So You’re Nonprofit, Struggling, Thinking of Merging? Er, Maybe Not.



Through the daily email from the Chronicle of Philanthropy (and if you don’t receive it, you should — it’s invaluable), I learned about a recent op-ed piece in the San Francisco Chronicle written by Emmett D. Carson, CEO and president of Silicon Valley Community Foundation in the Bay Area. Given the heightened jargon that sometimes flows from the pens of top nonprofit executives, this particular piece is really quite straightforward. In essence, if you’re a nonprofit organization and you’ve knocked down or nearly flattened by this economy and you’re starting to think, Gee, maybe I could merge with other weakened nonprofits with similar missions so that united we could be one strong nonprofit, it seems the devil is in the details:

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….Mergers are expensive and disruptive. It takes money to consider how to integrate services, staff and systems, and time to think through the merits of such a strategy. Unfortunately, both are in short supply.

Even more challenging is the fact that merging organizational cultures is a delicate, complicated exercise under ideal conditions, and even harder when leaders are faced with the urgency of responding to burgeoning community needs.

Mergers require enormous amounts of energy from the boards and senior management of both organizations, which can distract them from focusing on their core work.

Mergers introduce uncertainty to employees who understandably worry about the security of their own jobs.

Mergers also challenge donors and supporters of each organization who begin to question whether they will lose their identity and traditions in the transition. Such concerns inevitably lead to short-term service disruptions as a new culture and supporting systems are developed. The two years or more that such efforts inevitably require mean that the hoped-for efficiencies will not materialize in time to make a difference during this economic downturn.

The alternative is to let the marketplace work…

Now, I don’t want to suggest that the head of a Bay Area nonprofit is saying something that pertains beautifully and perfectly to nonprofit arts groups. But as someone who wrote a story on three nonprofit theaters here in New York that tried out a merger as a temporary idea with potential for something more solid down the line, I was intrigued.

Carson’s suggestion is to “let the market work.” I think he has a point. Are all nonprofits meant to last forever? Should they?