Mergers and Collaborations
By Alex Neuhoff, Katie Smith Milway, Reilly Kiernan, and Josh Grehan, The Bridgespan Group
Joint programs, shared support functions, and mergers are frequent paths to scaling results in an era of collective impact. But few studies capture success rates and barriers. A survey of both funders and nonprofits charts the landscape.
Despite growing support for nonprofit mergers, promising combinations often stumble over three emotionally charged issues: getting the boards aligned, finding roles for senior staff, and blending the brands. Creating a due diligence process that overcomes these hurdles can increase the likelihood that a merger will succeed. (Stanford Social Innovation Review)
Often considered a last-ditch effort, mergers also provide leaders of healthy organizations a way to strengthen effectiveness, spread best practices, expand reach and—yes—to do all of this more cost-effectively. Unfortunately, few organizations or funders think of mergers in this way.
Can social innovators can better recognize opportunities to join forces? Should students focus less on starting up and more on scaling up? Are solutions to illiteracy, climate change, or HIV/AIDS truly transferable from one location to another? Bill Drayton of Ashoka; Katie Smith Milway from The Bridgespan Group; Deogratias Niyizonkiza of Village Health Works and Rosario Perez from Pro Mujer discuss these topics and more at the 2014 Clinton Global Initiative University in Phoenix, Arizona.
Blog Posts and Case Studies
The nonprofit leaders whose stories we've published this past month show that collaboration does take courage and can be worth the initial pain. To help ease the process, we've identified four key lessons that every organization considering a merger or collaboration needs to consider.
John MacIntosh of SeaChange Capital Partners says that truly mission-driven organizations—even healthy ones with ambitions for growth—recognize that achieving impact is a team sport, and that there may be ways to be more efficient, effective, or stable by joining forces than by going it alone.
The merger of the United Ways of Battle Creek and Kalamazoo, Michigan, shows how streamlining operations, if well planned and communicated, can lead to a stronger, more effective organization.
There's no room for egos in nonprofit mergers, says AIDS Action Committee's Rebecca Haag. Instead of thinking "How does the merger affect me?" nonprofits should ask "How does this enhance our nonprofit's ability to meet its mission?"
During a 2012 strategic planning process, AIDS Action Committee of Massachusetts began to consider taking on a partner to help expand and fulfill its mission. A merger with Fenway Health helped put its plans on track.
For Steven Payne of Oakland East Bay Symphony, the process of forging a unified nonprofit identity from a merger was neither easy nor quick. The three performing arts organizations that merged to create the Symphony needed to develop a new culture to achieve their new mission.
The merger of Oakland East Bay Symphony, Oakland Youth Orchestra, and the Oakland Symphony Chorus shows how a merger to save costs led to a focus on community impact.
Sister Paulette LoMonaco and Laurie Williams of Good Shepherd Services discuss how their nonprofit approaches integrating staff members into its culture during a nonprofit merger.
Good Shepherd Services merged with two smaller nonprofits to extend its reach and deepen its impact serving young people in high-need neighborhoods. In the process, it discovered opportunities for developing key staff members in the newly merged organization.
Rebranding a merged nonprofit is a far greater challenge than most realize, says Linda Johanek, CEO of the Domestic Violence & Child Advocacy Center. Here's how her organization is enduring the short-term pain of a rebrand to realize the long-term benefits of a merger.
The nonprofit merger of the Domestic Violence Center of Greater Cleveland and the Bellflower Center for Prevention of Child Abuse is a strong example of how discussions about lowering back-office costs led to a vision for merging to increase scope of services citywide.
Serena Powell, the executive director of Community Work Services, a workforce development nonprofit, shares how her organization is doing just four months after a merger. So far, her organization has gotten all it hoped for, and more.
The merger of Pine Street Inn and hopeFound, two nonprofits committed to ending homelessness, shows how a plan to increase scope resulted in the expansion of services and increased scale.
Kim Thiboldeaux, CEO and president of the Cancer Support Community, found that the answer to the question "does social and psychological care help patients fight cancer?" made all the difference in the nonprofit merger of The Wellness Community and Gilda’s Club Worldwide.
The merger of The Wellness Community and Gilda’s Club Worldwide, to form the Cancer Support Community, illustrates how a merger to maximize operational effectiveness led to increased national prominence and policy influence.
Crittenton Women's Union president and CEO Elisabeth Babcock says tap your senior staff and trust their ability to provide valuable analysis on the potential upsides and roadblocks of merging. In the case of Crittenton, the staff at both legacy organizations envisioned a more streamlined and strategic organization that could propel a greater number of low-income women to economic independence.
Three mission-driven rationales can guide successful nonprofit mergers: an aim to grow scale (e.g. broaden reach); to increase scope (e.g. broaden services)or to streamline operations (e.g. increase efficiencies). Each comes with its own set of challenges and lines can blur between them. The merger of Crittenton, Inc. and The Women’s Union is a strong example of how a bid to grow scale created an opportunity to transform services.
How and why do nonprofit mergers succeed? To explore the reasons, Bridgespan has combined forces with La Piana Consulting, The Catalyst Fund for Nonprofits, and The Lodestar Foundation to offer a collection of case studies and blogs on "Mergers that Make a Difference." We invite you to join the conversation.