What about a merger?

Good Nonprofit Endings Follow-up Post

Image description: Two sets of train tracks converging. Photo by Lance Grandahl on Unsplash

Readers I’ve spoken with this week have commented that my posts about nonprofit closures last week did not address mergers as a strategy. When nonprofits are in crisis, people often start thinking about a merger. We are stronger together, right? Yes, in general, this is true. Nonprofit mergers and acquisitions can result in stronger combined organizations.

Unfortunately, they take time and energy to pull off, and many organizations are fiercely independent and unable to come to the point where they are truly open to joining forces until it is too late. Even more difficult is finding two likely merger candidates who are both open to such a major shift at the same time.

I do encourage all nonprofits to explore whether a merger could result in greater sustainability, stability, reach or other benefits for their programs. An organization’s mission and programs should always be centered, not the current leadership or staff configuration. Just know that compromise will be required and that mergers generally do not typically save money in the first few years (due to the costs of combining systems, rebranding, etc.), even if there are economies of scale over the longer term.

I also believe that most mergers are in truth acquisitions, with the larger and more powerful nonprofit influencing the resulting organizational culture and priorities more. This does not have to be the case, it is just what I have observed in practice due to power differences.

Due to funders’ fascination with this topic and desire to encourage mergers, there are a lot of good resources available to guide nonprofit mergers. It absolutely can be a strategy for greater sustainability, community visibility, and much more. Just don’t wait until you are in dire straits. Let me know if you need recommendations for appropriate resources.