by John Trybus, Managing Director
Large corporate mergers always seem to make the headlines. But beyond those headlines there are other stories being played out between nonprofits that are restructuring and merging for increased efficiency.
The frequent result? Better social value.
Nonprofit mergers are the passion of today’s social strategist Jean Butzen and she knows a thing or two about the process. Jean has more than 30 years experience in the nonprofit sector including much of that time spent as the founding president of Lakefront Supportive Housing, a Chicago-based organization that assisted homeless families. During her tenure Jean led the nonprofit through a successful merger with Mercy Housing.
“We wanted to grow and we wanted to have more impact,” Jean told me about the impetus for the merger. “So we analyzed our situation and realized that we sort of had come to the end of capacity to keep fundraising that growth, that our overhead costs had grown…and we realized that if we really wanted to grow we were going to have to become part of a larger affordable housing organization.”
Today Jean operates Mission + Strategy Consulting and is particularly focused on the subject of successful nonprofit mergers. In our interview, Jean speaks in more detail about her consulting practice as well as her experiences running a new nonprofit that eventually merged and went on to deliver greater impact of services as a result.
Here’s a preview of Jean’s thoughts on successful mergers:
- Before mergers comes mission. A well-articulated mission and explanation of what an organization aims to accomplish cannot be underestimated. “I think sometimes you can lose focus on what it is you are there to do,” Jean explains. Here’s her advance for crafting a mission statement: “A mission statement really should be able to answer two things: it should have a statement that explains what is the end state that you’re trying to bring about and it should have a statement that describes the business you’re in, the business being the primary methods for achieving your purpose.”
- Successful mergers result in the 1 + 1 = 3 equation. The whole must result in the greater than the sum of each part to necessitate a merger. Says Jean: “When we did our merger at Lakefront with Mercy Housing we said that one of our criteria for the merger was that we knew that the sum total of the two organizations had to be greater than what we were doing individually.”
- Smart power is the wave of the nonprofit future. Smart power is a concept borrowed by international relations scholar Joseph Nye which Jean likes to compare to the evolving nonprofit sector. “You’re going to get this very different looking nonprofit organization that’s going to be an exercise of collaborative strategies or strategic restructuring and very effective fundraising,” is Jean’s prediction of nonprofits in the next decade.
Jean acknowledges that nonprofit mergers are unfortunately often deemed as failures on the part of organizations and there leaders, when this couldn’t be further from the truth. She points out that “it’s much better for organizations to merge than to close or to go through a death of a thousand cuts.”
Listen to my interview with social strategist Jean Butzen to learn more about the benefits (as well as the limitations) of nonprofit restructuring and merging for increased social value.