If your organization is grappling with whether or not to merge with another organization or close altogether, you are not alone. The current economic climate is posing many challenges to the very existence of some organizations. For many donations are down, grants are smaller or postponed, and government funding that used to be relied on may simply no longer be available.
If your organization is grappling with difficult issues due to the downturn in the economy, there is help. The San Francisco Foundation has created a new fund called the Nonprofit Transitions Fund to help organizations reduce costs, increase productivity, merge, dissolve, or reorganize. The following is a list of the activities they are prepared to support.
- Back office collaborations (including rent, equipment, group insurance joint purchasing, and centralizing human resources, payroll, and benefits administration and financial and grants management). Such collaborations can reduce operating and administrative costs.
- Merger, acquisition or consolidation
- Dissolution (voluntary/involuntary)
- Bankruptcy or reorganization
- Post-merger integration or closure costs
- Service delivery joint ventures
If your organization would benefit from any of these activities you may want to consider completing the Foundation’s short and straightforward application form. You will be asked to identify which activity your organization is considering, the efforts you have already made in pursuing such an option, and what condition or situation is triggering this consideration. The application is online at http://www.sff.org or you can call (415) 733-8527.
All applications will be reviewed and select organizations will be asked to submit a more detailed proposal. That proposal will ask you to communicate information such as:
- Evidence of buy-in from staff, board, and constituencies
- Clear and realistic expectations of benefits/risks
- What niche or role your organization(s) serves locally or regionally
- An understanding of your organization’s relative competitive position and its financial strengths
If you are considering a merger, the Foundation will want to know about mission compatibility between the two or more organizations and the extent of a cultural fit, including board and staff compatibility. You should also be prepared to communicate your awareness of obstacles such as asset restrictions, endowment/bequest issues, current liabilities, deferred revenue, and other legal barriers.
While economic conditions may be the driving force behind these considerations, some organizations may become stronger and more effective by pursuing difficult choices.
There are a lot of things to consider and help is available.
Copyright 2009 – Mel and Pearl Shaw