building blocks

Mergers and Strategic Restructuring

“Alone we can do so little, together we can do so much” ~ Helen Keller

According to the National Center for Charitable Statistics, more than 1.5 million nonprofit organizations exist in the United States. Many organizations have very unique missions or serve very specific geographic areas, but we can all think of examples where organizations with similar missions or serving similar clients are competing for limited resources. But there are organizations recognizing the benefits of cooperation among organizations.

Writing notes

Combining resources through a merger or other strategic restructuring may be one way to increase the strength and reach of an organization while increasing administrative efficiency. But how does one go about exploring and/or actualizing such a significant endeavor? According to La Piana Consulting, it can be one of the most strategic efforts a nonprofit can make. 

There are three areas to such an endeavor and the firm provides an excellent toolkit to help guide the process. One of the first steps is to create a team to shepherd the research and plan development. The makeup of the group should include one or two board members, the executive director, and key leadership team members.

  • The Evaluation – Start with Why

    There are many ways for nonprofits to partner in a strategic way and one is to combine all resources to level up services.  However, understanding the end goal by assessing the intention and viability is key to determining if a merger is that destination. For example, if you are looking to pool a collective knowledge base and eliminate redundant service it may make sense to join forces. How ready is your organization to make such a move?

  • The Negotiation – The Art of Agreement

    Here lies an opportunity to take a deep dive on how the organizations might work together by aligning resources and missions. The ultimate goal is obtaining a clear understanding with parties that the merger will make sense to both organizations.

  • The Integration – Putting the Pieces Together

    At this point of the process is bringing together all the various components to launch the newly merged entity.  It is at this point that proof is in the pudding – success or failure.  It looks at how the board, operations, finances, programs, staff, and infrastructure all sync up to become a fully functional organization.

Another key activity is how to communicate changes internally as well as externally. Staff, volunteers, and program participants should not be surprised by the changes and be part of the process.  Community stakeholders and funders should also be made aware of the merger in appropriate fashion. For example, how and when you notify a foundation that has awarded your nonprofit a large amount versus notifying your donors will have a different timeline and amount of information you will disclose.

As with any great idea, there are also possible challenges and pitfalls to consider.  Some many consider a quick move without practicing due diligence and investigation in the beginning of the process. Here are some other items to consider:

  • Always include staff in the process.
  • Recognize the culture of the organization.
  • Determine the level of confidentiality.
  • Consider the impact on stakeholders.
  • Identify all the costs associated with the merger.
  • Understand the required signatures needed for the documentation.
  • Plan for new systems and integration of staff.

If your nonprofit is looking at a potential merger, consider the strategy behind the pursuit. Are you looking to grow the organization to increase revenue and/or reduce expenses? Conducting your due diligence and thorough planning can lead to a successful collaboration. Knowing all the actions required is also necessary. Knowing how the change will impact your community is equally important.

In our next blog, we will explore some examples of mergers and lessons learned in the process.

RESOURCE LINKS

www.lapiana.org

nonprofitlawblog.com/nonprofit-mergers-tips-traps

www.pnc.com/insights/corporate-institutional/manage-nonprofit-enterprises/nonprofit-mergers-and-acquisitions.html

We can. Just imagine.

The Board Retreat

The retreat is one of the most important activities the board of directors can leverage to assist in fostering a sustainable, successful future for a nonprofit.  However, making it a successful one requires a bit of effort and intention. Do your board members feel inspired and excited after attending your retreat?  If not, here are some tips to make it more fun and productive. 

In an article by Joan Garry, there are three things a board retreat should be:

  • Valuable
  • Memorable
  • Actionable

The question is, how do you hit all three points? Here are several goals to help you create a successful board retreat:

  • Determine your end goal.  Knowing what your desired outcome for the retreat is will help you back engineer the path to get there.
  • It takes teamwork.  The executive director and the board chair co-create the scope of discussion and work for the retreat. 
  • Make it personal.  Convening a group of dedicated volunteers to help define the path of your organization will benefit by knowing a bit about each other.  Include an activity to help set the mood for the day.
  • Go Big.  Retreats are not about troubleshooting operations but are an opportunity to suss out the big issue your agency is currently navigating.  Use this time to take a deep dive into one or two of those matters.
  • You need a driver.  Hire someone to facilitate the session so the board and staff can actually do the work and not be timekeepers.


Joan Garry has put together a handy ‘how to’ when it comes to creating a retreat agenda. Board retreats are about creating a space for level up thinking. It isn’t a meeting arranged to review operations but one to fan the flames (or relight, for that matter) for the passion for the mission of your organization. 





Some ideas for your retreat:

  • Review the mission statement. Does your work match your mission and vice versa?
  • Check in on your strategic plan.  A status check and update on your strategic plan to celebrate reaching benchmarks and planning for the next cycle of activity keeps it front of mind.
  • Location is everything.  The last place you want to have your retreat is in the office of your nonprofit.  Perhaps a board member might open up a vacation home to host the retreat.
  • Be prepared. By taking some time planning for a successful retreat allows for a stronger likelihood it will be successful. For example, prepare some group agreements around using devices during the retreat.
  • Have fun! Board members are volunteers using even more of their precious free time to attend the retreat.  Granted, there is business to attend to, but it is very important to also include some lighthearted enjoyment during the retreat to help keep those creative juices flowing.

NonprofitLibrary.com offers this handy guide to create a successful retreat.  The site is free to join and provides access to nonprofit educational resources.

In closing, if you are going to dedicate a significant amount of time aside, make sure it is worthwhile. Check in with your board members to find out what they would like to experience on the retreat. Your retreat should be well planned and properly facilitated to spur your organization to success.

RESOURCE LINKS

https://blog.joangarry.com/board-retreat/

https://quickbooks.intuit.com/ca/resources/nonprofit-organizations/board-retreats-non-profit/

https://boardable.com/blog/nonprofit-board-retreats-tips/

https://nonprofitlibrary.com/wp-content/uploads/woocommerce_uploads/2020/03/How-to-Plan-an-Amazing-Board-Retreat-1.pdf

People sitting at table for a meeting

Boards Training | Fundraising

Since a large portion of nonprofit revenue comes from fundraising, the board of directors play a major and specific role in that activity. One of the board of directors responsibilities is assisting with the development of an assortment of resources that ranges from people power to donated services to cash donations.

According to an article published by Non Profit Pro, there are several components to doing this:

  • Commitment
  • Embracing the role and setting up processes that enhance it
  • Vetting candidates
  • Training
  • Consistent support

Board members are volunteers who are dedicated to a nonprofit’s mission and donating their time to support it. They also share wisdom and specific talents that support the vision and intention of the nonprofit. For example, a lawyer may not want to serve as a pro bono attorney but rather, steward the organization to ask questions on how to find legal advice. As a board goes about the process of identifying new members, it is imperative that there is a front-end conversation about roles and responsibilities.  This will avoid confusion and misunderstandings as you decide to move along with the process. A key part of this is having honest and open conversations about how money is raised for the nonprofit and the board’s established role in it.  Many nonprofit boards require a ‘give or get’ policy for all members.  This is a very important conversation for the board to have to understand the place for such a policy.

Many people do not like to talk about money, let alone ask for it! Board members are people too so setting them up for success in fundraising is critical. Bloomerang recommends finding opportunities with a solid likelihood of a ‘yes!’ as an approach to build confidence and comfort. Other approaches include using the Kay Sprinkel Grace AAA Way to Fundraising method: Advocates, Ambassadors, and Askers. Basically, every board member is at least one of these and is assigned the role.  The Askers are ‘matched’ with donors that have been pre-qualified by staff as very interested in investing in the work of the nonprofit. Eventually, each member should be comfortable with taking leadership in all three categories but starting with just one and taking an incremental approach makes all the difference.

Perhaps a board member may not enjoy making an ask but there are other ways they can be part of the collective effort:

  • Write three thank-you cards
  • Make phone calls
  • Forward an email
  • Share on social media
  • Invite someone for a tour or to volunteer

Another way board members can help with fundraising is with sharing their stories.  By sharing why they volunteer for your nonprofit, they are conveying a passionate testimonial for the work you are doing in the community.  In turn, this can be leveraged to use in your fundraising messaging to encourage others to donate. 

Although it is the executive director’s job to lead many discussions about fundraising with the board, it is best to tap a designated board member as a champion of that message.  This can be done with the creation of a development committee with very clear roles established as far as areas of responsibility. The chair of that group can work closely with the staff on communicating with and motivating the board to do their individual and collective parts in helping raise money for the organization. 

Finally, recognize board members’ work.  Check in with the chair to do some sleuthing on how each member wishes to be recognized for a job well done and be sure to take the time to recognize those wins on a regular basis.

The bottom line is this:  in order to motivate your key volunteer leaders to do the important work of helping with fundraising, you have to set them up to succeed. Open discussions, access to tools, and accountability are key to that success.

Resource Links

Empower Your Leaders

A nonprofit’s Board of Directors sets the tone for the organization. They serve as the community representatives who are guardians of the mission. They also are legally, morally, and fiscally responsible for the organization.

Many join boards because they are passionate about the mission. They are asked to join the board because they are seen as providing valuable skills and experience to the governing board. But many who join a board do not have a clear understanding of nonprofit administration, fundraising and other board governance issues.

Every nonprofit should have a clear training schedule for their board members including proper orientation, annual training and a budget for individual continuing education. Every board member should know how to read a financial statement, the basics of fund development and how to best serve as ambassadors in the community. Nonprofits cannot expect people to just show up with these skills. You should set aside a portion of each meeting for education in governance and plan an annual training focusing on bigger issues.

Just imagine a group of dedicated, passionate volunteers with the necessary knowledge to be an excellent board member. Training can bring stability to your organization and help individual board members to support a joint vision for the future. JKP Fundraising can help set up a training schedule and provide training for your Board of Directors. Please contact me for more information about board training.