Nonprofit Mergers & Collaboration – Best Thing Ever? Or the Swan Song of a Dream?

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I’m going to say the quiet part out loud: Collaboration is one of my personal favorite topics! But what about a merger? Do we need 561 501c3 Nonprofits in a County of 270,000 people?  Is there a better way to bringing leadership, funding, volunteers, missions together to work on important issues and action? ~ Rose Filicetti, ED of Nonprofit Connection SCC  – an article by by Trudy Harris for Blue Avocado, on January 17, 2023

Article In Brief:

  • The Problem: The Problem: Nonprofits can become so siloed in what we’re doing that we lose sight of the bigger opportunity that can come from combining resources, talent, intelligence, education, and experience with others.
  • The Context: The benefit that comes from collaboration is widely appreciated in the nonprofit sector. However, nonprofit founders and executives, unlike their for-profit counterparts, don’t readily consider combining organizations as a valid strategic business decision.
  • The Solution: The author shares her experience merging her nonprofit with another and provides concrete steps nonprofit EDs and boards can use in their decision-making process.

For nonprofits, collaboration has been a bit of a buzzword as of late.

But when we think of collaboration, many different things might come to mind. Perhaps we think of simply working together, both within and outside of our organizations. Maybe we think of pooling resources, especially the oft-touted mantra of time, talent, and treasure. Maybe we also think of sharing the burden, co-directing so that no one person must be fully responsible for all leadership. Maybe we think of the bigger splashier media that this can generate—we’re twice as big now; look at how many more things we are doing! Collaboration might lead to any number of pros (and cons), especially for nonprofits.

So, let’s talk about mergers. We are all familiar with the banking industry and how the bigger banks swallow up the smaller ones. It happens all the time and is an accepted process. Many smaller banks will even work towards certain goals that make them desirable to purchase, providing the best-case scenarios for the sale. It’s what the board of directors and shareholders strive for, sometimes for years, to make the maximum gain in the company’s eventual sale.

But there is a different mindset for those who start a social need nonprofit. We are passionate warriors and champions who have often been fighting the good fight for many years. Now, we might be looking to have a stronger voice to continue our campaign, especially given the setbacks many of our organizations and our people have dealt with from COVID and the pandemic.

Wait… A Nonprofit Merger?

No nonprofit opens its doors with the idea of being absorbed (or bought out) by a bigger organization in 5, 10, or even 15 years. I would venture to say that almost all nonprofits are started because of their leaders’ dreams, passions, and willingness to give their all to create organizations that work towards world betterment—or at least saves their little portion of the world. And that is the way it should be.

So why would one nonprofit want to merge into a deep collaborative relationship with another organization? Is it a death knoll for the founders? Is it a sign of weakness? Perhaps it is a show of clashing wills between two camps—ED vs. staff or maybe board vs. ED.

But what if it’s none of the above? What if it is a realization that together, we are stronger? Maybe it is an epiphany moment where one nonprofit leader says, “Wait! We are doing the same basic service. Why not work together, share the expenses, challenges, strategic planning, and successes?”

Collaboration All the Way Down

My original nonprofit, Team Giving, was co-founded by myself and a good friend in 2016. We had no idea how it would go, although we hoped and prayed our idea to serve the nonprofit community would be a success. Our business model that matched other nonprofits with volunteers was fresh and innovative, so we hoped it would catch on.

Well, catch on it did. By 2018, we had thousands of volunteer hours coordinated and hundreds of community connections. We were truly making social change happen, and we had a place in our region that enabled us to make positive impact in our communities. Fast forward 4 years: COVID takes over our lives and leaves us all pondering how to move forward.

Things felt especially uncertain when my co-founder announced she was leaving the organization. I was rattled. Although I knew I had the passion and heart to continue our organization, I didn’t know if I had the bandwidth.

However, I had the good fortune to be connected to a good friend and amazing mentor. After I knew my partner was leaving, I reached out to my mentor. During our conversation, I said something to the effect of “Let’s play together.” The response was enthusiastic, and from there it was a matter of ironing out what working together would actually look like.

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Nonprofit Connection Santa Cruz County is a 501(c)3 corporation, Federal Tax ID# 87-2130376

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