As the Sear?s commercial says, I hope you have an umbrella, because it?s raining cold hard facts here.
Earlier this month, the Nonprofit Quarterly had an article about the growing business of helping nonprofit organizations merge.
Merging a nonprofit is harder than merging a commercial enterprise. And the reason for this is what a call the ?competing bottom line of nonprofit organizations.? In a commercial venture, if the business fails to turn a profit, it doesn?t take long for changes to happen. And one of the potential solutions of a business to survive is to find another company to merge with another company.
In the nonprofit world, profit isn?t a key metric. Achieving the organization?s mission is the bottom line. Unfortunately, for many nonprofit organizations it?s really hard to empirically measure whether an organization is achieving its mission. We?ve all heard the ?if we change one life our organization is successful.? That may be true, but at what cost?
As I stated in my series on the Nonprofit Shake-out, one of the things we are going to see more and more of is nonprofit organizations merging for survival.
In this new series of blogs, I am going to post the questions a nonprofit organization should consider to help it discern whether merging with another nonprofit is a good idea.
One common truth in all mergers is that it is better to be the acquirer rather than the acquired. So there are different questions depending which side of the merger fence you happen to be on. My questions are going to focus on those discerning on whether they should be acquired.
Acquiring another nonprofit can be an attractive way to add donors. However, being acquired places the organization in a position of weakness. Let?s face it. The main attraction to merging two organizations is consolidating the expenses. That means jobs.
So the very first thing you have to ask yourself is this very difficult question: Is the survival of your organization?s mission more important than your job? Because if you are going to be acquired, it will likely mean you will find yourself being laid off.
If you answer no ? then you should avoid merging with another nonprofit. However, if you answer yes, then you should move onto the next question.
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