Four Strategic Evaluations to Make when Considering a Nonprofit Merger

The United States is home to more than 900,000 registered nonprofit organizations and while some are fortunate enough to seemingly have endless funds at their disposal, the reality is that the majority work on shoestring budgets. In fact, 92% of the nonprofits in the United States have a budget less than $1 million. One of the many issues plaguing the fundraising and marketing efforts of many great organizations is the redundancy of services across the nonprofit landscape. Mergers are frequently talked about as a great opportunity for for-profit businesses but are often overlooked by nonprofits. However, merging talents can be a great way to expand a mission, grow fundraising, decrease overhead and reduce the overall volatility of the organization.

As a trusted consultant for nonprofits, NMBL Strategies knows that many nonprofits don’t even know where to begin regarding a merger, so the following four topics are designed to help start thinking in the right direction. In addition, nonprofits should consider completing an initial study to identify the interest for growth of an organization, whether a merger would be advantageous and if so, preliminary suggestions of how to make it successful. Starting with such a well-executed study will help a nonprofit through important growth, business planning and strategic planning processes.

Mission Possible

Understanding the mission of a potential merger partner, is key; however, that is just the start. Just because a nonprofit espouses a certain mission doesn’t mean that their actions are carrying through on it. It is important to really delve into the work of the respective organizations to confirm there is mission alignment in word and deed to ensure successful expansion and growth. As an example, a merger can be effective when a national organization has local chapters operating more independently. Often many of these local chapters operate within the same city or county and there is an opportunity to effectively align missions and expand.

Location, location, location

In many cases, two nonprofit groups are operating in the same area and they lose value because there is confusion from the general public, because they fail to differentiate themselves. When groups…