In a substantial step to close the information gap about successful nonprofit mergers, Minnesota’s MAP for Nonprofits conducted an in-depth study of 41 nonprofit mergers in that state between 1999 and 2010 and published its findings in “Success Factors in Nonprofit Mergers.” 

The researchers defined mergers as successful if the resulting organizations enjoyed the following outcomes:

·         Improved image, reputation, or public support.
·         Improved, expanded, or preserved services.
·         Increased quality of operations.
·         Increased efficiency of operations.
·         Improved financial stability.
·         Development of a positive organizational culture.

Major factors predicting a successful outcome included:

·         Positive relationship among the executives of the pre-merger organizations.
·         Executive leadership for the merger (95 percent of respondents said the merger would not have happened without the executive’s support; in 80 percent of organizations, the executive director had recently stepped down or was soon to retire).
·         Close pre-merger examination of financial and legal records.
·         Board support (not always easily achieved).
·         Involvement of non-administrative staff in planning.
·         Funder support.
·         Involvement of consultant(s).

Interestingly, MAP found that when at least one of the partner organizations was in considerable financial distress before the merger, staff members integrated more willingly, and the merged organization was more successful.

MAP and its partners have provided an excellent public service by conducting this study.  If you are considering a merger, I hope you’ll learn from Minnesota’s experience, and let me know what you think.

 


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