapy. But typically, the stays in the hospital are short, and therefore the therapy is short-term.

Through the 1970s to the 1990s, the government shut down many inpatient facilities, and hospitals eliminated longer-term inpatient care. With those changes came the wholesale elimination of long-term interactions with patients. Hospitals and institutions became oriented around crisis stabilization rather than long-term care. This trend continues today.

There are a few exceptions. For example, the Veteran’s Administration (VA) provides some ongoing programs for veterans that include outpatient psychotherapy. Most of these services are in a group format. But increasingly, outpatient psychotherapy is independent of hospital programing. 

As a result, hospitals are not often deeply involved in outpatient psychotherapy. See this post for an explanation: Wealth in mental health–Why isn’t there more?

Furthermore, medical facilities tend to view mental health as the “stepchild” of the broader medical community. And psychotherapy is only a small part of the inpatient mental health system. However, because of the exposure to a wide range of people with diverse mental health issues, these can be excellent places for clinicians to learn and grow. Nevertheless, learning the skills of outpatient psychotherapy will have to occur in another setting.

Also read:


I have reviewed some of the characteristics of six types of organizations where therapists work. And I have listed a few of the pros and cons of each setting. Most therapists will work if several settings and perhaps even different types of mental health organizations. There is no doubt that the mental health system is a hodgepodge of types of organizations. But that is what it is.

Enjoying this article? Share your thoughts.

  1. Catharine Phillips says:

    Thanks, David. I am now in the midst of none of the six options. Getting my pension. Have a free office at St. Mark’s. Do some counseling and spiritual direction. Help people find counselors and spiritual directors. Receive some remuneration. Have a call to work with elderly and those with disabilities…An odd beast, but a beast I love.

    1. David Norton says:

      Hi Catherine. Indeed there are many places that value our clinical skills. I am hearing from many who found ways to use their gifts that are beyond the typical “outpatient psychotherapy” gig. Glad you are working your calling. Sounds very interesting.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.