On Nonprofit Boards and Mergers

On Nonprofit Boards and Mergers

My Bad?

I’m not anti-board or anything, but it really seems like people look at the board last when a nonprofit is struggling – and self-evaluation isn’t really an easy thing. It would be really hard to say – OOPS – I think I might be the problem; or even for an executive director to say to their board OOPS – it looks like YOU might be the problem.

cogsA Tale of 2 Nonprofits

I’m only thinking about this right now because 2 local Orange County nonprofits announced their merger in the OC Register today. (http://www.ocregister.com/articles/orange-514169-county-merger.html) The story was all happy cheery and Yeah we are going to be so much better now that we are together. I was excited, because both organizations are fairly small and I believe both have been struggling and stagnant – no real budget growth for either in years. The article said the new board of directors had their first meeting this month.

An Old Dance

Except that when you look at the board of directors – they certainly aren’t really meeting each other for the first time. They’ve done the board shuffle with board members that appear to have been on the board for a long time. This usually happens in smaller nonprofits that don’t have really good term limits in place nor any process for passing down information to new leaders. The nonprofit may even have term limits but only for officers. Then each year the same board members get shuffled around into new spots with new titles. But same old board. (See How Your Nonprofit Board Impacts Your Marketing Efforts). And do we really want the same old board if a nonprofit was struggling previously? I think mergers should be a great opportunity to clean house!

Conflicted

And I’m really unsure about how ethical it is to have the President and CEO of a significantly large funder for BOTH nonprofits (United Way of Orange County) as the board president for the “new” board. Even if all the t’s are crossed, there could still be an appearance of a huge conflict of interest. It might not be one of those things that occur very often, but what DO you do when a significant funder is on your working board? Here is an interesting article about funders on boards from Governance Matters.

Abstinence

The best thing about the article was the part where they talked about the benefits of mergers. I’m ALL for nonprofit mergers and nonprofit birth control – especially in Orange County. Too many people – with big hearts – want to start their own nonprofits without really seeing first if their concept is a) already being done in the local area – and chances are it is – or b) a good fit as an add-on or expansion for a similar program already going.

Merging Demystified

Here is a great guide form MAP for Nonprofits: Merge Minnesota – Nonprofit merger as an opportunity for survival and growth.

Here’s an interesting case study on the merger between End Hunger Network and the Houston Food Bank

And this is an interesting study from Forbes Funds – Nonprofits Mergers: An Assessment of Nonprofits’ Experiences with the Merger Process. 

A Video

OK – I had to work hard to find a video on nonprofit mergers that I could watch all the way through without falling asleep:

 

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