Systems Thinking: Encouraging Mergers
Today during our webinar on Agile Philanthropy we discussed the idea of Systems Thinking. During this conversation the following conversation was posed. I am curious how other funders are thinking of this of this idea.
"In considering systems thinking, especially during the COVID crisis, would it be worthwhile for grantmakers to consider funding that encourages mergers of nonprofits that alone might not survive the crisis, but together could not just survive but thrive while also helping to undo duplication of services in communities? I realize this is a really existential question, but now is the time for many agencies to rethink their reason for being within the nonprofit community they are a part of."
Comments
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Yes, we do see it as worthwhile.
We saw M&A activity pick up after 2008/2009 and expect it will again this time around. To help with initiatives like this our Foundation serves as a neutral discussion host for the two sides to come together. We also helped launch a pro-bono legal program at our local MSO where nonprofits considering M&A can discuss how-to's (among other things) with an attorney.
Great discussion today! Thanks Foundant.
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Hey all!
At my former Community Foundation, there was a small percent of discretionary funds that encouraged nonprofit mergers and allowed for funds for a consultant to help think through how two organizations can come together (working through a shared vision, mission statement, organizational structure, etc.) as well as dollars for legal fees, software transitions, and other operational dollars that can be a barrier for nonprofits who consider merging. Just wanted to throw that out there for things to think about if your foundation is considering this!
Best,
E.C. Pollick Byrnes
Foundant Technologies
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We offer annual Collaboration Grants where two or more nonprofits are working on a program together to address a specific issue. One such grant catalyzed a very successful merger where two organizations were serving the same population. Each organization's weaker areas were the other's strengths. Moving in to share the same office space to reduce overhead costs eventually led to merging services and full integration of the two organizations into a single stronger, more efficient nonprofit. Based on that success, we will most likely use those grant funds in the coming year to assist with organizations who may be looking at closing their doors and more willing to worry less about protecting "turf" and consider working with another nonprofit to merge. However, "merge" can often have a negative connotation, so we will be focusing more on concepts such as "mission preservation" and "strategic realignment." As @MeghanWarrick mentioned, our Foundations can serve as neutral facilitators where we have built trusting relationships with our nonprofits and can be seen as a safe place for counsel, advice, encouragement.
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I think this is a great conversation, and one that many CFs have been having the last couple of years. In Dallas, there is a group of funders working on a program that started in 2017 called "Better Together" and it focuses on funding long term non-profit collaborations as a way to maximize impact.
If anyone is interested, here is the website to learn more about what these funders are doing in Dallas.
Here is the first year in review/results. It's a long read, but worth while if you're interested in learning more about how that community is approaching this subject.
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