Collaboration … Consolidation … Coalition

non-profit_many hands-all inBy:  Peggy Jennings

Despite an increase in competition for public and private funding and contributions during the recent economic downturn, a recent study by The Urban Institute reports that “the number of US nonprofits actually grew 7 percent between 2007 and 2011 to 1.58 million, an average of nearly 40 nonprofits per US zip code.” This means that there are a lot more nonprofits competing for the same resources.

Collaboration might be one answer; by working with others in the industry, you may be able to:

  • Take advantage of best practices
  • Build a coalition around a common goal
  • Share services to enhance economies of scale

Alternatively, a nonprofit might consider a consolidation or merger to capitalize on synergies, cost savings or other efficiencies. In doing so, be careful of emotionally charged issues such as creating alignment between boards, ensuring compatible cultures and blending the brands. Further, a due diligence study will help you to determine whether the merger or acquisition is in your best interest.

Formed in 1917 by the merger of two competing firms, Eide Bailly understands how similar transactions can increase, not diminish, your impact to your mission.  Let us know if your strategic plan includes consideration of collaborative or consolidating ventures – we can share our experiences, assist with due diligence and help you achieve your mission and goals.

 

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