In recent years there has been a lot of talk in the funding community about reducing overhead expenses of nonprofits by eliminating redundancies. Quite often this is intended to mean mergers. Setting aside the question in any given case of whether a merger really makes as much sense on close inspection as it does as an outside idea, there are at least two major hurdles for mergers: it is very difficult to get executive directors and boards interested in pursuing them (for all kinds of reasons), and if a merger were to be consummated, the operational, strategic and cultural integration is daunting (also for all kinds of reasons).
A much easier way to reduce wasted efforts and resources is some form or other of collaboration. Nonprofits can work together to extend their reach and increase their effectiveness in serving their mission at a number of different levels:
At the most basic level, separate organizations providing services for the same population may be able to serve their missions more effectively by coordination. This can be a matter of simply sharing calendarssoup kitchens serving meals on different days or times, independent schools consulting on snow days, organizations avoiding scheduling conflicts for fundraising events.
Beyond an arms-length scheduling relationship, organizations may be able to find common ground for cooperation. Performing arts groups or venues can jointly host a festival. Social service agencies have found it advantageous to discuss and agree on the array of services they providedifferentiating services, geographies or populations. Similar organizations gain valuable insights by pooling a wide variety of data in benchmarking consortia.
At the next level, nonprofits collaborate to achieve a goal that neither is capable of alone. Some advocacy organizations routinely form coalitions to integrate strategy in publicity, lobbying, or other action. Cultural organizations come together to create joint exhibitions and performances on a timely theme.
When a collaboration seems like a good long-term idea, organizations may enter into a more formal joint venture arrangement. This degree of integration shares some of the pitfalls of a merger, however, and should be examined very carefully before entering into contractual arrangements. One example from our work of a joint venture is Heritage Harbor Museum. Nineteen or so small organizations joined forces to form a collective museum. This was an inspiring idea that turned out to be much more difficult to realize than any of the participating organizations realized.
More on working together in a future post.