In my last two articles I have made the case for forward-looking nonprofits to consider very seriously merging or establishing a sustained collaboration with another nonprofit. I first shared reasons to do this, then outlined the benefits resulting from it. In today’s discussion, I will share the resources available to pursue this strategy, so the financial cost is not a barrier.
Out of this growing need for expanded nonprofit collaboration, an organization called the Sustained Collaboration Network was born, and now has members in six cities: Los Angeles, Scottsdale, Dallas, Chicago, Pittsburgh, Philadelphia and New York. Their role is as a fiscal agent for pools of “patient capital funds” given by private foundations and individuals who understand the value of moving toward this model. They also provide guidance and outside consulting resources for nonprofits going through the process.
Grants for these efforts are outside of and separate from typical funding from foundations, so there is no worry of “robbing Peter to pay Paul” for the participating nonprofits. There are two types of grants:
- Exploratory—to access third party experts: lawyers, financial analysts and facilitators, to determine if the parties are prepared to move forward. These are usually in the range of $10-40,000.
- Implementation—once the organizations formally agree to move ahead, they can receive an implementation grant to absorb the one-time costs associated with the collaboration: software, rebranding, integrating IT systems, staff and board cultural integration, combining office space, etc.. These grants typically average $30,000 but can be up to $100,000.
Since the founding of the Nonprofit Sustainability Initiative in Los Angeles, 230 nonprofits have received $3.7 million in grants. More than 85% of exploratory grants have resulted in signed agreements, with half being mergers or acquisitions and the rest being another type of formal partnership. 80% reported an enhanced ability to achieve greater impact with fewer dollars.
One of the biggest obstacles to these processes moving forward is the board. Because of their “duty of care” and personal loyalties, if they are not intimately involved early in the process, it will most likely not succeed. Organizations must be extremely sensitive to culture and leadership differences and work diligently to merge these effectively.
As we have mentioned several times throughout these discussions, sustained collaboration is about growth and change and about achieving more impact with limited dollars. It is about serving more clients better and more effectively.
Call Mirenda & Associates and let us assist you to navigate the challenging waters of making this momentous decision with a free, 30-minute consultation.600