Mission + Strategy = Social Value

A Podcast on Nonprofit Mergers for your Next Board Meeting

Do you have trouble getting your board members to attend a governance training? Then here is a great solution for you. The Board Star podcasting program On Being Board is designed for busy board members.  This on-line training service provides almost 100 governance topics in 8 to 10 minute brief podcasts which are designed to be played and discussed at board meetings. The podcasts can be downloaded for free via I-Tunes so you really have no excuse not to use this service.  The podcasts are produced by The Nonprofit Management Fund, based in Milwaukee, Wisconsin headed by Pat Wyzbinski, and are funded by the Northwestern Mutual Foundation . Board Star's mission is to strengthen nonprofit boards and On Being Board is only one of their programs. Recently, yours truly was taped for broadcast on the topic of Nonprofit Strategic Re-Structuring. Take a listen here to my podcast and even better, download it for your next board meeting and discuss whether or not strategic re-structuring should be in your nonprofit's future. And while you're at it,  join Board Star and start getting their downloads via e-mail.

Poem for the First Friday of the Month

The Journey
by Mary Oliver

One day you finally knew
what you had to do, and began,
though the voices around you
kept shouting
their bad advice --
though the whole house
began to tremble
and you felt the old tug
at your ankles.
"Mend my life!"
each voice cried.
But you didn't stop.

You knew what you had to do,

though the wind pried

with its stiff fingers
at the very foundations,
though their melancholy
was terrible.
It was already late
enough, and a wild night,
and the road full of fallen
branches and stones.
But little by little,
as you left their voices behind,
the stars began to burn
through the sheets of clouds,
and there was a new voice
which you slowly
recognized as your own,
that you kept company
as you strode deeper and deeper
into the world,
determined to do
the only thing you could do --
determined to save
the only life you could save.

Chicago Tribune Article on Nonprofit Mergers - Minding Your Business: Rivals Become Collaborators to Help Clients, Save Money

The Tribune wrote a piece in the business section yesterday about some local activity about nonprofit mergers and partnerships. In case you missed it, you can go here to link to the article.  The piece mentions BOC, the Back Office Collaborative, and the Alliance to End Homelessness in Suburban Cook County. Oh, and also I get a few quotes in, as well.

An Inspiration to the Nonprofit Sector: The JCC and YMCA of Greater Toledo Area, Collaboration Prize Co-Winners!

On March 5th, the winners of The Collaboration Prize - the national competition with a cash award of $250,000 for the best nonprofit collaboration in the U.S. - were at long last announced by the Lodestar Foundation and AIM (the Arizona-Indiana-Michigan) Alliance. Appropriately, it was a tie! The blue ribbon panel of judges selected the YMCA & JCC of Greater Toledo and the Dallas Museum of Nature and Science to share first place.

One of the most unique mergers I have ever seen is the YMCA & JCC of Greater Toledo. This collaboration of one Jewish nonprofit with a Christian-based nonprofit was truly inspiring to me. I asked Abby Suckow from the United Jewish Council/JCC and Connie Torrey, from the YMCA of Greater Toledo, the current professional leaders of this collaboration effort, if they wold tell us how it came to be.

Mission Plus Strategy: How did this collaboration effort get started?

Abby: We had a long history of working together or in parallel ways. In 1999 we began by doing joint programming and membership. The YMCA expressed interest in building a new facility with a presence in Sylvania, Ohio but we already had a campus with 44 acres, a pool, and a  lot of what the YMCA was looking for in a facility. We realized there was an opportunity to work together to share what we had. We could provide them with a site and space, and enhance our services to our community; the YMCA could save the dollars and the effort from a capital campaign to build a brand new community center.

Connie: We went in steps beginning with an affiliation agreement in 1999, sharing offices, and doing joint programming. We dated, then engaged, and finally married. In January 2004, we signed the actual integraiton agreement.

Mission Plus Strategy: Can you describe your collaboration - is this a merger?

Abby: Technically, we call this an "integration," however it walks and talks like a merger. The JCC of Sylvania, Ohio (outside of Toledo, Ohio), is now a branch of the metropolitan YMCA of Toledo. We have a local board with both Jewish and non-Jewish representation and representation on corporate committees and boards of the metro YMCA board.

Mission Plus Strategy: Did the merger change who you serve?

Connie: The merger allowed each of our agencies to serve who they serve best, drawing from the strengths of each agency. The YMCA could handle all of the recreation activities, and daycare programs, where we are strong.

Abby: And because the YMCA was handling all the recreation and fitness programs, that freed us up to completely focus on Jewish community programming and increase our services from cradle to grave. We now have two synagogues on the campus where we had one before. The United Jewish Council has built a beautiful state of the art facility where the YMCA offers expanded services for children including daycare, and the Jewish Family Service has relocated to the campus.

Mission Plus Strategy: What message do you think your selection as co-winner of the Collaboraiton Prize sends to the nonprofit sector?

Abby: The message is that two faith-based organizations that are well-respected, are honest with each other, communicate openly, and trust each other, can do anything. We were very forutnate that our lay and professional leadership at the time shared all of these qualities plus the vision to see it through.

Mission Plus Strategy: What advice do you want to pass on to other nonprofits considering nonprofit mergers or partnerships?

Abby: it takes a lot of respect, camaraderie, honesty, and open communication to do this. With those things in place, you can build on that. Without the leadership of Joel Beren, former CEO of the United Jewish Council/JCC, Robert Alexander, President and CEO of the YMCA & JCC of Greater Toledo, Paul Schlatter, Chairman of the YMCA & JCC Corporate Board and the many other volunteers from both organizations, this would never have come to fruition.

Connie: With common goals, you can head down the same path. Trust is huge.

I want to congratulate YMCA and JCC of Greater Toledo for their exceptional collaboration and showing us that it's the possibilities we need to concentrate on, not the differences between us. Readers who are interested in finding out more information about this merger can go here. Look for more information about The Collaboration Prize winners to appear in my blog.

Winner of Collaboration Prize Announced: It's a Tie!

Somehow it seems appropriate that the nation's first nonprofit collaboration prize would result in a tie with the two finalists sharing the $250,000 cash prize. The Lodestar Foundation and the AIM Alliance announced yesterday that they had chosen both the YMCA and JCC of Greater Toledo, and the Museum of Nature and Science in Dallas, Texas as co-winners of the first-ever national nonprofit collaboration prize. The competition attracted 644 applications which over the course of a year were winnowed down to 30 finalists, then to eight and finally to the co-winners. A list of the 120 quarterfinalists will be available on the Lodestar web site by Mar. 9th, and a video of the awards ceremony held in Phoenix, Arizona on March 5th will also be posted on April 1st. For a link to a press release about the award go here.

I will be interviewing the winners of the award and some of the folks involved in the selection process in the coming weeks, so look for those stories here or on the Stanford Social Innovation Review web site where I also blog.

First Friday of the Month Poem

By Bertrand Russell 

Three passions have governed my life:

The longings for love, the search for knowledge,

And unbearable pity for the suffering of [humankind].

Love brings ecstasy and relieves loneliness.

In the union of love I have seen

In a mystic miniature the prefiguring vision

Of the heavens that saints and poets have imagined.

With equal passion I have sought knowledge.

I have wished to understand the hearts of [people].

I have wished to know why the stars shine.

Love and knowledge led upwards to the heavens.

But always pity brought me back to earth;

Cries of pain reverberated in my heart

Of children in famine, of victims totured

And of old people left helpless.

I long to alleviate the evil, but I cannot,

And I too suffer.

This has been my life; I found it worth living.

Adapted

Bridgespan Study Pronounces Nonprofit M&A a Strategic Tool for the Sector

The latest, most interesting study on the impact of nonprofit mergers was just published today, Feb. 26, 2009 by The Bridgespan Group, entitled, Nonprofit M&A: More Than A Tool for Tough Times. The report, written by Alexander Cortez, William Foster, and Katie Smith Milway, documents 3,300 merger deals that take place over eleven years in four states: Massachusetts, Florida, Arizona, and North Carolina. The study reaches several interesting conclusions, one of which is that it appears from the analysis of the M&A deals that certain nonprofit markets are more favorable to merger activity than other segments of the nonprofit sector, and gives the example of Child and Family Services. It's a great piece of work and will be very useful to organizations exploring M&A strategy for their own organizations. To download a full copy of the report, go here.

Chicago Panel on Strategic Re-Structuring Aims to Take the Stigma out of Consolidations

"Straight talk about nonprofit partnerships, mergers,and other types of strategic re-structuring" is what the ground-breaking panel discussion in Chicago promises on Feb. 27th, 9:30 to 11:30a.m at Roosevelt University. Go here to get all the information.

I have been asked to join a prestigious group of foundation and nonprofit leaders to talk about our personal experiences using strategic re-structuring techniques in order to expand nonprofit impact. The goal of the event, in part, is to remove the stigma around nonprofit mergers and partnerships and to get nonprofit leaders talking publicly about the benefits of using these strategies. This is a very important event to take place in Chicago, which has been somewhat slow to embrace strategic restructuring publicly as a legitimate means for growing social value among nonprofits. Kudos to the Donors Forum for taking the lead on starting the dialog!

This is not a how-to workshop but a discussion. If you are interested in learning more about the various types of strategic re-structuring methods and how they can be used to advance mission, then you might want to attend the introductory workshop I am leading at the Donors Forum on Mar. 24th, 9:00 - 12:00. Please go here to sign-up for that session. I am scheduling workshops in other venues throughout the year; if you can't attend the Donors Forum workshop, then send me an e-mail through my blog and I'll send you the most current dates that I have arranged.

The Feb. 27th Donors Forum discussion couldn't be more timely given that the economy is collapsing and nonprofit organizations are searching for ways to stabilize their organizations. I don't know where the dialog will go after Feb. 27th, but I can say that we are publicly discussing these strategies in Chicago.  Join us for this important conversation if you can.

And the Semi-Finalists Are...Lodestar Foundation Announces 8 Finalists for Collaboration Prize

This is an update to an earlier entry I wrote about The Collaboration Prize, being offered jointly by the Lodestar Foundation and the Arizona-Indiana-Michigan Alliance (AIM). This unique competition will award a cash prize of $250,000 to the best nonprofit collaboration in the country. Out of a total of 644 entries received for The Collaboration Prize,the blue ribbon selection committee narrowed the list down to the top thirty collaborations last December. Today the Lodestar Foundation and AIM announced the top eight finalists for the award, out of which the eventual winner will be chosen on Mar. 5th. The eight finalists are:

1. Cancer Vaccine Collaborative, New York, New York, cancer research collaboration promoting learning over competition

2. Chattanooga Museums Collaboration, Chattanooga, Tennessee, Administrative collabortion among The Creative Discovery Museum, The Hunter Museum of American Art, and the Tennessee Aquarium

3. Crittenton Women's Union, Boston, Massachusetts, Merger of two organizations serving low-income women

4. Museum of Nature and Science, Dallas, Texas, Merger among the Dallas Children's Museum, The Science Place, and Dallas Museum of Natural History

5. New York Law Help Consortium, New York, New York, Collaboration among legal services organizations serving at-risk new parents

6. Ready, Set, Parent, Buffalo and Lackawanna, New York, Collaboration between organizations supporting at-risk new parents

7. ShoreBank Enterprise Cascadia, Ilwaco, Washington, Merger of two community development financial institutions

8. YMCA/JCC Integration, Sylvania, Ohio, (Greater Toledo), Merger of Jewish Community Center and Young Men's Christian Association in Greater Toledo 

Congratulations to all the finalists!

Lesson from Mergers: Pursue them When Your Agency is Healthy!

In an article published in the December 2008 issue of the Chronicle of Philanthropy, the Bridgespan authors discussed their findings from research examining 3,400 nonprofit mergers which occurred over a decade.  There were some very interesting discoveries they identified, including the fact that mergers happen at about the same rate in the nonprofit sector as they do in the for profit sector.

But the one fact I want to point out today is that leaders most often cited financial distress and leadership vacancy as the two reasons they most often sought a merger. The authors make the distinction between opportunistic and strategic reasons for seeking a merger. For instance, the previous reason - financial distress - would be an opportunistic reason for seeking a merger. Opportunistic reasons often come late in the game when the organization may be seeking stability more than expansion.  Strategic reasons happen earlier in the organizational development process, before there is financial stress, actually when your organization is healthy but starting to tap out its funding, geography, skill set, etc. This is when there may be an opportunity to expand impact more efficiently by combining programs, geography, skills, assets, leadership, and opportunities between two or more nonprofits.

The authors present an excellent example of a strategic use of merger strategy in their article. Are you looking for ways to stretch the social value of nonprofit organizations? You can do so through mergers, but you need to be strategic. Think earlier in the process, not just when you are ready to leave a leadership position or when you are in financial distress. Do it when your agency is healthy! Is there a strategic merger you can identify for your nonprofit which would grow the social value you can provide to your community?