Mergers among nonprofit organizations can be a long-term strategy for achieving mission goals while addressing financial distress, a report from the Metropolitan Chicago Nonprofit Research Project, a partnership of Mission+Strategy Consulting and the Chicago Foundation for Women, finds.
The report, Mergers as a Strategy for Success (103 pages, PDF), examined twenty-five nonprofit mergers that took place between 2004 and 2014 in the Chicago area and found that participants in 88 percent of the cases felt the organization was better off after the merger in terms of its ability to achieve its organizational goals and boost its impact. While common challenges included staff and board member retention, program continuation, and leadership succession, the study identified ten key factors in a successful merger, including building trust with the right partner; focusing on mission; mapping out clear outcome goals; fully engaging boards, CEOs, and staff; carefully implementing cultural integration; and involving outside experts to facilitate the process.
Conducted by the Center for Nonprofit Research at the Kellogg School of Management at Northwestern University, the study includes in-depth case studies of five mergers — between Big Brothers Big Sisters of Metropolitan Chicago and Big Brothers Big Sisters of Lake County; Boundless Readers and Working In The Schools; the Chicago Foundation for Women and the Eleanor Foundation; Horizon Hospice & Palliative Care, Midwest Palliative & Hospice Care Center, and JourneyCare; and United Cerebral Palsy of Greater Chicago and Seguin Services.
"We hope this study will fuel more conversation among nonprofits and funding organizations that mergers can be one of the strategies in the tool box to ensure the ongoing health and effectiveness of nonprofits," said Debbie Reznick, senior program officer at the Polk Bros. Foundation, the report's lead sponsor. "Our intent is that the study will provide foundations with a better understanding of when and what type of merger makes sense – and, if they do make sense, how to achieve success."