(Illustrations by iStock/vectortatu)
In 2023, Resolution Project and Enactus began exploring the prospect of merging our organizations. The goal was to scale our impact without rebuilding existing infrastructure: Resolution Project had developed a proven fellowship model supporting young social entrepreneurs, while Enactus had built a powerful international network and comprehensive education programs.
We knew the path wouldn’t be simple, and it hasn’t been. But while others have argued that the nonprofit sector should consider mergers and acquisitions (M&A) as “not just an escape plan,” our experience demonstrates that perhaps we should go even farther than that. Mergers and acquisitions should be normalized as a strategic tool for mission-driven organizations.
Our Experience
Our experience with merging exemplifies how nonprofit M&A can dramatically accelerate impact through network expansion. By strategically integrating our organizations, we gained access to an international network that Enactus had built over 50 years of painstaking work, achieving in just a few years what would have required a decade or more (and millions of dollars) to develop independently. We expanded our country network from three countries to 35 across six continents, creating unprecedented opportunities for young social entrepreneurs to connect globally.
Our merger demonstrated significant resource optimization while amplifying impact. We reduced our combined annual budget from $11-13 million to $6-7 million but strategically reinvested these savings to enhance program quality and reach. Resolution Project had previously supported 700 young social entrepreneurs, but our integration with Enactus expanded our joint impact to reach over 40,000 young social entrepreneurs annually across nearly 100 countries. This expanded reach is facilitated through Enactus’ 35 independent country offices, which receive guidance, network connectivity, and shared services at the global level.
Unlike private sector mergers where financial returns serve as the primary metric, our social sector M&A required deep mission alignment as its foundation. This alignment enabled us to preserve and amplify the best elements of both organizations’ approaches. Resolution’s intensive fellowship model, which provides seed funding and mentorship, now integrates with Enactus’s established educational programming and international competition framework. This integration will be showcased at our 2025 USA Expo in Kansas City, where Resolution’s social venture challenge model will be incorporated into Enactus’s competition structure, creating a more comprehensive support system for young social entrepreneurs.
Where the Social Sector Stands on M&A
While mergers and acquisitions have long been a significant tool for growth in the private sector, the social sector has been much more hesitant. Some of the reasons might be deeply embedded in our sector’s culture, from a tendency to lionize founders and treat individual visions as sacrosanct to our collective fascination with unicorn stories, the rare organizations that achieve massive scale independently. Perhaps we’ve convinced ourselves that the market forces driving private sector consolidation somehow don’t apply to mission-driven organizations. and it is true that the social sector faces unique challenges. Substantial resources are often required: as George and Taren Stinebrickner-Kauffman note, for example, the Guidestar merger with Foundation Center cost $45 million. Not all mergers require such significant investment, but since nonprofits can’t bank profits for future investment—and social enterprises often struggle to maintain margins that would support rapid growth—this leaves us primarily dependent on fundraising campaigns and specific investable moments as vehicles for scaling.
As a result, unless an organization becomes an industry darling, growth typically involves a long and resource-intensive journey. And yet, given the interconnected nature of our sector, it’s increasingly likely that an aligned partner has already built what you need (if in a different geography or with a slightly different approach). While integration will always present challenges, the time saved compared to building something from scratch can be tremendous.
Addressing Challenges
The Human Element! The most significant challenge in our merger was managing deep emotional connections across a complex web of stakeholders. Unlike private sector mergers where staff concerns can usually be addressed through compensation packages, nonprofit mergers require navigating the anxieties and attachments of beneficiaries, partners, and community members, usually without financial incentives to ease the transition. Beneficiaries worry about their community, partner organizations question the future of long-standing relationships, and staff members often face the prospect of job changes without golden (or even brass) parachutes. This creates a unique emotional and ethical burden that traditional M&A playbooks fail to address.
To overcome these human challenges, we focused on normalizing the merger concept and helping stakeholders envision benefits on the other side. We acknowledged founder pride as a natural consideration and expanded our board temporarily to include members from both organizations, recognizing that board memberships have natural life cycles and that tapping into talents across both organizations helped them mesh more effectively.
Resource constraints require creative solutions. While private sector M&A often has dedicated teams and substantial budgets, our nonprofit merger faced significant resource limitations. Many funders are unfamiliar with how to price and support these transitions, while quality legal guidance—which is essential for navigating the complex nonprofit merger landscape—remains expensive. We had to find creative ways to fund both the immediate transaction and the crucial post-merger integration period, all while maintaining regular operations with teams that were already stretched thin.
Effectively communicating the exponential increase in impact and value for money that our M&A would create helped with crucial funder conversations. We needed to raise over $2 million in a week to consummate the transaction. Geraldine Acuña-Sunshine and Gabe Sunshine made a significant multi-year commitment with an almost immediate disbursement of cash, while several Enactus funders made forward commitments (most, but not all, of which have been honored). We also received support from the Seachange-Lodestar Fund for Nonprofit Collaboration, a rare donor committed to supporting the operational side of nonprofit M&A efforts. Our experience taught us to anticipate numerous extra costs. We learned that funders need to be comfortable making unrestricted gifts because they believe in the mission, recognizing they’re gaining near- to mid-term efficiencies with this type of up-front investment.
Integration deserves more attention than the transaction. The signing of merger documents marks the beginning, not the end, of the real work and post-merger integration contains more unknowns and greater complexity than the transaction itself, requiring sustained investment in change management and stakeholder engagement. Twelve months into our integration process, we still have work to do in every department of our newly integrated organization: from finances to branding, programs to legal. Organizations must balance the immediate pressure to demonstrate efficiency gains with the longer-term work of cultural integration and program alignment. Underinvestment in these efforts can undermine even the most strategically sound merger.
Deloitte contributed a pro bono, seven-week, strategic integration project that was key to setting us up for successful integration. Consultants often get excited about nonprofit M&A work and may be thrilled to engage on a pro bono basis, especially as they regularly do advisory work on private sector M&A but don’t often get to apply these skills with nonprofits. That said, if you cannot secure pro bono support, it is still an important expense to undertake at a financially appropriate level. Equally important was setting clear expectations with our team about the degree of flexibility and uncertainty that exists around decisions yet to be made.
Moving Forward
The social sector must move beyond viewing M&A as a last resort for struggling organizations. Instead, we should recognize it as a proactive strategy for achieving greater impact more efficiently. This shift requires changes in both mindset and practice:
- Funders need to develop specific funding streams for nonprofit M&A, including support for due diligence and integration costs. These funds need to be deployable quickly.
- Sector leaders should openly share M&A experiences and best practices, helping to normalize these discussions.
- Board members with private-sector M&A experience should be actively engaged in exploring these opportunities.
- Organizations should develop clear criteria for potential partnerships, focusing on mission alignment and complementary capabilities.
The challenges facing our world are too urgent for us to ignore any tool that could help us achieve greater impact more quickly. M&A in the social sector is a legitimate and powerful tool for scaling and deserves to be embraced as such.
Read more stories by George Tsiatis.