Trends in Nonprofit Mergers: Part 2

We’re continuing the conversation about the latest nonprofit trends with Lara Jakubowski, Partner, La Piana Consulting, and Maurice Bostick, Director of Strategy & Innovation, Boys & Girls Clubs of America. In part 1, Lara and Maurice talked about the nonprofit financial rollercoaster and the ways the field is evolving. This week, we’ll dive into the impacts of the great resignation and what’s next in nonprofit merger trends.

Great Resignation

We’ve seen a lot of turnover in nonprofits lately. CEOs are retiring and staff shortages are rampant. We’re hearing from many service-oriented nonprofits that they are struggling to meet staff needs and fill vacancies. This motivates nonprofits to consider mergers because it may position them to better address staff needs and provide opportunities for professional development. When two smaller organizations join forces to become larger in scale, they may be able to build fundraising capacity or compete for bigger contracts which can result in the ability to provide more livable wages and competitive benefits. This also provides leverage to compete for staff in a tight job market.

CEO transitions are always a good time to consider strategic partnerships. With a tidal wave of CEO turnover, many organizations are finding this an opportune time to look at partnership. There is also the reality that recruiting today’s top-level talent is expensive. A single smaller organization may be limited in their ability to pay for top level talent. However, if two or more organizations join forces, they are able to afford more experienced professionals they might not have been able to recruit on their own. Mergers can expand organizational capacity and infrastructure, especially for executive leadership and resource development roles. The next wave of nonprofit leaders are coming from non-traditional and corporate backgrounds and bring new perspectives into the leadership roles that they take on. Nonprofit mergers create scale and organizations who hold a larger footprint can better attract key partners, top leaders, board members, and staff.

What’s Next?

What happens next with all of the gains nonprofits have experienced over the last few years? We’re all hearing about inflation, which is also hitting nonprofits especially hard. All these factors are hitting nonprofits in different ways. While some nonprofits benefited, others will need new strategies going forward. It will be even more important for nonprofits to be strategic in their planning. Mergers and other forms of collaboration are not the only strategy, but worth consideration because they are a strategy that can accelerate and expand your impact in ways other strategies just can’t do.