In many respects, I concur with the author’s perspective. However, for an alternative if more critical perspective, please read my article at http://bit.ly/cLX3vE in which I suggest the need to “put a lid on the call for mergers and collaboration and rather focus on remediating inherent deficiencies of the nonprofit business model.
Firstly why are there so many Not-for-Profits - it is because of idealogies of people and the approach of people to do something about what “they feel good about”, which might not be the most effective reason for providing that service. If egos and thoughts can be merged, which is the most difficult, there would be a better changes of mergers taking place.
I have seen some rather rigid stances while even working together. On the other hands, splitting is also easy, when “visions and thoughts” don’t match. It is the ease of walking away that is the dis-incentive to carry on working together.
I agree that mergers are not always the best approach to meeting the funding challenges that non-profits face, but I think the exploration of merger is what often leads to the selection of more appropriate strategic options. The important thing is that organizations openly and intelligently review their options and not rule out any of the approaches in the initial stages.
This review requires resources of time, effort and dollars to conduct due diligence and often it is this resource requirement that short- circuits the analysis. Although our M Fund is modest in comparioson the large foundations that support mergers, we decided early in its development to focus on funding pre-merger expenses with no requirement that a merger actually occur.
In the two years that the M Fund has done grantmaking for pre-merger expenses we have been surprised but not deterred by how few of the grants have lead to actual mergers. We are committed to the value of the process and the belief that an informed exploration of various options is ultimately good for all those involved - most of all the clients of the non-profits who are the reason for their existence. We often remind the participants in the merger discussions to focus on how the impact of the two organizations can be enhanced and not look at how the strategic restructuring will impact boards, staff and even donors.
Three Cheers to David for sharing his experience and reflections on mergers and most particularly for his advice to the funding community that we need to clarify the problems that mergers may (or may not be) best positioned to solve.
A few thoughts…
While anecdotes are provocative and can inspire action, we need a more systematic and objective examination of the mergers (partnerhsips and alliances) that have been fostered over the last decade (in search of savings and other ambitions). An indepth analysis with a companion of regional conversations on findings would offer promise for better understanding these tools of organizational redemption and when they are most appropriatley deployed. The collection of and reflection on data before action is always a good place to start.
One final thought: I have perhaps been around too long but nevertheless stand fearful now that we are at a high-risk moment - a moment when we may find ourselves (yet again) casting about for easy solutions that we hope will calm our spirits and growing anxieties during these challenging economic times. But what we need are not easy solutions. We need leadership.
We need leadership with a vision for the power and future of the charitable sector; a vision that gives direction and purpose to our work; a vision that expresses the values that should guide the sector’s development for coming years; but most importantly a vision that clearly and with conviction establishes the role of the charitable sector in relation to its public and private sector siblings. Together we are a family with economic and social power, purpose and opportunity. Together we make our nation great.
Has there been any work or thoughts on mergers and alliances of cultural non-profits; orchestras with operas, ballets, theater, etc…? I’m the executive director of an orchestra and it is evident to me that the Arts world in the USA is not using resources wisely to produce a more stable environment and higher quality productions. Small sized arts organizations are always struggling, we use an inordinate amount of resources on administration compared to performance. Staff is often tiny and over burdened. Mergers and Alliances seem like a good way to go. But where should we begin?
I’ve had discussions with many funders, foundations and individuals that want to see arts groups collaborating. I worked in Europe where the funding sources are heavily skewed to government, however they do use the resources much more efficiently, both providing steady work for the artists and a varied set of entertainment/cultural options for the public because the arts groups are often under one umbrella or simply one non-profit.
I would be curious to know your thoughts about Arts Non-profits n today’s (and tomorrow’s) world.
I appreciate David’s candor and thorough commentary, as well as his challenge to all entities involved. I find the rhetoric around too many nonprofits disturbing. I like the example of the homeless shelters. I will agree that there are too many nonprofits when I see community needs being over-met. Until then, there is a need for more service. Exactly how that service is provided is the key question here.
We all need to extricate the egos from the picture and remember that nonprofits are all granted that status based on charitable service designed to address pressing community needs. Those that lead nonprofits need to heed this and be critical of their own practices to determine what is the best way to meet the needs. If this involves a merger or in the extreme, closing the doors to make room for something better, then, although painful, that’s how it should go. Those that fund organizations need to hold clear expectations that they expect effectiveness and efficiency on the part of the organizations they fund with regard to meeting community need. It is not their place to say exactly how, since we all know there is never one best model.
One thing is very clear. Change of any type is most successful when generated from within. I too am interested in seeing measures of the success of foundation driven collaboration and mergers. If we look closely, I suspect we will likely see that the successes come when organizations confront their own realities and think openly about how to be more successful achieving the goals they originally set out to fulfill.
Yes, we should all challenge each other and no voice should be silenced. But neither should any voice overpower the others simply because of resources or position.
COMMENTS
BY Herb Paine
ON February 25, 2010 04:42 PM
In many respects, I concur with the author’s perspective. However, for an alternative if more critical perspective, please read my article at http://bit.ly/cLX3vE in which I suggest the need to “put a lid on the call for mergers and collaboration and rather focus on remediating inherent deficiencies of the nonprofit business model.
Herb Paine
http://www.upyournonprofit.com
BY Jenna Nicholas
ON February 26, 2010 03:41 PM
Is money really the biggest obstacle to merging? Could it perhaps be that brand and ego are the biggest obstacles to merging?
BY Patti, Generated from Facebook.com by SSIR
ON March 3, 2010 12:50 PM
When two parties share the same vision and means of satisfying or meeting that vision. The merger is simply a means of sharing resources.
BY Uday Gosain
ON March 4, 2010 07:34 PM
Firstly why are there so many Not-for-Profits - it is because of idealogies of people and the approach of people to do something about what “they feel good about”, which might not be the most effective reason for providing that service. If egos and thoughts can be merged, which is the most difficult, there would be a better changes of mergers taking place.
I have seen some rather rigid stances while even working together. On the other hands, splitting is also easy, when “visions and thoughts” don’t match. It is the ease of walking away that is the dis-incentive to carry on working together.
BY Rita Moya
ON March 5, 2010 11:53 AM
I agree that mergers are not always the best approach to meeting the funding challenges that non-profits face, but I think the exploration of merger is what often leads to the selection of more appropriate strategic options. The important thing is that organizations openly and intelligently review their options and not rule out any of the approaches in the initial stages.
This review requires resources of time, effort and dollars to conduct due diligence and often it is this resource requirement that short- circuits the analysis. Although our M Fund is modest in comparioson the large foundations that support mergers, we decided early in its development to focus on funding pre-merger expenses with no requirement that a merger actually occur.
In the two years that the M Fund has done grantmaking for pre-merger expenses we have been surprised but not deterred by how few of the grants have lead to actual mergers. We are committed to the value of the process and the belief that an informed exploration of various options is ultimately good for all those involved - most of all the clients of the non-profits who are the reason for their existence. We often remind the participants in the merger discussions to focus on how the impact of the two organizations can be enhanced and not look at how the strategic restructuring will impact boards, staff and even donors.
BY Jill Blair
ON March 9, 2010 01:15 PM
Three Cheers to David for sharing his experience and reflections on mergers and most particularly for his advice to the funding community that we need to clarify the problems that mergers may (or may not be) best positioned to solve.
A few thoughts…
While anecdotes are provocative and can inspire action, we need a more systematic and objective examination of the mergers (partnerhsips and alliances) that have been fostered over the last decade (in search of savings and other ambitions). An indepth analysis with a companion of regional conversations on findings would offer promise for better understanding these tools of organizational redemption and when they are most appropriatley deployed. The collection of and reflection on data before action is always a good place to start.
One final thought: I have perhaps been around too long but nevertheless stand fearful now that we are at a high-risk moment - a moment when we may find ourselves (yet again) casting about for easy solutions that we hope will calm our spirits and growing anxieties during these challenging economic times. But what we need are not easy solutions. We need leadership.
We need leadership with a vision for the power and future of the charitable sector; a vision that gives direction and purpose to our work; a vision that expresses the values that should guide the sector’s development for coming years; but most importantly a vision that clearly and with conviction establishes the role of the charitable sector in relation to its public and private sector siblings. Together we are a family with economic and social power, purpose and opportunity. Together we make our nation great.
BY Marc Feldman
ON March 16, 2010 05:07 PM
Has there been any work or thoughts on mergers and alliances of cultural non-profits; orchestras with operas, ballets, theater, etc…? I’m the executive director of an orchestra and it is evident to me that the Arts world in the USA is not using resources wisely to produce a more stable environment and higher quality productions. Small sized arts organizations are always struggling, we use an inordinate amount of resources on administration compared to performance. Staff is often tiny and over burdened. Mergers and Alliances seem like a good way to go. But where should we begin?
I’ve had discussions with many funders, foundations and individuals that want to see arts groups collaborating. I worked in Europe where the funding sources are heavily skewed to government, however they do use the resources much more efficiently, both providing steady work for the artists and a varied set of entertainment/cultural options for the public because the arts groups are often under one umbrella or simply one non-profit.
I would be curious to know your thoughts about Arts Non-profits n today’s (and tomorrow’s) world.
BY Justin Pollock
ON March 31, 2010 08:16 AM
I appreciate David’s candor and thorough commentary, as well as his challenge to all entities involved. I find the rhetoric around too many nonprofits disturbing. I like the example of the homeless shelters. I will agree that there are too many nonprofits when I see community needs being over-met. Until then, there is a need for more service. Exactly how that service is provided is the key question here.
We all need to extricate the egos from the picture and remember that nonprofits are all granted that status based on charitable service designed to address pressing community needs. Those that lead nonprofits need to heed this and be critical of their own practices to determine what is the best way to meet the needs. If this involves a merger or in the extreme, closing the doors to make room for something better, then, although painful, that’s how it should go. Those that fund organizations need to hold clear expectations that they expect effectiveness and efficiency on the part of the organizations they fund with regard to meeting community need. It is not their place to say exactly how, since we all know there is never one best model.
One thing is very clear. Change of any type is most successful when generated from within. I too am interested in seeing measures of the success of foundation driven collaboration and mergers. If we look closely, I suspect we will likely see that the successes come when organizations confront their own realities and think openly about how to be more successful achieving the goals they originally set out to fulfill.
Yes, we should all challenge each other and no voice should be silenced. But neither should any voice overpower the others simply because of resources or position.