Mergers are Misunderstood
Let’s face it, mergers are uncomfortable. Going through them feels a lot like getting a stepmom. A woman you barely know who now suddenly shares your bathroom and insists on hanging crystals in all the doorframes. Stepmoms live in that uncomfortable space. They complicate clean narratives and, in the process, bring us discomfort.
Nonprofit mergers live in that same space. They can make us feel awkward or tense, perhaps even fearful. The reason is because mergers often feel like a failure. They’re seen as an ending, a last resort, or a quiet admission that something has gone wrong. But in reality, a merger can be a multifaceted tool to address many chronic issues plaguing nonprofits.
As a quick reminder, we’re using the term mergers as an umbrella term for all of the ways in which organizations can find common ground. This includes things like alliances and networks, shared service arrangements, and integrated organizations. We’ll be referring to them all as mergers, but we’ll be delving into all of the variations in a later blog.
Organizational Sustainability aka Money
The only way an organization can sustain itself is with a whole lot of that sweet, sweet cash. And here are just a few ways in which a merger can help you get more of them:
- Shared revenue streams allow organizations to align their fundraising strategies across all their networks. By combining efforts in individual giving, institutional support, and events, your organization can amplify its voice and, ideally, reap the rewards. It’s also a great way to diversify revenue, which makes the organization more resilient to policy shifts, economic cycles, and changing philanthropic priorities.
- Access to larger contracts and funding opportunities is another advantage. Many government contracts, institutional grants, and corporate partnerships require minimum operating budgets, staffing capacity, or compliance infrastructure. That means that in order to even be considered for those big pots of money, an organization has to have the size to match. A merger can increase your size and unlock eligibility for much larger sums.
- With a merger comes an economy of scale, meaning the bigger your organization gets, the cheaper it becomes to operate. Streamlining back-office functions like finance, HR, IT, and compliance cuts cost and reduces duplication and administrative burden. Leadership can spend less time holding the organization together and more time delivering on mission.
Misunderstood Doesn’t Mean Misguided
Just like Dad’s new wife Susan, nonprofit mergers make us uncomfortable. They challenge the stories we prefer to tell about how everything is perfect and nothing needs to change. But we all know Dad hasn’t been the same since the divorce. Mergers force us to realize that, sometimes we need to blend our families for the greater good. And it’s through that discomfort that we can all come out the other side better and stronger, and with a little more grace for those around us. Even Susan, who actually makes pretty decent soup.
Next week, we’ll dig into how mergers don’t just stabilize organizations—they strengthen the people inside them, too.