What do you say to a nonprofit leader who can’t let go of their brand? “I’m not on Earth to build Pillsbury United.” I couldn’t have said it better, Tony Wagner, long-time executive director of Pillsbury United. Tony is a founding member of a unique collaboration of five human service agencies which formed the Metropolitan Alliance of Connected Communities or MACC Commonwealth, on Jan. 1, 2006, a consolidated service organization. Tony and four of his colleagues realized that they needed to put their clients – and not their brands – first. Their organizations were not as efficient individually as they could be together. So they joined forces.
They call themselves a hybrid operation, but to me, they’re what strategic restructuring experts call a “management service organization.” MSOs are hot right now because they might lower operating costs for individual nonprofits and guarantee each organization’s independence. You could gain the benefits of a merger without losing your autonomy.
The five organizations in MACC, whose combined budgets total $35M, jointly provide administrative functions such as accounting, office technology, and human resources. Their goal is to operate more efficiently and to share best practices to benefit their clients. Yet they still maintain their independent identities, governance structures, and programs.
Initially, the group started out small, with three nonprofits; later two more joined the group. Today, there are seven members of the collaborative. All five of the founding members were human service agencies focused on self-sufficiency programs for families and communities experiencing similar government and philanthropic budget cuts. That kind of mission and operational alignment created synergies for the collaboration and eased the collaboration process quite a bit.
The results show that the collaboration is meeting its goals. At the end of 2007 – after just one year of operation - the MACC Commonwealth agencies reported that their members served 1,000 additional clients and saved their members $200,000 in annual costs. These are impressive results.
The MACC Commonwealth has been so successful, in fact, that it has drawn notable attention including a paper published by the Humphrey Institute that won first place at a national conference on nonprofit best practices.
Tough times call for new thinking. Tony Wagner said it best, in an article in the Minneapolis-St.Paul Star Tribune: “Our primary purpose is to serve people, to serve communities.” Right you are, Tony.
Jean Butzen, Mission Plus Strategy consulting, specializes in mergers and alliances in the Chicago area.