The “New Math” of Non-Merger Partnerships

In the past few years, we have seen growing interest in non-merger partnerships. More and more, nonprofits are seeking opportunities to reap the benefits of a formal collaborative relationship without the full integration that a merger typically entails.

What many organizations may not realize, however, is that partnerships like joint programs can, in some ways, actually be more complex than a merger. In a merger, two or more entities are brought together to become one. Usually, one of the partner organizations remains as the surviving legal entity and the other(s) are dissolved, or (in a less common configuration) all dissolve after creating a single new organization to carry their joint mission forward. Either way, the result is the same: a single nonprofit entity with a unified mission.

1 + 1 = 1

But with a joint program or other non-merger partnership, you are not only preserving each of the partner organizations, but adding the partnership itself (whether a joint program or even an entirely new freestanding entity).

1 + 1 = 3

This brings with it a number of challenges. When launching the new venture, for example, the partner organizations’ attention will be split between their ongoing operations apart from the collaboration and the collaboration itself. This can also set up competition for resources when organizations need to sustain themselves and secure resources for the collaboration at the same time.

Another complication is that rather than investing in a new shared culture, the partner organizations may maintain a very different culture apart from the collaboration than they espouse within the joint venture, which can be confusing for the staff and board as well as external stakeholders.

As complex as mergers can be, it is important to acknowledge that joint programs and other collaborations often take just as much planning and attention, if not more so. Whether pursuing a merger or a non-merger relationship, it takes care to ensure that the partnership adds up to more than the sum of its parts.