Are you hearing about Mergers, Acquisitions or Fiscal Sponsorships popping up because of COVID-19?
The Florida Nonprofit Alliance conducted two surveys this year (in April and July) asking Florida nonprofits about the effects of Covid-19 on their institutions. The results around nonprofits’ sustainability and viability have stuck with me:
- The Effects of Covid-19 on Florida Nonprofits reported roughly 73 nonprofits thought they would have or already had close their doors completely as a result of Covid-19 economic effects. (April 2020)
- Looking Forward: How Covid-19 will affect Florida Nonprofits reported 69 nonprofits did close their doors permanently. 107 organizations investigated merging with another organization. 349 organizations concerned about having to close their doors permanently in the next 12 months.
I've had conversations with several people and the fragility of nonprofits is real. I’m curious to learn two things:
- Do you know of any NPOs who are looking to become a project of another organization to fulfill their program's mission, but reduce competition for funding and remove the operational burden?
- Do you know of any Funders who are talking about setting up funds to support these efforts?
I imagine funding competition is formidable in other parts of the country. Given the current economy, nonprofits are looking for a way to not to just limp along, but to survive beyond the pandemic. In Palm Beach County, over 5,000 nonprofits compete for very limited resources from several fewer funders. Often, the nonprofits are completing against similar organizations in areas like hunger, homelessness, senior issues, and mental health.
While mergers and acquisitions were once an unpleasant topic of discussion, today it may be the conversation that saves a great program while centralizing operations and reducing competition.
Please let me know what you are hearing. Thanks!
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This is a hot topic! Nationally, La Piana has been tracking info about the increased interest in mergers/partnerships due to COVID and shifting economic factors. You can learn more on their blog and in a great SSIR article: https://ssir.org/articles/entry/covid_19s_impact_on_nonprofits_revenues_digitization_and_mergers.
Here in Illinois, Forefront is our statewide nonprofit resource and advocacy group. They fund the Mission Sustainability Initiative (https://myforefront.org/programs-services/msi/), which provides grants for organizations in all stages of this process: pre-exploratory, exploratory, and implementation. Their goal is to make the nonprofit sector more sustainable, increase the capacity of nonprofits, and inspire greater nonprofit health. Forefront believes nonprofits should regularly be exploring these restructuring options, rather than waiting until it's a necessary response to crisis.
My firm is an approved consulting solution for the MSI project and has noticed an uptick in interest from nonprofits this year. It's exciting to see nonprofits think smarter and partner for the greater good.
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Hi Kristin, Thanks for the two links. I will check them both out.
In Florida, the Florida Nonprofit Alliance released its third report, COVID-19 Closing out the Year Report. https://cdn.ymaws.com/flnonprofits.org/resource/resmgr/files/FNA_COVID-19_Closing_Out_the.pdf
The nonprofits are still struggling with fundraising, cash reserves, and concerns about merging. Funders are starting to perk up, but interestingly not driving any conversations or starting big funding initiatives. They are waiting to see what the nonprofits do first.
We have a small contingent in South Florida beginning to do some of this work. As we dive deeper and need some insights, do you mind if I contact you offline? We have several people already experienced with this work, but I like to learn best practices from people outside the local environment.
Thanks!
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I'd love to connect offline, Jan!
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@JanRodusky not so much mergers but foundations are really looking at partnerships and collaborations.
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Partnerships and collaborations are critical to positive outcomes and therefore funding. Societal problems are multi-faceted. We should do what we do best and get help for the rest.
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