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Nonprofit Mergers, Acquisitions, and Affiliations

Mechanics of a Nonprofit Merger

Merger proposals are being prompted by reduction of funding sources, the tight economy, the need for succession planning and a desire to consolidate expenses and increase capacity. Also, many funders prefer to deal with fewer providers of the same programs or services and encourage mergers and other forms of collaboration to reduce overhead and increase capacity. There are special challenges for nonprofits considering a merger. Factors, such as increased capacity and cost savings, drive the deal. Because these benefits can be more difficult to quantify, a proposed merger can feel threatening to a nonprofit board who feels they may lose power and influence.

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creating nonprofit chapters and affiliates
Nonprofit Mergers, Acquisitions, and Affiliations

Creating Nonprofit Chapters and Affiliates

Successful nonprofits often look to grow by creating nonprofit chapters and affiliates in other geographic areas, including other countries. Nonprofit organizations organized geographically into chapters

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Nonprofit Mergers, Acquisitions, and Affiliations

Nonprofit Faced with Dissolution? Think Collaboration Instead

Dissolution is something no nonprofit board member or CEO wants to face, however, it does not have to mean failure of the nonprofit’s mission. With the right strategic partner and a will to collaborate, there is nearly always a way to save the programs that provide the greatest benefit to the community.

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Collaboration Case Study – Failed Merger

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.

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Collaboration Case Study Acquisition Converted to Management Agreement

Often, in an effort to save money, clients come to their attorneys with a plan and simply ask them to “draft X.” Frequently, X isn’t the most appropriate solution. This case was one of those. The deal started out as an acquisition with the lawyer (me!) being kept at arm’s length when in fact more involvment early on would have quickly identified that this program was not a candidate for an acquisition, but rather a simple management arrangement.

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