Merger Checklist

“A successful merger is carefully planned, soberly decided and requires close and continuous consultation with all who harbor reservations toward the union.”

Ron Reed, President, Family Service of Greater Saint Paul and East Communities Family Center

Common Merger Steps*

1. Before

Understand merger as a potential option
Identify the benefits of a merger for your organization
Learn about mergers, the common challenges and success essentials, like the role of trust and change management
Find strong merger partners
Identify potential benefits for best merger partner(s)

2. Initial Actions

Share interest in merger with top potential partner, i.e., both executive directors and board chairs meet
Confidentially share concept of possible merger with other key stakeholders, like community leaders, advisory committees and key donors, (as appropriate)
Create Common Understandings, like
For each party, what is required? What is wanted?
Structure of the merged organization- One survives? New Organization? Other?
Develop a case for merger
Governance, identify a proposed board structure
Financial
Merger costs
Existing obligations i.e., to members, vendors
What is the vision? How will we measure success and benefits?
Membership criteria
Headquarters? Mailing location?
Anticipated timeline
Other, unique needs of partners

3. Decision to Explore

Each organization presents information about their organization to the other board of directors
Each board passes a resolution to explore merger

4. Study Period/ Before Merging

Joint Committee Work
Identify potential names for the post-merger organization
Legal Review of the organizations
Financial Review of the organizations, including any outstanding liens and lawsuits
Fine-tune Common Understandings, including the case for the merger as needed
Learn how each organization’s board operates and make decisions. Explore how the “board of the future” will operate.
Review bi-laws, articles of incorporation, IRS determination letters to determine that the requirements of current organizations will be met
Insurance Policies, i.e., Directors or Officers’ Insurance, ensure it will remain in place during process
Are both groups current with their IRS and State of Florida filing requirements?
Work with the public, membership, donors, common donors and other stakeholders to gather their thoughts, concerns and ideas that need to be considered as part of merger
Other, unique needs of partners
Joint Committee agrees on documents and seeks boards approval on Common Understandings, the Case and their other work

5. Boards Actions

Either separately or jointly the Boards meet to review joint committee work, approve Common Understanding, the Case, etc. Both agree to create Plan of Merger document.

6. Plan of Merger Document Developed

7. Board Approval

Each Board Approves The Plan of Merger
Create Merger Transition Team

8. Merge

Complete final due diligence checklist
File legal paperwork

9. Post merger

Merger Transition Team develops or oversees implementation plan including:

Strategic plan
Fund development plan
Operation budget
Program priorities
Communication plan
Marketing plan
Board integration/ training
Financial- transfer assets, close out accounts, integrate accounting systems
Technology- how will websites and databases, etc. be integrated?
Insurance-confirm coverage is obtained, maintained and is appropriate
Records. How will records will be kept and organized?
Timeline
Continued learning about change management and building trust
Other, unique needs of partners

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* This document was created as part of a project with the Nonprofit Resource Center of Sarasota. It was adapted form a number of sources including the excellent resource, Merge Minnesota.