Sometimes no good deed goes unpunished. In this case, the board and staff of both nonprofits did a great job of putting their mission and beneficiaries first, only to be ambushed by their lack of stakeholder communication and buy-in.
- Both Boards had their own strong reasons to merge.
- Benefit to clients and the community at the forefront of merger discussions.
- Early mutual agreement on staff and board structure.
- Merger discussions were solution-focused.
- A consultant served as a third party and helped staff think of questions and processes they might not have considered.
- Initially, one lawyer providing advice to both entities to save costs. Arrangement protected interests of neither.
- Independent lawyer for acquired entity brought into the discussion very very late.
- Inappropriate level of disclosures made early on (i.e., donor lists disclosed at beginning of process).
- Focus was on communications and selling merger plan. Meanwhile, key due diligence had not been occurring.
- Vocal minority on board challenged board’s every decision.
- Inadequate stakeholder communication resulted in serious backlash from key stakeholders.
- Even when process between the boards and staff are generally running smoothly, failure to identify powerful and sometimes non-obvious stakeholders can threaten merger’s success.
- Board’s interest in merging quickly backfired.