What’s the best way for your nonprofit group to work together with other organizations? Should you partner with another organization, or merge with them altogether?
Judy Alnes, executive director of MAP for Nonprofits, a consulting group, says answering that question is not always simple. That’s why she is leading a workshop Friday, May 23, at 8 a.m. at Greenacres Country Club. The free workshop, hosted by the Princeton Area Community Foundation, is aimed at CEOs and board members of nonprofit groups. For more information, visit www.pacf.org or call 609-219-1800.
“We always start with the question, ‘What mission are you trying to accomplish?’” Alnes says. “Given your mission, how should you be organized or structured to be the most powerful?”
Alnes is flying in from St. Paul, Minnesota, for the workshop. She has lived in the Twin Cities area her whole life, growing up in a household where both of her parents were journalists and her father was an editor at the Minneapolis Star. “I grew up steeped in conversation about civic issues and policy issues,” she says. “I was overhearing conversations at the dinner table, and it was clear to me early on that my career would be in helping the community find ways to solve problems.”
She went to school at the University of Minnesota and has made her career working with nonprofits, at one point working in a company’s community service department. She founded MAP for Nonprofits, itself a nonprofit consulting group, to help other organizations achieve their missions. The unique nonprofit group was founded in 1979 as Management Assistance Project, and later changed its name to MAP for Nonprofits. It currently works with more than 500 organizations a year.
Over the years, Alnes has guided many nonprofit groups through the process of merging, partnering, or sharing services. In one recent case, there were two-day programs for people with disabilities operating in the same area. “Each of them had their own fleet of buses and vans that would go pick up participants for programs. The buses would drive down the same streets, and the bus drivers would wave at each other. It seemed so silly of them to have this duplicative service.” The two groups came to MAP for advice on joining forces. They ended up forming a single joint transportation company, saving money on vans, drivers, and gas. The new venture also started serving other organizations.
In that case, cooperation proved to be the best course of action. In another recent case, an organization that provided housing for women coming out of the prison system was facing the prospect of its founder retiring. “She had been a single-minded driver of this organization,” Alnes says. “She looked around and said, ‘Does anybody here have the chutzpah that it took for me to put this thing together?’” It turned out that the best move was to merge the housing service under the umbrella of a larger organization.
Alnes says those kinds of mergers are the most fraught with emotion for the participants, especially on the part of the group that is being absorbed into the larger organization. In the process, one group stands to lose its name and its identity, which can be especially troubling for people who have invested a lot of time and effort in the group, or if they founded it. “‘Leave the egos at the door’ is a very helpful piece of advice in working on any kind of nonprofit realignment,” Alnes says. “If people have long and deep relationships with organizations, and they’ve got hard-fought positions, it’s very hard to imagine giving up.”
There are many reasons why nonprofit groups might want to merge or create partnerships. They might want to move into a new geographic area, save money, or add skilled staff or programs that other groups have already, rather than starting from scratch.
Many mergers take place because one organization is in serious financial trouble and looks around for a healthier group to take it over. But by then it may already be too late. “We always tell people to look for partners before you’re in desperate straits, and especially before you’ve taken on a lot of debt,” Alnes says. “Very few organizations want to enter into a partnership with an organization that’s taken a lot of debt.”
Alnes says a financial crisis should cause a group’s leadership to refocus on what really matters: Does the organization need to continue, or is it more important to somehow preserve the services that are being delivered to the community? In those cases, MAP sometimes advises moving a program to a healthy organization that is good at fundraising and management, and dissolve the old one.
If a merger turns out to be the right choice, it’s important to settle major details early on, or chaos can ensue. Alnes says she once worked with two charter schools that were merging and had gotten very far along in the process before settling some basic questions. The schools had already agreed to share a building and combine their two schools. They had even picked out colors for the walls. But they didn’t have a name for the new school, and they had no plan for who would be on the board of directors.
Alnes says she sees evidence that while the rate of nonprofit mergers hasn’t been increasing, there is more interest in them, and more and more groups are pursuing joint ventures and strategic alliances. “Our purpose is to increase the power, the agility, and the effectiveness of the nonprofit sector,” she says. “If we can keep those things in the front of our minds, organizational realignment becomes a tool to get there rather than some sort of a punishing process.”