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Mergers, Strategic Alliances, and Collaborations: Six Ingredients for Success

Message from Don Crocker, CEO of the Support Center

Once a prohibited utterance in the nonprofit sector – The “M” word (Mergers), is not only becoming more common in conversation, but is also something we are learning more about.  Groups such as the James Irvine Foundation, BoardSource, La Piana Consulting, and others have expanded on early experiences to understand more about strategic restructuring – including mergers, strategic alliances, and collaborations – to enable our sector to embrace options for change.

Why are we now more open to such conversation?  An uncertain and volatile economy, the competitive funding environment, and dramatic cuts in government funding are upon us. The confluence of these trends are spurring a growing number of nonprofits to examine the potential of strategic alliances or mergers with other nonprofits to strengthen their organization’s impact, to sustain critical services to their constituents, or sometimes in more dire circumstances, as the best means of survival!

Although new alliances are taking shape, the conditions for success are often not reviewed.  Those who are helping with organizational assessment and restructuring (like the Support Center, La Piana Consulting, and others) know–from the nonprofits and funders we work with–that there are key predictors of success that go beyond the obvious criteria of a good fit between the two organizations’ programming.  Some of these ingredients include:

  1. Trust. There must be a high degree of trust among both organizations’ leadership–if the leaders do not trust each other, the talks can fall apart quickly.
  2. Prior Experience. When the two organizations have had success in collaborating with one another in the past there will be a higher likelihood that a merger will work.
  3. Communication. Continuous clear and honest communication and openness between the partners is key– the opposite is a real red flag.
  4. Teamwork. If there are strong staff teams that can manage the process, they can play a big role in making a merger or strategic alliance successful–it can make all the difference.
  5. Involve Key Donors. If you have funders who are committed to your organization, don’t be afraid to talk to them about what is not working well. They often can be your best partners in supporting and guiding you towards a new path for your organization.
  6. Don’t Go it Alone. Get competent assistance in the process.  Not just from a consultant who has experience with nonprofit alliances and mergers, but also from the other professionals you may need, such as legal and marketing assistance, etc.

In the current environment, discussing the “M” word and examining restructuring options needs to be a basic element of every organization’s regular assessment and strategic planning process.  As the leaders of nonprofit organizations, we owe it to our clients and the communities we serve.  Please share your thoughts, learning, and experiences with us.