by Dr. Brenda Summers
The merger of United Jewish Communities of MetroWest NJ (UJC MetroWest) and the Jewish Federation of Central NJ (Central NJ) as the Jewish Federation of Greater MetroWest NJ (Federation) is the latest in a number of nonprofit mergers taking place across the country.
“We are thrilled that our two communities are becoming one greater federation: the Jewish Federation of Greater MetroWest NJ, and we look forward to an exciting and stronger future together,” said UJC President Lori Klinghoffer, who will continue to lead the new entity.
For the chairs of the MetroWest and Central NJ Merger Committee, the approval of the merger is the culmination of hundreds of hours of meetings, countless e-mails and phone calls, and endless cups of coffee.
Hours of meetings are important in ensuring that the merger process is effective according to Marty Martin, a North Carolina attorney who has worked with a number of nonprofits on mergers. “Move slowly and look at all the options. Don’t think merger will solve all of your problems. Spend some time having in-depth conversations about a variety of options available.”
Martin states, “It is important that organizations have open candid conversations about what will happen as a result of the merger. What will the new organization look like? How will people work together in the new organization?”
The Nonprofit Finance Fund 2012 State of the Sectors Surveys, funded by Bank of America, asked about mergers and collaborations. Of the 4,500 respondents, two percent said they had merged and three percent said they would consider it in the coming year. Seventeen percent said they had collaborated with another organization to reduce administrative expenses, and 24 percent said they would in the coming year. Forty-nine percent said they had collaborated with another organization to provide programs, and 56 percent planned to do so in the next 12 months.
Peter Kramer, who works with the Fund, notes that while the number of mergers as a whole is still a small number, merger is an important option being considered so that nonprofits can continue to deliver services. His organization works with nonprofits in Boston and California hoping to collaborate.
The N.C. Center for Nonprofits serves as a resource for nonprofits in North Carolina that are considering collaboration at any level. “We work with groups that are cooperating on one program and those considering more extensive strategic alliances, as well as those trying to merge,” says President Jane Kendall.
“Successful mergers of nonprofits can’t be forced from the outside. Organizations considering mergers have to determine whether their core purposes are truly aligned with each other,” adds Kendall.
Kendall notes, “Since the 2008 recession, all sources of funding for nonprofits have declined. One silver lining is that this has created new opportunities for nonprofits to explore creative alliances to serve more people with fewer resources.” She says, “Mergers require more resources on the front end because of the extra work and the costs of combining two organizations. But in time and, most importantly, if the merger is successful, it can bring efficiencies in achieving the shared mission.”
Martin notes that mergers have mixed results. Some work and others don’t. “Mergers are more successful when the nonprofits have similar missions, and the board members and staff of the organizations know each other.”
“It is important to have clarity about what the nonprofits want to achieve with merger, and you need to let stakeholders know the benefits for them. There will be changes. Board members, staff and other stakeholders need to know how they will be affected,” Martin adds.
Some funding exists to help nonprofits explore the idea of a merger and for implementation. The New York City Merger, Acquisition and Collaboration Fund provides grants to encourage and enable mergers, acquisitions, and other types of collaborations. Since its launch in 2012 it has helped numerous New York City nonprofits.
Universities can be helpful to nonprofits considering mergers. Robin Landsman, an Extension Agent with the NC Cooperative Extension Service in the College of Agriculture and Life Sciences at North Carolina State University recently used a structured program to help NC nonprofits develop ideas for sharing resources.
Landsman explains her role, “Like a jigsaw puzzle, I provide the outside framework so that participants can work together to find the small pieces that fit together. The challenge for the facilitator is to create a process by which all the members are encouraged to be mutually responsible, to fully participate and to seek understanding to foster inclusive solutions.”
Dr. Brenda Summers teaches nonprofit management courses at North Carolina State University and offers consulting services through Summers Consulting Services.
Reprinted with permission of Philanthropy Journal.