I am a strategic re-structuring consultant and I love to collect stories about nonprofit mergers and partnerships. Daily I find such cases in my in-box from all over the country. Most are so run-of-the-mill they are not distinctive enough to write about in my blog. But today, I have one that is unique. It comes from Hawaii via The Maui News, June 21st. The story is that three nonprofit mental health and substance abuse agencies on the island of Maui announced a merger of their organizations—Maui Youth and Family Services (www.myfs.org), Malama Family Recovery Center, and Aloha House (www.aloha-house.org). According to Jud Cunningham, the CEO-to-be of the combined organization, the organizations are consolidating because, “it will make us stronger.”
A lot of their merger story is ordinary. Their motivations for a merger were quite typical. They wanted to improve back-office services, create seamless services for their clients, and grow their services. As with other mergers, they combined all three boards into one entity and selected Peter Cahill, the former chairman of the MYFA Board, to lead the consolidated governing structure. Then the board selected one staff leader, Jud Cunningham from Aloha House, to be the CEO.
But this merger is different in one very interesting respect: the name. In most consolidations the nonprofits would agree to choose one name for the consolidated organization. But not in this merger. The three agencies expect to operate under their individual names.
Why would they choose to do that?
I can think of two reasons. By keeping the individual names, they are sending a message to the clients and the community that the merger has not caused any changes in the programs which they, the community, have come to rely on. In fact, the merger is careful to impact administration and governance of the programs without altering the individual programs themselves. Unless they have been paying close attention to the news, most people in the community will have no idea that a merger has occurred at all. And that is ideal from a client perspective.
Another reason to for keeping separate identities is to disassociate the varying program types from each other. Clients of a family agency may not want to integrate their children into a nonprofit which provides addiction treatment services to adults. By maintaining separate identities and separate program locations, the community does not need to be concerned that the client populations will be consolidated into a single organization or location. With this, the consolidation can proceed uninterrupted in the areas where it needs to the most: administration and governance.
It will be interesting to see how this strategy of keeping the three names works in the future. If you are aware of a merger that has kept separate identities, write and let me know about how it has worked out.
Jean Butzen, a consultant with Mission Plus Strategy, specializes in mergers and alliances in the Chicago area.