Tuesday, April 28, 2009

Where is the Positive Language and Thinking around Nonprofit Restructuring?

Second in a series on Nonprofit Restructuring

There are many reasons for it, but have you noticed that many business owners, in the competitive marketplace, build their businesses with the goal of merging into another organization while nonprofits build their ‘collaboration-minded’ organizations with the goal of remaining independent?

When we hear restructure or merger, nonprofit leaders may have a gut-level response:

. Who says bigger is better?

. No one does it like we do

. We owe it to our clients/patrons/funders to continue our work, our way

. What would happen to our staff, especially our ED

. We would have to give up control

. We would lose our identity

. That would only be a last resort, if we were about to close

In many conversations over the past few weeks with foundation and nonprofit staff I am noticing that we have a severe shortage of “role models”. While there are certainly positive examples of nonprofit restructuring or combinations, they are not well-known and easily overshadowed by the more typical “Merge before we close” stories.

Though we want to believe that we can all put client and community needs above our own, that really can only take us so far. The entrepreneur walks away from the business she created with a big paycheck that can launch her next venture or move her toward early retirement. The nonprofit leader puts in extra effort with the hope that they are not eliminating their own job or that they can find another.

In the weeks and months ahead, we would love your assistance in helping us think about how we can identify and convey the positive, even personal, aspects of nonprofit organizations coming together in new and deeper ways.

Some initial thinking:

Larger size allows an Executive Director to hire experienced, professional staff in more key roles to make everyone’s efforts more productive and less stressful.

Executive Directors who have not enjoyed their roles can move into a position with narrower responsibilities. (I worked with two organizations in a merger years ago where one ED became the CFO and loved the new role.)

By adding a complementary set of services, one program becomes a primary feeder or referral source for another, decreasing client outreach costs and increasing long-term engagement.

With advanced planning, the departure/retirement of a chief executive might be a time to bring organizations together.

Research is telling us that the next generation of leaders is looking for new, shared leadership structures – perhaps the kind that could form when you bring multiple organizations together.

All-Star Board – Many boards have a handful of people who do much of the work. Is there an opportunity to bring together some of the best practices and people from two or more organizations?

Hope you’ll add to the conversation on our Blog.


Tuesday, April 14, 2009

When people say “More Nonprofits Should Merge”, what do they really mean?

First in a series on Nonprofit Restructuring

It seems that the pressure is on from all directions for nonprofits to “merge”. Foundations are talking about it, business leaders are talking about it, economic circumstances are predicted to necessitate it.

We opened our Human Service breakout session at the March 16 Nonprofit Town Hall in Indy with the question: “What are the positive outcomes people are looking for when they say we need more collaborations and mergers?” I asked that question because I see too many people getting caught up in the means and forgetting the ends. By that, I am not saying collaborations and mergers are bad, but they are possible strategies toward accomplishment of some desirable outcome, not the outcome itself.

Some thoughts from our group on what we mean when we say “we need more collaborations and mergers” included:


Organizations with shared goals and plans

Provision of multiple services at neighborhood sites

Referrals/trust between providers

Shared programs

Variety in service options

Effective use of resources (people, dollars, volunteers, etc.)

Increased reach and impact

Creative solutions


Organizations pursuing funding from area foundations

Duplications in the provision of services

I suggest that our conversations be focused on how we can best accomplish the above and consider all of the alternative ways to get there. Hope you’ll add to the conversation on our Blog.

Tuesday, April 7, 2009

Preliminary Survey Results

We have already had almost 200 organizational responses to our local (Indy and Cincy) nonprofit Surveys “How are you Doing?” distributed on Monday morning. Many of the results are what we would expect - about 60% of respondents are Executive Directors/CEOs of their organizations and there is a good mix of organizations from small to very large and across most sectors. It looks like there were not many staff pay raises this year, that a sizable majority of respondents have more than 3 months financial reserves as of the first of April, and are using a wide range of strategies to sustain their work.