• Four Challenges in Nonprofit Merger Negotiations—and How to Learn from Them

In our 20-plus years of experience helping nonprofits form strategic partnerships, including mergers, we have learned that no matter how good it may look on paper, it’s the people who make a merger work. The process of identifying a partner(s), forming a negotiation team, and designing what the merged organization will look, feel, and act like can be planned and managed with the right know-how. But the conversations that a group of people need to have to get to a decision can be fraught and unpredictable, requiring deep expertise and sensitivity to successfully navigate.

Bob Harrington, Partner and co-author of our Nonprofit Merger Workbooks Parts I and II and Strategic Restructuring Self-Assessment Tool, has written about some of these challenges in past blogs, and we’d like to highlight four of them for you today.

1) Partnership decisions, particularly mergers, are more than a business decision—they can be deeply personal. For founders closely identified with the organization, boards with longtime commitments to the mission, and/or executives and staff whose work-lives are defined by the organization, the risk of change—or even loss—comes with high emotional stakes. This reality is deftly acknowledged in When a Nonprofit Merger is Deeply Personal

2) If the conversations seem too easy, they probably are—don’t let conflict avoidance keep you from really engaging. Even if a merger makes all the sense in the world, part of the negotiation team’s responsibility is to test assumptions, analyze the data, and think through the “what-ifs.” Going-along-to-get-along has no place at the negotiating table. Consider this theme as explored in Avoiding Groupthink in Nonprofit Merger Negotiations. 

3) At some point, the best laid plans must give way to a leap of faith. From readiness and partner assessment, to a robust negotiation process, the preparation that leads a nonprofit to a decision point is designed to be thorough and deliberate. Even so, lingering fears, resistance, or internal politics can sometimes threaten to bring the whole thing to a screeching halt. Cold Feet: Second Thoughts in the Midst of a Merger discusses constructive solutions. 

4) Sometimes merger simply isn’t the answer…but this doesn’t mean the whole experience was for naught. Even if an agreement isn’t made, the assessment and negotiations process has given all participants a deeper understanding of their organization and how it could use partnerships to advance its mission, even if now is not the right partner at the right time, or if there are other ways they might work together short of merger to attain comparable results. Don’t despair, read When Merger Doesn’t Add Up.

So when you encounter one of these scenarios during a merger (or other partnership) negotiation, rest assured that you are not alone, that others have worked through these challenges before, and that good facilitation can help get you to the right result.

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Tags: mergers, strategic restructuring

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