Merging with the right organization(s) can transform the sustainability and effectiveness of a nonprofit. However many struggle to understand all the ways a merger will impact their organization. With over 20 years facilitating mergers, we’ve identified three common misconceptions to learn from.
Misconception #1: Only the Business Side Matters
Leaders often view a potential merger through strictly a business perspective. While important, the business factor isn’t the only critical component of a successful merger. Determining whether a merger makes sense from an organizational culture perspective is just as vital, although its importance is often overlooked or not even considered by nonprofits weighing the merits to merge.
Misconception #2 Similar Always Is Better
Nonprofit leaders considering a merger often say “we seemingly have the same mission and the same people.” While like-mindedness is a good reason for organizations to merge, often it’s contrast that can create even more value.Similar to how a championship sports team possesses players who excel in different roles that complement and enhance the entire unit, organizations can benefit from merging with nonprofits that bring new strengths and resources.
Misconception #3 Mergers Are An Opportunity to Save
There is a misconception among nonprofit executives that merging guarantees an opportunity to save money. While yes, sometimes you will have economies of scale, that’s not a compelling enough reason to merge. Instead of looking at a merger as an opportunity to save money because you won’t pay multiple employees working the same position, use your resources to purchase better systems that benefit both organizations.
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