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.

Every great nonprofit begins with a great board.

Vista Global offers a variety of workshops and trainings. But the high demand for trainings on board governance remains constant.  Board members are hungry for guidance on defining their roles and responsibilities. Board development is not a simple one-time activity, but a continuous cycle of self-reflection and self-improvement.

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In our workshops, we explore different governance models and their benefits. Some organizations thrive using the Policy Governance Model designed by Dr. John Carver.  While other nonprofits may benefit more from Community-Engagement Governance, a framework designed by Judy Freiwirth, that shares governance responsibility across the organization’s constituents, community members, staff and board.

Another key component of these trainings is the importance of a great working relationship between the Executive Director and Board Chair.  In fact, certified mediator and consultant Joan Garry believes the relationship between the Executive Director and Board Chair “tells you more about the health of a nonprofit than any other single factor.”

Best practices don’t end with the board members sitting around the table, either.  Board members have a responsibility to identify and recruit the future board leaders, too. Our workshops explore the entire board development life cycle.

Your organization is only as healthy and effective as your board. Interested in learning more about nonprofit governance? Read more about Vista Global’s workshop offerings and contact Mary today!

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!

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!

Equality and Equity: Our Generation’s Legacy

Growing up in Illinois, “the Land of Lincoln” I took a special interest in our sixteenth president and his efforts to create a nation where “all men are created equal” and that we are a “government of the people, by the people, for the people.

I was born a year after the Civil Rights Act was passed and two years after Martin Luther King Jr. gave his “I Have A Dream” speech on the steps of the Lincoln Memorial, commemorating 100 years since the Emancipation Proclamation.

In a legal sense, I never experienced my country’s segregation. But as I started public elementary school, these core tenets of equality (as I understood them) didn’t seem to line up with how things were done.

This experience raised my awareness of equality and equity. Equality is being treated the same. Equal opportunity, equal access to success. But when there are roadblocks to this success, equity comes into play.

Equal access doesn’t mean equal outcome. For example, even though I am allowed to apply for college using the same application process as a male in the name of equal access, this doesn’t mean we arrived at that college application investing the same level of effort or will have an equitable experience let alone the same level of success.

Difference can be correlated to inequality or diversity. How do we value the difference between one another? How do we value diversity? Equity is a way that we can arrive at a place where we can value that difference.

“Leveling the playing field” is a term used to create equity. Example: On the track, when running 400 meters, instead of placing runners at the starting line, the runners are placed in a staggered start to create equity.

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Register for the Leadership and Equity webinar on January 28, 2014.

These concepts of equality and equity are important because in our generation, discrimination is often unintentional or less overt when compared to the era of Martin Luther King, Jr.  But just because discrimination is unintentional does not mean it won’t have a lasting negative impact.

When we unintentionally surround ourselves with people just like ourselves we don’t have awareness of the roadblocks or challenges that some may face to achieve that same status.

Whether we are at a board meeting or a cocktail party, if everyone is the same race, class, gender or sexual orientation, we can’t benefit from the wisdom that comes from sharing diverse perspectives.

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Yes I am of the post-Civil Rights Act generation that did not witness segregation. There is awareness among my peers about equality. But there is less awareness and understanding of equity and why it is critical to a fair and just society.

If you have interest in exploring this topic of equality and equity, please join me and my colleague, Cheryl D. Fields on March 25, 2014 at 1pm PST/4pm EST for a webinar entitled Leadership & Equity hosted by the Leadership Learning Community. Register for the webinar today!

We will continue this dialogue and what role each one of us can play to move our world closer toward the vision shared by Abraham Lincoln and Martin Luther King, Jr.

What’s Goverance Got to Do with It?

Over my twenty years in the nonprofit sector I have held different seats at the governance table.

As a member of an all-volunteer organization, I’ve experienced serving on a board that worked essentially as the staff. As an Executive Director of a nonprofit, I experienced a relationship with the board as my boss. While serving as a board chair, I was the leader of the board. In my professional work as a consultant, I am brought in to support boards in reaching their greatest potential.

What have I learned based on my experience in each of these roles? Your organization is only as healthy as your board.

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When boards and board members are working in coordination with staff, the organization has leveraged the talents, and resources of 10-20 more people…for free!

When boards and board members are not working in coordination with staff, the organization stalls out.

I have seen the latter dysfunctional situation often as both a board member and as a consultant.  In these situations, staff start to work around or ignore the board, viewing the board as “a necessary evil.”  Board members wonder why the Executive isn’t “doing as they say.”

So what are the key elements to an effective board-executive partnership?  Although it was originally written for the corporate sector, the work of David Nadler, Beverly Behan and Mark Nadler, published by the Harvard Business Review on Building Better Boards, is a timeless resource for building engaged boards.

Key Elements of an Engaged Board

1. The Mind-Set: Board-building is an ongoing activity, continuous improvement means annual self-assessments.

2. The Role: The board needs to be an engaged partner with the chief executive and playing the correct role for each situation. Is it a fiduciary role, strategic role or generative role? This resource explores the role of Governance as Leadership.

3. The Work: Identify the areas where the board can add the greatest value and focus attention here.

4. The People: The right people are not merely based on technical expertise but other competencies related to programs, external environment, quality of input and style of interaction.

5. The Agenda: Agendas dictate the work of the board. “show and tells” kill board meetings and crowd out time for serious and important discussions. Boards need to find ways to engage with the organization outside of official meetings so “show and tells” during meetings can be limited.

6. The Information:  Boards can be left in the dark by either too much information to digest or information malnutrition. I have seen board tomes of 300 pages! Don’t only be a “recipient” of information but seek it out.  Board members should be encouraged to collect and share information that they have identified externally.

7. The Culture: Robert’s Rules of Order are great obstacles to an engaged board. Use them sparingly.  Engaged board cultures are characterized by candor, willingness to challenge thinking (respectfully), camaraderie, and teamwork.

Where is your board in getting it right?  Take a look at some of the other great resources on nonprofit governance or contact me to discuss next steps in building an engaged board.

Resources:
BoardSource
Blue Avocado
Nonprofit Quarterly