Mission + Strategy = Social Value

New Strategic Re-Structuring Training Coming: An expanded four-hour session on nonprofit strategic re-structuring - at the Donors Forum, Tues., Jan. 26th, 8:30 to 12:30. To sign-up go to: https://s07.123signup.com/servlet/SignUp?PG=1532164182300&P=153216400 .

News Round-Up: Merger Stories from around the Nation: Fall 2009

Here are the stories on nonprofit mergers that made it into my Google in-box over the fall. I don't include stories about hospital mergers, (almost) no blog postings, and no links to marketing materials. I look for journalistic sources. Enjoy!

Phoenix, AZ, 9/2009 - Two Valley Agencies Come Together to Move Families from Homelessness Straight up the Ladder into Permanent Housing, source: Marketwire. Arizona's largest shelter for homeless families, UMOM New Day Centers, has merged with Helping Hands Housing Services.

Washington, D.C., 9/2009 - National Recycling Coalition Shuts its Doors, source: Earth911.com. After a failed attempt to merge with Keep America Beautiful, NRC announced Sept. 4, 2009 that it was closing operations.

Lebanon, Ohio, 9/4/2009 - Warren County United Way quits merger talks, JournalNews. The Warren County United Way elected to end merger discussions with two other local United Way agencies serving Butler County and Greater Cincinnati, ending the goal to create  a regional United Way office.

Norwich, CN, 9/13/2009 - Connecticut Red Cross merger cuts costs, NorwichBulletin.com. Seven Red Cross chapters have dissolved to form a single "Connecticut Red Cross Chapter," for the state of Connecticut, serving 3 million people and 147 towns.

Norwalk, CN, 9/13/2009 - Local United Ways join forces, head in new direction, The Hour online. Three United Way agencies have merged to form the United Way of Coastal Fairfield County.

Loveland, CO, 9/13/2009 - Single organization will run 24-hour shelter services from multiple locations, reporterherald.com. The day and night inclement weather shelters in Loveland will merge into a single entity.

Colusa County, CA, 9/22/2009 - Colusa Chamber to Merge, Sun Herald.com. The Colusa County Chamber of Commerce, Colusa County Economic Development Corporation, and the Colusa County Business and Visitors Center announced they will be merging. 

Juneau, AK, 9/27/2009 - Councils coming together, Juneau Empire.com. Alaska's two Girl Scout councils are merging to form the Girl Scouts of Alaska Council, as part of a national consolidation trend. 

Oklahoma City, OK, 10/1/2009 - Charity Inc.: Joining forces for a stronger sector, The Journal Record. A guest opinion by a nonprofit executive leader on the benefits of nonprofit mergers.

Cambridge, MA, 10/6/2009 - The Guidance Center Announces Merger with Riverside Community Care to Strengthen Child and Family Services in Massachusetts, PR Newswire. Just what the title says.

Fort Dodge, Iowa, 10/6/2009 - Northwoods Living to merge with Clear Lake agency, The Messenger. A merger of two behavioral health nonprofits serving people with disabilities announced they would merge.

San Francisco, CA, 10/12/2009 - Grassroots Science, San Francisco Chronicle. This is a blog  by Marina Park, who discusses the merger of five Girl Scout councils which became the Girl Scout Council of Northern California, which she leads today.

Hartford, CN, 10/19/2009 - Third of Region's Nonprofits May Close, Hartford Business.com. An article detailing the results of a survey of 1,900 nonprofit organizations in central and northeastern Connecticut. "About 25% of the nonprofits said they considered a merger during the last 12 months, up from 21% the year earlier."

Atlanta, GA, 10/19/2009 - Nonprofits budgets down, need up, Atlanta Journal Constitution. An article detailing the financial losses the local nonprofit sector is experiencing. "Mergers are still a popular possibility for nonprofits in the region," Lauren Welsh, VP, Community Foundation for Greater Atlanta.

Boulder, CO, 10/18/2009 - Access Counseling closes Boulder, Longmont offices, DailyCamera. A story about a nonprofit agency providing low-income counseling, in financial difficulty, but preparing for a merger with the local YWCA.

Cape Code, MA, 10/28/09 - Musical Groups May Joint Forces, Cape Code Times. The Cape Cod Symphony orchestra and the Cape Cod Conservatory are contemplating a merger.

Princeton, NJ, 10/27/2009 - Princeton Borough, Township back plan to study merger, Central Jersey and Mercer County News. Did you know there are two Princetons? The borough and the township governing bodies are studying the concept of merging.

Charlotte, NC, 10/28/2009 - Initiative seeks to reinvent charities, charlotteobservor.com. A story about the effort by the Foundation for the Carolinas to launch the $5M Community Catalyst Fund, to aid struggling nonprofits. The fund will finance new nonprofit business strategies, including mergers and partnerships.

Columbus, OH, 10/30/2009 - CATCO, Phoenix, join forces, The Columbus Dispatch.com. Two theatre companies, Contemporary American Theatre Company, and the Phoenix Theatre for Children, announce they will merge.

San Diego, CA, 10/29/2009 - Two county humane societies merge, Signon San Diego. The San Diego Humane Society and the North County Humane Society announce they will merge.

Federal Bailout Spending Creates Re-Structuring Opportunities

I recently learned about an interesting example of a government-led collaboration effort focusing on the American Recovery and Reinvestment Act, more commonly known as the federal bailout. The process of determining how to spend bail out dollars in metropolitan Chicago is is being led by the Chicago Metropolitan Agency for Planning, or CMAP, the official regional planning body for northern Illinois. Recently I heard a presentation by Randall Blankenhorn who made a perfect argument for how it's critical, particularly when presented with such tremendous resources - $14billion for this part of the state - to use the funds to restructure the delivery of services in the region.

Mr. Blankenhorn explained that as early as November 2008, in the very early days of the discussion of a federal bailout bill, CMAP's board approved a set of principles for how the funds should be spent in northern Illinois. One of these principles is: The investments should be partnered for real reform. To prioritize local infrastructure investments that in a comprehensive way look beyond transportation benefits to include land use, economic, environmental, social, and other impacts. In other words, all of these issues are intertwined; so let's weave the strategies together to create comprehensive solutions and leverage the impact of the investment to reposition the region and its services for the future.

To accomplish its goals, CMAP is partnering with foundations, nonprofit organizations, and local government agencies throughout the region in a coordinated, accountable fashion. We are fortunate to have CMAP leading this process for investment of our American Recovery act funds. With all of the negative publicity about the American Recovery Act, it's nice to see a regional planning authority doing a good job with dispersing the funds. Do you have examples of good government collaboration you would like to share? Post a comment with your own example.

My clients the Badger Association of the Blind & Visually Impaired, and the Center for Blind & Visually Impaired Children just voted to merge this week. Congratulations to them both!

Nonprofit Mergers: New Donor Quality Metric? No. Carolina Story May Indicate So

A very interesting story popped up in my Google search engine dated Sept. 28, 2009 from the Charlotte Observer. A county commission of very prestigious government and foundation institutions including the United Way of Central Carolinas and the Foundation for the Carolinas, have formed to identify strategies for addressing the funding losses for the  Charlotte-Mecklenberg community. There simply isn't enough money to support the same number of nonprofits today as there was in the past; one estimate is that funding is down $171M for nonprofits. The most popular suggestion from Charlotte residents and commission members is for nonprofits to merge; "There are absolutely too many nonprofits in Charlotte," says Jennifer Roberts who chairs the commission. With area unemployment at 12%, local experts expect donations to continue to decline. "Given where we are in our community, and where we are in our society, it does make sense for the nonprofit sector to look at ways it can restructure itself, County Manager Harry Jones says. "As a donor, I'm going to want to know that an agency I'm giving money to is not duplicating." Is this the beginning of donors looking for evidence of collaboration strategy in a nonprofit's portfolio as a quality metric? Will the evidence of multiple nonprofits doing the same kinds of work in the same community turn off donors and make them feel like it's a duplication of effort? Time will tell.

News Round-Up on Nonprofit Strategic Re-Structuring from Summer 2009

Here are the news and other stories about nonprofit collaborations, mostly mergers, that I pulled off the Internet from all over the country.

Merging Administrative Functions, posted on the site: Butts in the Seats, Musings on Practical Solutions for Arts Organizations, July 21, 2009. The posting links four separate articles written by the Nonprofit Law Blog related to back office collaborations. You may have seen these postings elsewhere, they are very good.

Goodwill Merger Art for our sake at the Kimmel Center tonight, Philadelphia City Paper, July 23, 2009. Article about a joint fundraising event to celebrate a new merger between Centro Nuevo Creacion and Lutheran Settlement House.

Charlotte Shelters to Merge, WFAE 90.7FM, story aired July 24, 2009. Radio story text regarding two shelters, Uptown Men's Shelter and Emergency Winter Shelter which are merging after operating separately for 20 years. A move even the shelter clients say makes perfect sense.

OPINION: Putting Clients over turf is bold first step, The Charlotte Observer - McClatchey Tribune Information Services, July 26, 2009. An article about the merger of two shelters in Charlotte, NC.

To Respond to Downturn, Two Museums Join Forces, New York Times, July 24, 2009. The story describes the impact of the economy on arts organizations and strategies they are devising to deliver programming including 6 New York museums which have formed an alliance to allow any of their members to have visiting privileges for all of their establishments.

Pending merger could trigger another blood bank war, Orlando Sentinel, July 29, 2009. An article discussing the impact of a potential merger between two blood banks and its potential to create a "blood war," in the market.

Merger with Arts Group Will Preserve Ticket Subsidy Program, New York Times, July 31, 2009. Article about the merger of two arts organizations in NYC: Arts Connection and High 5 Tickets to the Arts.

Group faces big change, goerie.com, Erie Times News, Aug. 2, 2009. Two refugee relief organizations, The International Institute of Erie is merging with its national affiliate the U.S. Committee for Refugees and Immigrants, based in Arlington, Va.

Youth Villages, Georgia-based Inner Harbour to merge, Memphis Business Journal, Aug. 3, 2009. Two Georgia-based nonprofits providing residential and social services announced their decision to merge by the end of 2009.

Dayton United Way rejects Cincy merger, Business Courier, Aug. 4, 2009. The United Way of Greater Dayton rejected the opportunity to merge with the United Way of Greater Cincinnati and the United Fund of Dearborn and Ohio counties in southeastern Indiana.

Nonprofits and Corporate Counsel partner in Merger Success, The Metropolitan Corporate Counsel, Aug. 5, 2009. An article about free legal services from a nonprofit called Pro Bono Partnership, based in the states of Connecticut, New Jersey, and New York, which assisted with nonprofit merger transactional services.

County Habitat moves to Baltimore, The Capital Hometown Annapolis.com. Two Maryland Habitat chapters, Arundel Habitat for Humanity and Chesapeake Habitat for Humanity merged on July 1st.

New North American recycling group forming, PlasticsNews.com, Aug. 4, 2009. An article describing the creation of a new national recycling coalition, RONA, created in reaction to the merger of the National Recycling Coalition and Keep America Beautiful.

New Recycling Org. Launches, Kab/NRC Merger Pending, Earth911.com, Aug. 6, 2009. An article on the launch of a new, national recycling coalition in reaction to the decision by Keep America Beautiful and the National Recycling Coalition to merge.

Lending Merger is Sensible, My SA Business, Aug. 15, 2009. An article discussing the merger of three small, community lending institutions in San Antonio, Texas.

Merger aims for 'friendlier' housing plan, The Salem News, Aug. 15, 2009. Two local housing organizations have decided to merge to maximize their development capacity in Salem, MA.

Finances prodding nonprofit mergers, Mankato Free Press.com, Aug. 18, 2009. An article about three nonprofit women leaders involved in promoting mergers in the sector.

Boys and Girls Town part of merger, News-Leader.com, Springfield, Missouri, Aug. 28, 2009. The Springfield Boys and Girls Town of Missouri has announced a merger with another youth agency.

Crain's Chicago Business: Nonprofit Mergers - Not Happening That Much

The topic of nonprofit mergers, and whether or not they are happening to the degree they have predicted in the sector, was discussed in an article in Crain's Chicago Business in the Aug. 24th issue. Yours truly weighed in saying "not so much," which is what it feels like. That unscientific response is more or less corroborated by the demand for collaboration dollars at the Chicago Community Trust, our local community foundation which provides much of the philanthropic support for nonprofit mergers in our sector, and also, a survey by the Nonprofit Finance Fund found that only 5% of the respondents said that they planned to seek a merger, or already had merged with another nonprofit. The reporter got a couple things wrong in my quotes. First, I believe one of the problems with nonprofits seeking mergers and collaborations is the lack of knowledge about collaborations; one way to address this is to create dedicated funding sources that can help educate grantees and walk them through the process of becoming familiar with the strategies. In communities where such dedicated grant programs exist, there is more collaboration activity going on. Second, I don't believe we should wipe out the entire nonprofit sector; but given the opportunity to think creatively in our current circumstances, we might do things differently, including not maintain the status quo. If you'd like to read the article, go here.

How to Legally Dissolve a Nonprofit

Occasionally I get a phone call from people wondering what the process is for shutting down a nonprofit. Believe it or not, there are forms you need to fill out with the IRS and your state to dissolve a nonprofit organization. I recently ran across a great blog posting by by someone named Don Griesman, who wrote a detailed explanation about what you have to do when ending the operations of a nonprofit organization or foundation in all the various situations: mergers, transferring assets, or simply shutting the door. Don also provides hyper links to IRS forms and sites that you might need to refer to for dissolving a nonprofit. Go here for the posting.

"Round-Up of the Week's News on Nonprofit Collaborations"

At the suggestion of a fellow blogger and friend, Celeste Wroblewski at studio 501c, I am going to add a new feature to my site: a news round-up. Every day google alert sends me news stories about nonprofit mergers, partnerships, and all things related to nonprofit strategic re-structuring. I have far more material than I have the space (or time) to write about. So instead of trashing the stories, I am going to send you the links to the more interesting alerts and let you decide which ones to read. I will still post blog entries about the evens I find interesting, too. If you like, let me know what you think of this new feature by sending me a comment. Also, let me know if you found a story particularly interesting, and I'll check it out. Happy reading!

"Thinking like Businesses," by Hartfordbusiness.com, an editorial supporting the decision by some nonprofits to start considering mergers. An overview of some notable examples in the state of Connecticut.

"Anxiety on the rise at area's nonprofits," by Warren Wolfe, StarTribune.com, Minneapolis-St. Paul, MN. An overview of merger activity in the Minneapolis-St. Paul area due to the decline in finances for nonprofits.

"Area nonprofits feel urge to merge," by Laura Crimaldi, BostonHerald.com. An article covering a report by the Boston Foundation detailing the financial woes of the Boston nonprofit sector and their efforts to get organizations to consider mergers.

"Nonprofit Mergers: Putting the Best Foot Forward," by Scott Russell at the Minn.Post.com; an overview of Minnesota mergers and one merger in particular between COMPAS and Young Audiences of Minnesota. The article goes on to talk about a free publication on mergers, among other things interesting.

"Merge Ahead," by Bruce Boyd, On Philanthropy. A balanced opinion piece about nonprofit mergers by a consultant in the field, which begins by citing a recent study by the Nonprofit Finance Fund on nonprofit collaboration activity.

"Social services agencies ACHIEVA and Arc of Westmoreland County merge," by Kris B. Mamula, Pittsburgh Business Times. An article covering the decision by two notable social service agencies in the Pittsburgh, Pennslyvania community, to merge.

"Nonprofits Forced to Think Differently," by the Seacoastonline.com. An editorial lauding the decision by two Northampton-based nonprofit organizations to merge: Seacoast Visiting Nurse Association and the Massachusetts-based Home Health VNA.

"Literacy Nonprofits Merge" by Pam Allen, The Business Review (Albany). An article about two nonprofit literacy organizations in new York state which decided to merge: Literacy Volunteers of America/Mohawk/Hudson and Literacy NENY.

"A Merger that will Assist the Area's Jobless," by the News & Advance, Lynchberg, Va. An opinion piece supporting the potential merger of two nonprofit organizations providing services to unemployed individuals in Central Virginia: New Lands Jobs and Lynchberg Community Action Group.

Learning from the Nonprofit Merger Trail Blazers: An Interview with Debbie Hinde, CEO of Vital Bridges

As I introduce people to the concept of nonprofit mergers and collaborations, it's hard to remember that for some people, these concepts have been around a long time. Take Debbie Hinde and Vital Bridges in Chicago, Illinois, for example. I recently was re-introduced to Debbie when she was part of a group of HIV/AIDS social service agencies meeting to hear a presentation from me at the AIDS Foundation of Chicago about strategic re-structuring. Debbie could have given the talk and in fact, I asked her at one point in the training to tell her story.

It was 2002 and the AIDS service sector in Chicago was greatly fragmented with over 200 nonprofit agencies, a great many of whom were providing one or two services to a small clientele who were then forced to go from organization to organization to get all their needs met. Many of these small nonprofits, each with their own overhead operations, were financially unstable and inefficient. At the same time, the funding environment for AIDS services had changed dramatically due to the downturn in the economy at that time and shrinking private dollars due to the perception that the disease was now a manageable problem.

Due to these conditions, three HIV/AIDS service organizations decided to merge together: Open Hand Chicago (the organization Debbie was leading at the time); Community Response, Inc.; and the HIV Coalition, Inc., or HIVCO. The goals of the merger were twofold: to expand and enhance client services; and to build financial strength and stability for one nonprofit. The result became Vital Bridges, the combined entity with a budge tof $4.6M, serving a clientele of 2,400 people in metro Chicago living with HIV and AIDS.

Vital Bridges has gone on to improve services to their clients including expanding the availability of fresh fruit and meat throughout their distirbution area, launching 32 units of permanent and transitional housing, and adding mental health therapy to their portfolio of services. Case Managers are now available to clients in a one-stop-shop format in their grocery center sites when people pick up food. And there is now one lean, efficient, financially strong administration running what was once three separate nonprofit agencies.

The Bridgespan study on nonprofit mergers, M&A: Not Just aTool for Tough Times, makes the point that the rate of nonprofit mergers is roughly the same (1.5%) as it is for the for-profit sector (1.7%). People are shocked to learn the nonprofit rate is a shigh as the for-profit sector. That's because a lot of small to medium-size nonprofit organizations are very quietly merging without a lot of fanfare, but with great effect. Vital Bridges is one example of the quiet leaders in the nonprofit sector which some time ago started using strategic re-structuring tools to expand mission for their clients. And seven years later, this merger is still having impact today.