Nonprofit Mergers & Collaboration

Best Thing Ever? Or the Swan Song of a Dream? See how one nonprofit merged with another and learn concrete steps nonprofit EDs and boards can use in their decision-making process.

Nonprofit Mergers & Collaboration
13 mins read

For nonprofits, collaboration has been a bit of a buzzword as of late.

But when we think of collaboration, many different things might come to mind. Perhaps we think of simply working together, both within and outside of our organizations. Maybe we think of pooling resources, especially the oft-touted mantra of time, talent, and treasure. Maybe we also think of sharing the burden, co-directing so that no one person must be fully responsible for all leadership. Maybe we think of the bigger splashier media that this can generate—we’re twice as big now; look at how many more things we are doing! Collaboration might lead to any number of pros (and cons), especially for nonprofits.

So, let’s talk about mergers. We are all familiar with the banking industry and how the bigger banks swallow up the smaller ones. It happens all the time and is an accepted process. Many smaller banks will even work towards certain goals that make them desirable to purchase, providing the best-case scenarios for the sale. It’s what the board of directors and shareholders strive for, sometimes for years, to make the maximum gain in the company’s eventual sale.

But there is a different mindset for those who start a social need nonprofit. We are passionate warriors and champions who have often been fighting the good fight for many years. Now, we might be looking to have a stronger voice to continue our campaign, especially given the setbacks many of our organizations and our people have dealt with from COVID and the pandemic.

Wait… A Nonprofit Merger?

No nonprofit opens its doors with the idea of being absorbed (or bought out) by a bigger organization in 5, 10, or even 15 years. I would venture to say that almost all nonprofits are started because of their leaders’ dreams, passions, and willingness to give their all to create organizations that work towards world betterment—or at least saves their little portion of the world. And that is the way it should be.

So why would one nonprofit want to merge into a deep collaborative relationship with another organization? Is it a death knoll for the founders? Is it a sign of weakness? Perhaps it is a show of clashing wills between two camps—ED vs. staff or maybe board vs. ED.

But what if it’s none of the above? What if it is a realization that together, we are stronger? Maybe it is an epiphany moment where one nonprofit leader says, “Wait! We are doing the same basic service. Why not work together, share the expenses, challenges, strategic planning, and successes?”

Collaboration All the Way Down

My original nonprofit, Team Giving, was co-founded by myself and a good friend in 2016. We had no idea how it would go, although we hoped and prayed our idea to serve the nonprofit community would be a success. Our business model that matched other nonprofits with volunteers was fresh and innovative, so we hoped it would catch on.

Well, catch on it did. By 2018, we had thousands of volunteer hours coordinated and hundreds of community connections. We were truly making social change happen, and we had a place in our region that enabled us to make positive impact in our communities. Fast forward 4 years: COVID takes over our lives and leaves us all pondering how to move forward.

Things felt especially uncertain when my co-founder announced she was leaving the organization. I was rattled. Although I knew I had the passion and heart to continue our organization, I didn’t know if I had the bandwidth.

However, I had the good fortune to be connected to a good friend and amazing mentor. After I knew my partner was leaving, I reached out to my mentor. During our conversation, I said something to the effect of “Let’s play together.” The response was enthusiastic, and from there it was a matter of ironing out what working together would actually look like.

Our Merger in Practice

Step 1: Maximize efficiency, minimize expenses.

We obtained the approval of our respective boards and we outlined some of the basic functions and how the merger would progress.  As our collaboration has grown, we have defined and developed new strategies to offer a broader range of services to our partners. We work out the “nuts and bolts” as we go.

We started by sharing our office space and consolidating our equipment, supplies, etc. We were able to downsize multiple items (we really didn’t need 3 paper cutters)! Team Giving also moved to the more centrally located office space of our new partner, the Impact Foundry. Together, we started creating a united, well-rounded menu of services to help our nonprofit partners navigate the roller coaster ride of 2020 and 2021.

We also consolidated our community contacts and supported each other to continue to offer community classes and seminars. We continued our collective advocacy for nonprofits, offering help wherever it was needed. Essentially, we offered a collaborative network of support to get the community through the challenges of the pandemic.

Still high from our office merger, we started looking at other places we could consolidate. Many of the areas where we were able to minimize expenses were in operational costs, such as payroll, insurance, and accounting services. However, we also consolidated our social media marketing programs as well as our grant research and outreach. We even started sharing other hats, like event planning and monthly mixers!

We have maintained separate accounting systems until the merger is officially complete (this is how our state wants things to flow, your state may differ). We transfer funds as needed to share the expense like insurance, workers comp, etc., and record the expense appropriately on our books.  We are under Impact Foundry’s payroll service and will file our last tax return as Team Giving this year.

Step 2: Tackle challenges

Next, we tackled any changes of our new collaboration efforts. We had to make sure that we were communicating well and strategizing how to perform our tasks most efficiently. As leaders, both my mentor and I already knew we worked together well, so luckily, we didn’t have to deal with personality clashes, which would have made our merger much more tenuous.

We have found it successful to have one person in charge of a particular program and they are the lead on all the activities in their arena. For example, while I wholeheartedly support our DEI programs, I refer everything DEI to our Chief Diversity Officer. She in turn refers all volunteer and community engagement questions and needs to us as Team Giving.

Even though we all worked together well, there was a learning curve with more methodological approaches towards nonprofit operation. In general, Team Giving tends to be a more forward-facing nonprofit, constantly out in our communities, overseeing volunteer projects and community giving. On the other hand, Impact Foundry has many amazing programs to develop sustainable change and build success in organizations, including training programs around board governance, development, strategic planning, executive oversight, and service procedures.

We maintained our own lanes of our nonprofits, sharing data and resources as needed.  As we became more of a community collaboration, we worked together on marketing, social media, and growth of the Team Giving brand as a program of Impact Foundry. On Impact Foundry’s new website, for example, Team Giving is their own program with its own site page. We will maintain the webpage that most of our Team Giving partners are familiar with thru early next year when we finalize the merger and announce the formal partnership.

Step 3: Collaborate on strategic planning.

Our two nonprofits are in the process of bringing together our strategic plans in order to build a strong pathway that finalizes our merger. Essentially, we are attempting to determine in what way each nonprofit can best mechanize their previous experiences to address the different functions necessary to offer the very best services for our clients. It’s a simple idea that is a little more complicated when you consider all of the various moving parts.

With the pandemic, Team Giving had invested resources in pivoting our previous approach to address the shortage of volunteers and lack of community interaction. We had to make sure we talked with our partner to see how we could leverage what we were already doing (and had already done) with their mode of operations. Again, we worked on being transparent and building good communication and shared goals so that we could emerge as a united front when our clients (re)opened their doors and reached out for assistance.

Step 4: Share successes!

One of our major successes was the broadening of connections across our organizations. By combining our contacts and connections, we now have access and direct lines to more than 500 nonprofits. For Team Giving, that is a more than 300% increase in potential partners. For the Impact Foundry, their membership now has expanding services with volunteers as well as training and giving programs that support the community.

As a result of these broadened connections, both partners also gained more supporters. Team Giving now has more supporters than ever. The connections that Impact Foundry shared with us have resulted in funding opportunities, donations, and even further connections to new and exciting resources. At the same time, we have been able to introduce the services they offer to our partners, creating new members for Impact Foundry and expanding our overall reach into the nonprofit community.

Did we give up any of our identity? Did we lose clients or supporters? Did any of us feel like we lost our identity or personal goals? No, if anything, we matured as an organization. As a result of the increase in connections and support, we are now positioned to create capacity building for our nonprofit partners, helping to shape the health, sustainability, and well-being of our sector.

Percolating Sustainability & DEI

Nonprofits often can become so siloed in what they’re doing that they lose sight of the bigger opportunity. When the resources, talents, intelligence, education, and experience of multiple nonprofits are combined, the result is a far-reaching, synchronized organization that can fulfill a variety of needs and build strong communities.

Sure, there will be hiccups. There will be those who nay-say your plans. Some (not many) will even vilify your efforts.

Ignore them all, politely and with compassion. They say it takes a village to raise a child; I think it takes a far-reaching and committed partnership to raise up a community.

As for us, Team Giving is now serving a more diverse group of nonprofits, many of whom we never would have reached if not for the collaboration with our new partners. By expanding your reach, you too might also become more inclusive and accessible to all members of the nonprofit community.

Here’s to many happy collaborations and partnerships. May you always prosper and rise!

About the Author

Trudy Harris co-founded Team Giving to inspire, guide, and advocate for local nonprofits by matching them with volunteers to complete needed projects. Team Giving’s innovative approach addresses important social and community needs while building partnerships between businesses, individuals, service clubs, and the nonprofit community. Since 2016, Team Giving has partnered with over 140 nonprofit organizations in the greater Sacramento region and has coordinated thousands of volunteers. This has provided more than 32,000 volunteer hours for projects and events that serve the most vulnerable members of our communities. By connecting interested individuals and groups with nonprofits, Team Giving helps reduce the stress on these organizations and provides our community with a simple and meaningful way to help strengthen their connections by supporting our nonprofit partners. Trudy has always made the nonprofit sector part of her life, creating corporate opportunities to give back through various programs in the for-profit world. She lives in Carmichael with her husband of 41 years and enjoys spending time with her family and friends, particularly her 3 lovely granddaughters. Trudy is an avid gardener and loves to cook large family meals.

Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. Views represented in Blue Avocado do not necessarily express the opinion of the publication or its publisher.

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