FIVE WAYS FOUNDATIONS CAN SUPPORT NONPROFIT MERGERS

Submitted by giarts-ts-admin on January 16, 2009

With the economy in the toilet, the topic of nonprofit mergers is on the rise in the foundation community. Here are five quick ideas for how foundations can help make mergers happen:

1) Combine. Make it known that if two existing grantees agree to merge, you will guarantee them a multi-year grant for a total of at least 150% of the combined current amount of your funding.

2) Cash out. Offer to provide an ED with a year of severance pay if they merge their organization with another and are willing to cut her/his own job (i.e. have the other ED become the head of the combined organization).

3) Consult. Create a publicized merger fund to cover the cost of hiring a consultant to identify merger opportunities for any current grantee.

4) Conspire. Partner with other foundations supporting an issue area (e.g. early childhood education) and agree to tell your grantees together that you will be making 75% fewer grants going forward but each grant will be 400% of your average grant last year.

5) Connect. Host an event for all the board members of your grantee organizations to educate them on the need for mergers, have them meet their peer board members and start discussions.

BONUS IDEA: Lead by example and merge with another foundation to show how you were able to cut overhead costs by 50% and therefore give out more money to the community. You can even use idea number two (cash out) and give the cut staff a year of severance pay.

From the Pro Bono Junkie’s Blog by Aaron Hurst.