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Tips and Answers
to Your Questions
Deciding to Restructure
Are there any significant benefits realized as a
result of a merger that are not obvious to people on the outside, or
businesses prior to the merger(s)?
A merger can benefit the merging organizations in many ways, not all
of which are necessarily obvious to people or entities outside of the
merged organization itself. What exactly the benefits are depends on
the specific situation, and on what motivated the parties to pursue
a merger in the first place. For example, a merger might provide the
merging organizations an opportunity to strengthen their collective
administrative capacity. Perhaps the merged organization can attract
- and afford - a full time finance person, or a stronger technical
support team, or a more comprehensive human resources function; things
which may have been out of reach for the organizations individually.
Such increased organizational capacity will positively impact the mission-related
work of the organizations, but that effect may not be immediately obvious
to outsiders. Another less obvious benefit might be that the merged
organization is able to offer its employees better support and/or resources,
which may not have an immediate external effect, but will help with
retaining and attracting good employees in the long term.
A merger might also open up new avenues for funding for certain organizations,
depending on the type of work they do, the degree to which that work
overlaps that of other organizations in their area, and the interest
of their funders in organizational partnerships and mergers.
Ideally organizations choose to merge for strategic, mission-oriented
reasons. Also ideally, they come to a merger from a position of strength.
However this is not always the case. We have seen organizations that
do great work, but due to changing environments, the prospective loss
of one or more key leaders, or the loss of a key funding source, face
the prospect of having to cut back services or even consider closing
down. Such an organization may pursue a merger with a stronger organization
in order to maintain its services and mission-related work. If the
merger is successful, the services will continue to be provided as
they were before. In such a case the external appearance that little
has changed is in fact a great thing - it means that the merger was
successful. Without it, the community might have lost access to certain
services, or lost the organization altogether.
Nonprofit organizations exist to fulfill a charitable purpose, and
serve the community in which they operate. A well-thought-out merger
should enhance this ability. If as a member of the community you see
an organization that you care about take part in a merger, and you
are not sure what the benefits are, talk to someone from that organization.
In all likelihood they will be only too happy to explain the benefits
of the merger, or direct you to someone who can. Communication and
celebration are important elements of a merger, and can help reassure
the community that the missions of the merging organizations will continue
to be served.
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