Cross-post: How to Discuss Merger Exploration with Grantees

  • By Amia Grashin and Lara Jakubowski, September 16, 2020

In the COVID-19 world, funders may increasingly find themselves in discussions with nonprofit partners about merger exploration as a potential way to ensure that mission and organizational needs continue to be met. We are seeing an upswell of interest and are encouraged by the sector’s willingness to provide funding for sustained collaboration efforts.

Concerns have always existed among nonprofit leaders and boards about mergers. Fears include the perception that integration with another organization is an admission of failure, potential loss of autonomy, the time and cost involved, and the ability to maintain program fidelity. These worries are understandable, but in our 20+ years of experience with facilitating processes with client, these concerns are often readily addressed. However, it is more important to avoid the perception that funders are pressuring nonprofits to consider a merger. Shotgun weddings rarely work out.

What is the best way to approach this sensitive topic? First, assess grantee readiness for the conversation. Is merger something they raised as an option? If not, consider a more general discussion about organizational health. Some helpful questions to ask may include:

  • Does your organization have a strategic plan, and if so, has it been refreshed for the COVID-19 era with a focus on adaptability?
  • Would an organizational assessment tool help identify if there are operational areas that need support?
  • Would scenario planning be helpful to better prepare for the organization’s future financial position?

A general discussion might lead nonprofit partners to think more about merger exploration as a strategy. If not, consider inviting them to read more about mergers and alliances after doing their homework.

When speaking with those open to the idea of a merger but unsure where to start, offer examples of success stories in your community. Share available information about the process, timeline, costs, and challenges others have experienced. Provide resources to help ensure alignment of staff and board about proceeding. We find that much of the initial fear and uncertainty around mergers can be alleviated with real-life success stories like Race Forward and Sierra Community House.

However, if the organization is familiar and comfortable with the merger concept and has considered exploration in the past, focus your discussion on what did and did not work to create a new lens. Generative questions may include:

  • What lessons were learned in past processes?
  • Are there potential organization(s) in mind?
  • What are the key criteria in considering potential partners?

If the nonprofit is highly motivated, has a partner identified, and is ready to jump in, explore whether the staff and board are in alignment about pursuing a merger. Ask about the shared vision and flesh out the following points:

  • Is there an ideal timeline?
  • What strengths does the grantee bring to a potential merger?
  • What are the desired outcomes?
  • What major challenges would need to be resolved within either organization prior to merging?
  • What questions would need to be answered in a negotiations process?

(Resources referenced in graphic: Critical Issues Worksheet, The Power of Possibility, Motivations Worksheet, Readiness Discussion Guide, Concerns Worksheet, M&A Toolkit)

The goal of any discussion about merger is to instill your grantees with confidence that they are making a strategically sound decision with the mission in mind and offer reassurance that you will provide support throughout the exploration process.

Check out our recently updated Merger and Alliances Toolkit and let us know if it resonates.

Amia Grashin

Associate Consultant

Amia helps design and deliver well-organized engagements and high-quality work products that support clients in achieving their goals. Her contributions to project teams include research, writing and editing, and expert project management. She excels in ensuring that complex projects, initiatives, and events run smoothly and efficiently, often anticipating and addressing potential issues before they arise. Her work on written materials and presentations reflects keen attention to detail, understanding of organizational dynamics, and the ability to identify what is most important for project success. In addition, Amia plays a critical role in managing the firm’s day-to-day business operations, including systems and communications that support a geographically dispersed staff. She has a BA in Global & International Studies/Women’s Studies from the University of California, Santa Barbara, and also studied at Victoria University of Wellington in New Zealand.

Lara Jakubowski

Senior Consultant

Lara works with nonprofits to address organizational issues and partner with others for sustainable impact. She specializes in working with complex collaboratives working toward shared goals, helping them identify successful strategies and design plans for action. Building on her past work with the Nonprofit Centers Network, Lara has an abiding interest in improving the performance of promising collaboratives. She is also highly motivated by the question of how nonprofits can adapt their strategy to a dynamic environment and seeks to help clients think ahead to identify new challenges and opportunities. Lara has an MBA from the Wharton School of Business and an undergraduate degree in economics and regional science and Japanese from the University of Pennsylvania. She is a past board member of Denver Community Ventures and looks forward to her next opportunity for board participation.