Nonprofit Mergers

Are Nonprofit Mergers and PartnershipsAre Nonprofit Mergers and Partnerships Increasing in Popularity Increasing in Popularity?

In today’s challenging economic environment, more nonprofits than ever before are considering mergers, collaborations, and/or strategic alliances. Many organizations are looking for ways to shore up finances, to make their organizations appear more attractive to funders, or to address a succession vacuum. But the time is also ripe for the leaders of healthy organizations to consider proactively engaging in mergers, collaborations, and strategic alliances as a way to strengthen effectiveness, spread best practices, expand reach—and to do it all more cost-effectively, making best use of scarce resources.

Is a Merger in Your Organization’s Future?

Merging with another organization is by no means a panacea for all of the many and varied challenges facing nonprofits, nor is it the only alternative for organizations seeking to grow. However, it can and should be seen as a forward-thinking strategic tool, particularly as the pressures that drive nonprofit leaders to consider mergers and strategic alliances are increasing.

Bridgespan reports that the trend in increased mergers among nonprofits is occurring, in part, because there is a projected leadership deficit of 330,000 senior management positions in the next five years. Therefore, more organizations will be struggling—and competing with each other—to find strong leaders, which can be a catalyst for considering a merger.

The types of strategic benefits that many nonprofits are experiencing from mergers include:

  • Quality improvements in existing services (improved programs, training, supervision)
  • Improved efficiency in existing services (better utilization of assets, reduced overhead)
  • Increased funding (access to better fundraising capabilities, brand or new relationships)
  • Development of new skills (programmatic expertise, broader leadership team)
  • Entry into new geographies (overcome local barriers that are regulatory, community relationship)

Mergers and the various types of strategic alliances can be tricky to administer. To ensure success, competent advisors with experience in setting up and conducting these agreements can be helpful. Contact Nonprofit Kinect today for a free consultation on how your organization can benefit from one of these cost effective approaches.