“Over more than two decades of helping hundreds of nonprofits merge, LaPiana Consulting has observed the prevalence of mergers to be 1 percent or less of the sector in any given year. It is remarkable that 23 percent of the organizations responding to our survey are now considering such partnerships. One of them said they had been thinking about a merger with another group for years, and ‘COVID19 has finally pushed us to begin those discussions.’” David LaPiana , June 2020 Stanford Social Innovation Review
COVID isn’t the only thing driving increased interest in mergers and alliances. Here are some additional trends and headwinds that are bringing organizations together to propel collective impact.
- Conditions of fiscal distress
- Leadership transitions
- Needs are growing, especially for those most at risk and marginalized
- Proliferation of new nonprofits competing for resources
- Faith in the nonprofit sector to solve problems is decreasing
- Growing demand for partnerships from funders and contractors
But the most important trend of all is that the organizations leading the way are getting positive results from the mergers and alliances they are forming
Research reveals that “In 88% of the cases we studied, both of the merged nonprofits reported that their organization was better off after the merger.”
SeaChange published a report with the following headlines:
- 83% of the 52 mergers studied met or exceeded expectations
- Programs were meaningfully expanded or enhanced in 71% of the collaborations; in 60%, more people were served, while 21% preserved programs that would have otherwise closed.
- 57% of the collaborations advanced plans for financial sustainability; cost savings were realized in 31% (ranging from 1% – 11% of combined budgets).
- 54% of the collaborations resulted in stronger C-suite teams, boards, and/or program staff; 33% of the collaborations solved for an executive director succession event.
At Strategic Impact, we know from first-hand experience that mergers and alliances have the potential to be transformational to the participating organizations, to the purpose they exist to advance, to the ecosystem they are a part of, and to the community at large.
While we certainly recognize that mergers are not the right option for every organization, we wholeheartedly believe they should be explored as a strength-based strategic option to advance your purpose, improve your outcomes, and facilitate greater collective impact.