Sometimes things just work better together- peanut butter and jelly, mac and cheese, and in some cases nonprofits focused on the same goals.
A merger of nonprofit organizations shouldn’t be the last resort or a response to a financial emergency. When done correctly, mergers can do great things for your organization and help further your mission.
The Stanford Social Innovation Review found that 88% of the studied organizations were better off after merging to achieve their goals and increase overall impact. When two organizations with similar goals and values come together, they can make each other stronger, so merging two or more organizations together could be a strategic move.
Why Should Nonprofits Merge?
Some organizations are pushed to merge with others because of external factors like funder pressure, changing community needs or environmental changes. Or it could be internal factors caused by lack of funding or sustainability of programs.
But there are a lot of benefits that your nonprofit can get beyond staying open. Merging forces with an organization that aligns with your mission and goals can mean finding an ally. Some other benefits include:
- Sharing resources like facilities, tools or resources
- Joint efforts on fundraising, research, training and programs
- Getting access to another organization’s network
- Larger political influence and market share
- A bigger team with a variety of skills, experience and knowledge
- The ability to learn and grow with your new organization
When Is It A Good Idea for a Nonprofit to Merge With Another?
There are a few factors that go into deciding whether or not two nonprofits should merge with another.
Lack Of Resouces
Resources come in many forms: money, staff, volunteers, equipment- all things you need to keep your nonprofit up and running.
If you never have enough money or tools to work properly and have staff working multiple jobs in one, then consider how a merger could help you. Joining a more established nonprofit could alive some of the stress you have now by giving you access to a facility and other resources.
Don’t let you, your staff or volunteers get to the position where you’re overworked and burnt out.
If you’re in an area with many similar groups that offer more services, have a larger amount of dedicated donors or offer steep competition, it may be better to join forces.
Not to say those small nonprofits can’t compete with larger ones, but if you’re providing similar services to the same audience, why work against each other? If you think that combining efforts with them would improve your community’s lives, then it’s definitely something to consider.
Surviving Day To Day
This is often the main reason organizations merge. If you are on a shoestring budget surviving day to day, not knowing when your next check will come in, think about how a merger could benefit you.
Domestic nonprofit corporations may consider merging if one can offer stability to the other. Joining a more established nonprofit offers stability as they have an established pool of donors in your community. However, considering a nonprofit merger shouldn’t be a last-ditch effort.
Try to look at your organization as a whole and ask yourself if merging two organizations together would be beneficial beyond financial help.
Little Community Support
People have a hard time telling you apart from other organizations and don’t know what your organization does. If you’ve tried repeatedly to get your message out there or find you’re developing a negative public image, it could be time for a change.
Many organizations feel like they have to compete with others to get the funding they need, but why fight them when you can join them? Merging two organizations into one means you have less competition, more resources and support, and are still doing the work you love.
What do you need for a merger to be successful?
- Focus on your mission, values and the benefit you want to bring to your community
- Take the time to get to know and trust the nonprofit you’re merging with
- Hire a non-bias facilitator to guide you both through the process and keep things fair
- Get all the cards on the table before signing anything, and don’t be afraid to ask tough questions
- Keep your team and stakeholders involved to calm their anxieties and secure their continued support
- Don’t drag negotiations out, try to solve conflict quickly but effectively
- Develop a thorough integration plan creating a blueprint leading to your goals
- Take a step back to address the human side of the merger, ask people how they feel and be there to support your staff, volunteers and clients through the change
- DO NOT wait for crisis hits, do it before you have to
Nonprofit mergers are a great way to strategically join forces with another organization to increase your impact and make a difference in your community.
Although there are some things to consider when the actual merger occurs like the acquisition process, transferring entities and of course working with an entirely new staff and environment. But with proper communication, a good acquisition strategy and strong leadership, you should be able to adjust well within your new organization.