Plenty of great reasons exist to support the merging of two nonprofit organizations. But what about the cost? Doesn’t growth usually inflict growing pains? Without access to the right resources, the financial expense of merging might appear to outweigh the benefits.
Luckily, appearances can be deceiving. It is definitely possible to merge two (or more) nonprofits without breaking the bank.
The Sustained Collaboration Network was conceived to fill this exact purpose. With members in six cities – Los Angeles, New York, Dallas, Philadelphia, Pittsburgh, and Scottsdale – the organization serves as a fiscal agent for pools of “patient capital funds”. Offered by private foundations and individuals who support the goal of expanded collaboration, these funds can be utilized to aid in the cost of nonprofit mergers.
Since the start of this initiative, 230 Los Angeles nonprofits have received $3.7 million in grants. The vast majority of exploratory grants (85 percent) have resulted in signed agreements. Mergers and acquisitions account for half of those agreements, with other types of formal partnerships accounting for the rest. Of these nonprofits, 80 percent have been able to achieve a greater impact with less funding.
The process can involve two different types of grants:
- Exploratory grants, typically in the range of $10,000 – 40,000, help organizations to hire lawyers, financial analysts, facilitators and other third-party experts.
- Implementation grants, averaging $30,000, but sometimes ranging up to $100,000, are offered once all parties agree to move ahead with the merger. These funds can be used to cover the costs of integrating such critical necessities as software, IT systems, rebranding, combining office space, etc.
Aside from funding, the Sustained Collaboration Network also provides guidance and consulting services for nonprofits who wish to pursue a merger. Differences in leadership, loyalties, personal feelings and more can complicate a merger if care is not taken at each stage of negotiations. Professionals can help bridge those gaps by initiating and guiding important conversations.
Yes, it is possible to serve the community more efficiently, achieving the same or greater impact with fewer dollars. Contact Mirenda & Associates to discuss the future of your organization and learn how we can help your nonprofit grow – without the growing pains.