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June 2011, Issue No. 20 Newsletter

You Don’t Have to Wait Until the House is on Fire

We often overlook partnerships and collaborations as an effective way to stretch an agency’s resources and leverage its assets. In our experience, agencies working together can frequently accomplish more than by working separately. It is more important than ever to think creatively about how you can serve your clients right now and continue to provide quality services over time.

Collaborations can be a powerful tool. You may be able to fulfill your mission to greater effect and use a potent strategy to help you realize your goals. Instead of building a new program or upgrading your internal facilities management staff, it may be more resource-efficient to find a partner who already does it well.

Read the whole article

Mergers, Collaborations & Strategic Alliances to Sustain Programs

Many nonprofit leaders face tough choices in today’s economy, particularly as they wrestle with the question of how to maintain quality programs while resources dry up. Collaborations, mergers or other types of strategic partnerships might be the answer. We identify the range of alternatives available, provide real world examples, and a roadmap to help you get there. We highlight the key success factors, the pitfalls to avoid, and the decision-making criteria you should consider. Read more to determine whether a partnership strategy is a viable option for your organization and if so, which option has the greatest likelihood of success.
A workshop as part of the Nonprofit Excellence Seminar Series - Managing Nonprofits Through Difficult Times, NY, CT, and MA, May 5-6, 2009. Download PDF of Presentation

May 2009, Issue No. 13 Newsletter

Mergers and Collaborations: Innovations Where All Benefit

With the recent buzz about mergers in these tough times, we wanted to devote this newsletter to what partnerships can do for the communities you serve in any economic climate. Whether you collaborate to sponsor a joint program or merge to create a brand new organization, collaborations can be innovative and strategic ways to serve your community better. We explore how different organizations partnered and reaped real benefits. Try them on for size and see how they might inspire you to consider new opportunities. Send us your collaboration stories so we can share them and inspire others. Read the whole article

October 2007, Issue No. 6 Newsletter

Merger Sticking Points: Key Issues You Need to Address

The most successful nonprofit merger partners always focus on the impact their combined services have on their clients, and how they can serve their communities better. But just considering mission is not enough. Organizations need to address other critical issues for any combination to work. We have highlighted typical sticking points that can derail a potential merger.

What happens to our executive director after the merger? A board wants to make sure that its CEO is provided for once the agency is merged into its partner, so it is usually a key negotiating item. Whether the executive director decides to stay or leave (and we have seen both options exercised), trustees want assurance that their leader is taken care of respectfully.

What happens to the board? Some boards, or at least individual board members, want to maintain their voice and continue to serve. Questions like: how many seats will the acquiring organization provide for members of the acquiree's board; who fills them; and in what capacity; can become very thorny. Addressed upfront and handled diplomatically, the new board can be stronger than either original board, bringing on needed skills and desired expertise. What happens to our critical program? The acquiree organization wants assurance that its core, flagship programs will continue. Often these programs are the reason for the merger in the first place, but sometimes boards seek declarations that money-losing programs will be supported long term or that existing service models will be not be altered.

What about the name? Sometimes it is important that an organization's name be preserved - it may be tied to funding, licenses or other critical assets. A program name may have strong brand recognition in the community. But often the decision is not clear cut and when merged, only a single name will live on. Sensitivity to community concerns and organizational culture are critical ingredients in making a thoughtful, constructive choice.

October 2007, Issue No. 6 Newsletter

Why do You Need a Consultant to Help with a Merger?

Often we are asked why do I need you? The executive director will say, "I already have a lawyer and an accountant, and knowledgeable board members." Experience has proven merger consultants can provide real value to any merger transaction. Working with an executive director and key board members, a merger consultant can:

  • Provide additional resources - consummating a merger, or even exploring the possibility, is like having a second job
  • Supply crucial expertise - doing mergers is our "program expertise"
  • Offer an outside perspective - asking the tough questions, without the ramifications
  • Address the cultural issues - surfacing issues before they become problems, and knowing where to look for them
  • Function as the project manager - developing and managing the work plan for a complex project to its conclusion
  • Coordinate the external consultants - keeping management from being inundated
  • Fill in the gaps - working with all parties as necessary to ensure a successful outcome
  • Be the force of calm, perspective, and reason in a time of change and anxiety

October 2007, Issue No. 6 Newsletter

Merger Truisms: Points to Remember

Every merger is unique; even though the approach is the same, the path and the solutions often differ. We have found some truisms; no matter how long or short, easy or challenging, the merger is:

  • Mergers always take longer than you expect. Mergers can take years from initial discussions to complete integration. Although we have worked with clients to complete them in 6 months, 18 months is not unusual.
  • Mergers are never simple. A merger is more than combining the programs and staffs of both partners. Board composition and practices are affected; funders have influence; community stakeholders want to have a say; and systems and procedures vary.
  • Expect the unexpected. The due diligence process will uncover all the dirty linen. We have discovered fraud and malfeasance, found the missing mortgage document to obtain clear title to a building, and determined an organization's insolvency, leading to a transfer of government contracts and folding up the nonprofit.
  • Mergers are not for the faint of heart. Everyone is affected, whether staff, management, or board. Mergers are complicated, time-consuming projects that involve change and uncertainty, different cultures and expectations. Upfront planning and clearly articulated goals go a long way in reducing the bumps in the road.

March 2006, Issue No. 1 Newsletter

Transitions: The Ugly M(erger) Word

A funder came to us recently when he knew a grantee had been approached about a potential merger. The opportunity was exciting, but the ED was stretched already, overseeing a major capital renovation. Mergers are always complex, often have surprises, and take a lot of management and board time, so it helps to bring in experts with prior merger experience. Working with our affiliate, The LaGreca Company, we structured, then conducted a due diligence review. We worked with both organizations, analyzed programmatic and funder overlap, financial and cultural issues, potential risks, recommended how to restructure a combined organization, and identified the key decision issues for the Executive Director and board of the larger organization. Ultimately, we helped structure the joined organization, and soon will turn our attention to achieving a successful implementation.

We believe the nonprofit sector will see more and more mergers as competition for funding increases and executive directors begin to retire.

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