Case Studies
Mergers

Mergers between Domestic Violence Agencies

In 2003, La Piana Associates facilitated two sets of merger negotiations between two pairs of domestic violence agencies located in the San Francisco Bay Area. As hoped, the mergers enabled both of the newly merged organizations to reduce overhead costs and increase their capacity to deliver services. An unexpected result in both cases, however, was the profound effect on the size and strength of their boards, the programs and services, and the culture of their organizations.

Background on the Mergers

Board members from Sor Juana Inés (SJI) and the Center for Domestic Violence Prevention (CDVP), both located in San Mateo County , entered into merger negotiations in order to explore ways to strengthen and ultimately broaden their reach. At the time of negotiations, there was no executive director at the helm of either organization. The Board Chair for CDVP and the Vice Chair for SJI were the champions of the merger process.

About twenty miles away, in Santa Clara County , WATCH and Next Door Solutions to Domestic Violence were also exploring ways that they could better serve their clients. A merger was under consideration by a negotiating committee composed of the executive director and board members from both organizations.

In the spring of 2003, the boards of SJI and CDVP approved a merger. In what had become a weak economy and a difficult fundraising climate, the board members hoped that by reducing administrative overhead costs, overlapping services, and competition for funding, the combined agency would be able to deliver services more efficiently and effectively. A new executive director, Melissa Lukin, was hired, and in the fall the merged agency took a new name, Community Overcoming Relationship Abuse (CORA). While SJI had focused exclusively on the Latino population, CORA hoped to maintain its focus on the Latino population while expanding its reach to serve all of the county’s diverse populations. Beyond their desire to save money on overhead expenses, the board members also hoped to improve the organizational infrastructure and maintain – or enhance – their unique cultural competency.

Meanwhile, the boards of WATCH and Next Door Solutions to Domestic Violence Prevention approved their merger in the fall of 2003, and the agency changed its name to Next Door Solutions to Domestic Violence. The board hoped that the merger would reduce administrative costs, open up new funding opportunities, create a seamless delivery system for clients, and secure them a strong, visible position in the community. The executive director of WATCH left to pursue other opportunities and the executive director of Next Door Solutions to Domestic Violence Prevention, Kathleen Krenek, assumed the leadership of the combined agency.

Outcomes of the Mergers

A year later, neither CORA nor Next Door have eliminated any programs or services, and both organizations have realized cost savings. Both organizations have a stronger infrastructure and are poised to deliver enhanced or expanded services. Community support has been strong for both agencies, and team building activities have strengthened the staff. The boards are also stronger. For both organizations, the most significant challenges have been in the areas of communications, funding, and developing a new organizational culture.

Since the merger was approved, CORA has realized savings of about $160,000 by eliminating administrative duplications. The savings have been applied directly to grow existing programs. CORA strengthened its infrastructure by developing a visioning group and process for making decisions and by promoting internal communications.

Next Door has also reduced overhead by eliminating duplication. “We are paying rent only once, for example,” says Kathleen. “We had to bring salaries up to match the other agency, and that cost us a lot of money, but we are still under budget. The programs formerly run by WATCH are now more efficient because we’ve been able to streamline them. We have the same number of staff, but we are asking people to take on more responsibility. We are looking at making some changes that will further reduce costs.

Both executive directors stress that board development was a benefit of the merger process. Kathleen notes that “the upside is that there are now stronger board members than this organization has ever had before, and they are helping to get more work done in less time.” Similarly, Melissa says that “we are currently working to strengthen the board and have already grown it from 8 to 21 members. The board has developed a sophisticated communications and marketing strategy about the merger and is now busy working on a social marketing campaign for the agency.”

Impact on Fundraising

CORA positioned the merger as a fundraising opportunity. Senior management hit the road with a presentation about the merger and its advantages for funders and high-level individual donors. “People were truly interested, and the county seemed interested too. We had been concerned that a merger would cause us to lose funding, but proactive communication helped. We were able to work with key funders to develop a policy that prevented counties from cutting funding to merged agencies. The new policy dictated that when agencies merged, they would receive the same level of funding they had received previously.”

Like CORA, Next Door also used the merger to increase its fundraising efforts. Next Door found, however, that the effort was more challenging than they had expected. “Funders did not respond the way we had hoped. We hoped that we could have seized the opportunity and seen a lot of money coming in, but we weren’t the darlings we thought we would be. The community has been very supportive and I never hear anything negative, it just didn’t translate into the money we thought it would.”

Beyond fundraising, the most significant challenges for both organizations were in the area of communication and cultural integration. “Initially, the difficulty arose because the executive director at WATCH was absent,” says Kathleen. “The staff didn’t know much, and we didn’t approach the cultural transition with as much sensitivity as we needed to.” This created some resistance amongst staff of both organizations. “The resistance on the part of the WATCH staff was unexpected. I had assumed they had all the information and had worked out all their issues, but there was a lot of resentment, and we seemed really insensitive when we came in. It was really difficult to keep everyone in the same level of communication — keeping them informed but not confused.”

Reflections on the Mergers

Melissa says that if she had it to do over again, she would have talked to staff about their experiences and desired outcomes at the beginning of the process, instead of believing what she heard from board members when she assumed the post as executive director. She also would have been clearer with new board members about their role in fundraising during the merger process and during integration. “Despite the fact that the CORA board is full of terrific folks, the expectations around fundraising during this process just weren’t clear.

Kathleen believes she would have handled at least two things differently. “I would have brought funders in early to get them invested and let them feel that they were part of it.” She says that she also would have worked harder to communicate with staff. “The negotiating committee could have and should have gotten assurances that staff was, in fact, well informed. We should have underscored that their buy-in was as important as the board’s buy-in, even if they didn’t have a vote. The staff at WATCH either wasn’t well informed or didn’t feel well informed; I don’t know which it was.”

Kathleen also has some advice for other organizations regarding strategic restructuring. “Be open; have meaningful board involvement and meaningful staff discussions even if you don’t have all the answers. Make sure that people understand that this is a big thing. Don’t minimize the need to understand our differences and appreciate them – that’s an institutional value, and those differences are going to appear as obstacles instead of opportunities. You have to be prepared to communicate very clearly with the community. Also, take time to celebrate because as hard as it is, change is good and we need to embrace it.” Lastly, she stresses the need to have a champion of the process, “someone at the top,” and the reality that a strategic restructuring process takes a lot of time. (Kathleen estimates that the process took an additional 30 to 40 percent of her time.)

Finally, Melissa and Kathleen underscore the need to go into a strategic restructuring process with an open mind and a constant focus on the mission of the organizations. When the process presented challenges, it was important to remember that, ultimately, it is battered women and their families that would benefit from the organizations’ hard work. Kathleen notes that even when challenged, the board of WATCH was always able to focus on the mission. She recalls a comment from the board chair that “what we care about the most is what happens to battered women, not what happens to the agency.” Kathleen notes that this comment reflected a “true generosity of spirit and commitment, and that element raised the moral imperative and led to our success.”