For the last few months, I have been working on a project to help non-profits to explore mergers as an option to enhance their futures. The following are insights from the project’s readings and discussions. Even if you never consider a merger, you will find the concepts useful because working with other non-profits is a key way to increase resources, and often funding, for your mission. Also, the insights apply to more than mergers; they apply to all inter-non-profit strategies.
1. Understand Mergers’ Full Potential
While long perceived as a way to help struggling non-profits survive, Alexander Cortez, William Foster, and Katie Smith Milway, in their article, “Nonprofit M & A: More Than A Tool for Tough Times,” share that mergers can, “strengthen your effectiveness, spread best practices, expand your reach… and do all of this more cost effectively.” The authors offer examples of healthy organizations that seek and court merger opportunities to add services or offer them in new locations. Have you ever looked at other non-profits and asked, “Whom might we merge with to become stronger and more effective?”
To expand your thinking about mergers, explore how others use mergers to create more mission. Start with this database at the Foundation Center (http://foundationcenter.org/gainknowledge/collaboration/). It’s based on data from submissions to the Lodestar Foundation’s Collaboration Prize. David La Piana also provides a number of helpful books about merging. Review Jean Butzen’s Mission + Strategy = Social Value Blog. Make it your goal to see the big picture about mergers to broaden your options and inspire new possibilities for your non-profit.
2. Benefits First
I came to the project with the conviction that benefits needed to be the first work of collaborative efforts. Over time, my conviction has grown. Interactive non-profit relationships, especially mergers, require substantial efforts to succeed. Non-profit leaders are busy enough without new burdens. However, to remain competitive, all non-profit leaders find time for activities to improve outcomes. Knowing the benefits and your odds of achieving them can help to provide energy for the effort. A list of potential merger benefits includes:
3. Find Strong Partners
Once you decide that a merger is a good idea, your next step is to find strong merger partners. Yes, this is intentionally plural. Identifying more than one potential candidate will help you to expand your thinking about mergers, to be selective, and to step away from any specific interactions if negotiations falter.
Here are several success indicators to look for in strong potential partners for your organization:
4. Benefits for Them
Part of strategizing mergers involves helping your potential merger partner to see positive outcomes from merging. Early in the process and as you work together, list specific benefits your partner stands to gain. Review the list in Step 2. Take time to write a customized record of benefits, from their perspective. No one wants to dance if they can’t foresee a good experience. Help them to “see it” by creating a list of opportunities. As you work together, share your list and continue to modify their list by clarifying gains. This will help to increase trust. Having each party’s benefits to review will help you to stay with the process as you hit unavoidable bumps.
5. Learn, Especially About Trust
With the framework of benefits in mind, learn about mergers, common challenges, success, time lines, trust, and change management. Learn what mergers entail so that you can set realistic expectations. These are not done-in-a-day projects. Yes, there will be a lot of paperwork. However, in the coming together of two or more divergent parties, the paperwork is a formality. It has been said, and it’s certainly true in mergers or any significant joining, “The soft side is the hard side.” Mergers involve significant emotional content. Questions like these are raised, some said, some unsaid: “Is my organization going to be taken care of in the merger? Will the values we hold dear be honored? Will my staff and volunteers recognize this as an enhancement of the way we achieve our mission? Are we safe? Am I safe?” For help on trust building, see the May 2010 Added Value (in the newsletter archive). Its focus is on donor trust but the lessons apply to mergers, too.
As you consider ways to increase the resources of your organization, merger is one option to consider. If you decide to pursue a merger, remember that, “All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence,” (Martin Luther King, Jr.). Merging with another non-profit organization requires this excellence.
Looking for additional resources about mergers to help you in your efforts? Contact us today about developing a merger strategy for your non-profit and see these additional resources:
1. Planning Document: A useful form to help you to decide and record all of the details you need at your meetings.
2. 1 to 10 What Merger Looks Like: A facilitation tool, with instructions, to use when groups meet to determine “buy-in” to the merger.
3. And don’t forget the Audio –where you can learn how to Raise the Bar on your partnerships and group experiences, including mergers.