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Merging could make your nonprofit twice as effective

August 10, 2016

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If your not-for-profit is struggling and other organizations provide similar services in your community, you may want to consider a merger. Teaming up with another nonprofit may enable you to pool resources, cut costs and possibly better serve your constituents.

The right choice?

A merger may be appropriate if:

  • Your organization has experienced steady declines in grants and donations,
  • Your nonprofit’s services duplicate or overlap those of another organization, or
  • You need access to a larger skill set, such as fundraising or executive leadership.

Combining forces may help both organizations involved achieve objectives faster, use funding more efficiently, provide better services and maximize capabilities.

Are you ready?

If you’re mulling a merger, think about what you really want to achieve. Develop realistic objectives stated in measurable terms, such as striving for a 25% increase in donations or expanding services into an adjacent community.

Also assess your readiness to be a partner. Consult managers, board members, advisors and even major donors to identify potential financial, legal and public relations implications of a potential merger. Generally, the best nonprofit merger candidates have stable management and a good handle on their strategic challenges. Growth-oriented nonprofits, with a history of successful risk-taking, can also make strong candidates.

What’s the next step?

There are always risks associated with a merger, including stakeholder resistance. That’s why it’s important to work with advisors experienced in handling nonprofit combinations. They can guide you through the complicated process, including due diligence, negotiations and integration, and help ensure that your merger will improve your organization’s long-term viability. For more information, contact us.

© 2016

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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