Collaborations could work for your nonprofit
Before deciding on a full merger, consider that a nonprofit collaboration can offer a less intensive solution.
Before deciding on a full merger, consider that a nonprofit collaboration can offer a less intensive solution. Shutterstock
In response to the increasing pressure to do more with less, nonprofit leaders find themselves asking: Are there ways to assure the sustainability of our organization and achieve our mission while improving outcomes? Can we collaborate and work together differently to become more effective and efficient? Maybe we should merge – but we are unique and we do not want to lose our autonomy.
Before deciding on a full merger, consider that a nonprofit collaboration can offer a less intensive solution. It can be as simple as a one-time administrative alliance or a more formal collaboration that sets up and employs an External Service Provider to deliver specific administrative services such as payroll, human resources or marketing. Some nonprofits have found success creating a standalone Management Service Organization where a number of nonprofit agencies provide specific services to and for the participating agencies.
Bear in mind each form of collaboration brings its own complexity and risks as well as time commitment and costs. Moreover, it also takes a willingness for individuals from different cultures to effectively work together.
A merger requires creating a new combined entity out of the merging organizations. Entities must wed cultures, blend work processes and realign organizational strategic initiatives. It’s not for everyone.
A 2014 report from The Bridgespan Group titled Making Sense of Nonprofit Collaborations stated: “Nonprofits reported the most activity in the less integrated forms of collaboration: associations and joint programs. Both lend themselves to multiple engagements in a three-year period versus more integrated collaborations.”
Most every nonprofit leader knows from experience that there is ever increasing pressure on nonprofit organizations to become more effective and efficient and to improve outcomes.
As pointed out in the article “Evolve or Die” by Patricia Evans and Barbara Grantham nonprofit funding is moving from a combination of “government and a little bit, to, some government, some philanthropic, some earned revenue/social enterprise, some individual and corporate support.”
Social service providers, in particular, are under increasing pressure to undertake fundamental changes in how they provide services, such as moving from a fee for service model to a managed care construct, in an effort to improve outcomes and lower cost. Many will also cut costs as deeply as possible without hurting programs. But then, in order to thrive and continue offering the services their clients need, they will need to look to other options – and collaborations should be among them.
To determine which type of collaboration may work best for your organization, consider enlisting a consultant that has no affiliation with any of the organizations involved. At The National Executive Service Corps, we work with social service agencies and educational institutions to explore shared service initiatives and we facilitate no-cost initial shared services consultations and information discussions. NESC has helped a number of metro New York, Connecticut, New Jersey, Westchester and Long Island nonprofit organizations undertake shared services initiatives such as a shared service security agreement or a shared service agreement to provide facilities.
A third-party facilitator can help the collaborative process by encouraging honest conversation about each organization’s capacity, commitment, concerns and responsibilities about a shared service undertaking. Moreover, they can help a nonprofit think through the options and find solutions on how best to combine corporate legal structures, provide joint programs or share back office infrastructure.