Nonprofits on the Move with Mergers

Too often discussions around nonprofit partnerships and mergers focus on the financial drivers. For example, one nonprofit may be in crisis and rather than shutter operations, it seeks to form a new organizational structure with another, more financially robust organization.

But there is another important reason nonprofit leaders should consider exploring partnerships: mission impact. This plays out in a variety of ways.  If you are successful in achieving your mission, then it stands to reason that over time, your mission may need to evolve. Or perhaps your client population has shifted dramatically with the region’s changing demographics? Or better still, what if the social problem your organization originally formed to address dramatically improved or changed?

Lessons from San Francisco and Beyond

Such pivots are currently apparent in the nonprofit subsector of HIV/AIDS-related services. Many nonprofits, founded 30 years ago, focused on an acute public health crisis impacting a smaller demographic segment of the population. But over the decades, as new drug treatment modalities became available and as the disease spread across other demographic segments, the service models and organizations had to adapt to the chronic, long-term needs associated with supporting HIV positive clients.

This summer, the San Francisco Chronicle and Nonprofit Quarterly reported how “Clients have gone from young men who were dying at 25 to older patients who, at 55, are still living. Currently, more than half of the people with HIV in San Francisco are 50 or older. Improved safer sex practices and advances in drug therapies and medical treatments have shrunk the client base dramatically; some agencies serve half the number they did in the mid-1990s.”

These trends have led some nonprofits to shift focus. For example, food services for clients have evolved to serve healthier food for those also living with diabetes and heart disease. Other nonprofits have merged together to provide a range of services around housing, mental health, or substance abuse prevention, in addition to HIV/AIDS-related support.

The need for HIV/AIDS nonprofits to refocus their operations has not been limited to the San Francisco Bay Area. New partnership models, collaborations, and mergers have taken place throughout the U.S. For example, Vista Global supported the cultural integration process for the merger of the AIDS Network and AIDS Resource Center of Wisconsin.

Photo: AIDS Resource Center of Wisconsin (ARCW). Grand Opening of new Medical Home. June, 2016.
Photo: AIDS Resource Center of Wisconsin (ARCW). Grand Opening of new Medical Home. June, 2016.

Exploring the Implications for Other Sectors

The rapid changes in the HIV/AIDS-related space offer lessons that can be applied across sectors. For example, to survive the wake of the Great Recession, arts nonprofits explored a range of collaborations.  City government agencies are considering mergers as well, as highlighted by the recent merger of the offices of Homelessness and Welfare for New York City.

With the fallout from the U.S. housing crisis, social service nonprofits also have to pivot as the face of the homeless population changes. Currently, Vista Global is working with four nonprofits serving the homeless population to explore program collaboration and merger options.

Are the leaders of your nonprofit considering a program collaboration or merger? Share your story in the comments section below or contact Mary today to learn more.

Culture First: Tips on Nonprofit Merger Success through Organizational Cultural Integration

Too often people think of nonprofit mergers as a frantic survival strategy for organizations in a state of financial crisis. However, robust nonprofit organizations are using a range of partnership, consolidation and strategic alliance models not to survive, but to thrive.

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In early 2015, AIDS Network and AIDS Resource Center of Wisconsin (ARCW) announced their merger, supported by a grant from the AIDS United Sector Transformation Initiative. The organizations were not in crisis. The merger goal was to combine two strong organizations and expand services to patients and clients.

“Wisconsin has always been a national leader in the fight against AIDS. Our merger will enhance this leadership position. By combining the best of our two organizations, we will enhance services, improve clinical outcomes, and generate new financial resources, all of which are critical as we continue on our quest for a world without AIDS.”

– ARCW President & Chief Executive Officer Michael Gifford.

Some Merger Integration Do’s and Don’ts

Vista Global Coaching & Consulting facilitated the negotiations and the organizational integration for AIDS Network and ARCW.  The continuity of consulting support over the course of both phases expedited the entire process. The timeframe from the initial conversation of the negotiation team to the celebration of the merger integration process was 18 months.  Although the process was efficient, it was not without intention and focus.

Don’t Ignore Culture in the Negotiation Phase

Honor important cultural elements of pre-merger organizations. Surface and address historical challenges in relationships between organizations to move forward in creating a new narrative. Sensitivity to power imbalances and strategies to mitigate those imbalances from the beginning of negotiations, sends the clear message to staff of both organizations that we are in this together to create a stronger organization that will better serve clients.

It is important to build relationships among the negotiation team members and develop a shared vision. Crafting ‘Strategic Intent Statements’ supports transparency and documents a process rooted in good faith which allows the group to point to that shared intent when there are bumps along the way.

Do Make Culture the First Priority in Integration

It is easy to launch into the systems and structural integration elements of combining two organizations but there is great risk in not putting emphasis on culture as the first priority.  Without this focus, it is easy for staff to stay locked in the pre-merger cultures and fall into “us v. them” perspectives.  Building an integrated culture is critical for long-term success.  Cultural integration requires intention, structure and tools to support the transformation.

To begin a cultural integration process, it can be helpful to use an assessment tool that provides an objective framework of the cultures of the combining organizations. In the AIDS Network-ARCW integration process, we used the Organizational Culture Assessment Inventory (OCAI). The tool allowed the merger integration team to look at the existing cultures and determine the preferred culture moving forward.  Identifying the vision of the preferred culture and the behaviors and beliefs that align with that preferred culture sets the course for “being the change we want to see” in the new organization.

Leadership Takeaways and the Return on Investment

Leaders need to understand when it is important to push for rapid changes and when it is more important to pause, listen, and allow members of the organization time to process. In the integration phase, building a “guiding coalition” of staff from all levels of both pre-merger organizations is a critical success factor.  The ARCW Merger Integration Team had 14 staff members.  These individuals became the change agents as the structural integration process began.  Eight work groups were established that included approximately 50% of all employees.  Even though ARCW is a statewide organization with 10 offices, every staff member was engaged in the integration process.

Strong nonprofits considering merger will be most successful if they go beyond just negotiations and invest financial resources, time, and staff in the integration process. Invest in a structure of internal leadership combined with external consultant support. Create early wins before and after the merger to maintain the momentum necessary to build a new organization.

Organizational culture can be abstract or intangible. A nonprofit’s culture is the sum of many parts. For a successful cultural integration, leaders need to acknowledge the value of each part.  The successful AIDS Network and ARCW merger integration is proof that cultural integration is possible when leaders invest in the process.

What is your experience in cultural integration?  We would love to learn more from you about this critical success factor. Contact Mary today!

New Resources on Nonprofit Success Factors

As a contributing author, I’m excited to share new publications from Public Interest Management Group that address the question “What contributes to nonprofit success?” This action research project examines 32 success factors in five categories: Strategy, Culture, Operations, People and Business Model.

The Success Factor Analysis is a fresh data-driven approach to nonprofit management.  Read an overview of new publication Success Factors for Nonprofit Organizations: A New Approach to the Development of Thriving Mission-Driven Enterprises to learn more.

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Read the new blog by Public Interest Management Group founder, Scott Schaffer, for an introduction to the Organizational Success Index and more!

Ten Years of Boldly Pursuing their Dreams

I have been working in the nonprofit and social sector as a practitioner, board member and a consultant for almost 25 years. I love having the opportunity to learn about the spark that launched organizations and the vision that a founder had for the change he or she wanted to see in the world. In 2012, in partnership with Forward Community Investments, Vista Global Consulting facilitated the Girls on the Run (GOTR) Dane County strategic planning process.  We shared that experience at the National Summit. GOTR-10thAnniversaryRace As a 9-year old girl who did bold things, like play little league baseball, I am very drawn to their vision:

We envision a world where every girl knows and activates her limitless potential and is free to boldly pursue her dreams.

The culmination of the GOTR program is a 5K run. For 2 years, I heard about the wonderful experience the run was for the girls, the coaches, and the volunteers. This year I participated as a volunteer in the Dane County 10th anniversary event.  GOTR founder, Molly Barker came to Madison for the event and spoke about her vision for the organization almost 19 years ago.

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Photo of Girls on the Run Founder, Molly Barker, with 10th Anniversary Race participant running with her father.

I was able to experience this wonderful organization living its dreams!

If you need support in boldly pursuing your dreams, whether that is strategic planning or coaching, let’s chat, contact me today!

More Lessons for Nonprofit Storytellers

If there’s one key takeaway to share with you from Andy Goodman‘s recent workshop sponsored by the Donors Forum of Wisconsin, it’s that nonprofit leaders must not think of storytelling as optional.

Storytelling is not just another tool in the tool box to dust off when it’s time to write your organization’s annual report or new brochure.

Storytelling is an everyday requirement for your nonprofit’s communications to be successful.

Why is narrative so powerful? Humans are programmed to process information through stories. Stories are easy to remember and tell another person.  A good story is one that makes you feel something and becomes imprinted in your heart and mind.

Spouting facts and figures won’t tell your nonprofit’s story– or do anything to move your audience, as storytelling guru Annette Simmons also points out in her work.

Think of a story as a Christmas tree.  Facts and figures should be thought of as an ornament hung on the tree.  Facts are not the whole story. The story is represented by the entire tree, rooted in a compelling human experience that evokes emotion.

One outline Andy Goodman recommends is the classic Three Act structure:

Act 1:  The Protagonist

Introduce your protagonist and describe his or her goal.  This protagonist must be a person – not a faceless organization or entity! Describe the individual so your audience can make a human connection.

Act 2: The Challenge

What barriers and obstacles impede your protagonist? Paint a picture and describe a place.  Don’t rely on facts and figures to set context.

Act 3: The Resolution

How a protagonist deals with the challenges reveals their character and values.  This part of the story should detail a clear resolution and give closure to the audience.

Crafting the Right Story for the Right Audience

Your nonprofit should not be limited to just one story.  Your organization should have a library of stories to choose from depending on the audience.

What kind of stories should you tell?  Here are some types of stories to consider:

  • The “Nature of our Challenge” story
  • The “How We Started” story
  • The “Emblematic Success” story
  • The “Core Values” story
  • The “Striving to Improve” story (mostly used for internal staff to learn from mistakes)
  • The “Where We are Going” story

Is your nonprofit a good storyteller?  If you are interested in learning more about storytelling, sign up for the Goodman Center e-newsletter, Free Range Thinking.

Start crafting and collecting stories in all of the categories above.  Share these stories with every staff member, board member, and volunteer so they can be good storytellers for your organization, too!

Is Your Nonprofit Navigating Change Successfully? Here’s Your Guide to Leadership Transition and Succession Planning

Vista Global Coaching & Consulting has partnered with the Olive Grove Consulting team on an exciting national research project based on hundreds of nonprofit CEO and Board Chair surveys and interviews. Some of their answers may surprise you.

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What are the risks, challenges, and opportunities facing the sector today?

To start, 56% of board chairs in our study stated “the CEO doesn’t plan to leave for a long time.” but 41% of the CEOs we surveyed “plan to leave within the next two years.”

Check out our new eBook, Proactively Plan for the Inevitable: A Guide To Leadership Transition and Succession, to learn more.

This eBook is an effective staff and board resource for charting successful leadership transition and succession planning that is now available free.  Download the PDF.

Creating a robust leadership transition and succession plan might seem like a tremendously daunting task. But, with a little help it can be easier than you think. Contact us today to get started!