The Benefits of Merging Two Similar Nonprofit Organizations

When most people think of "mergers," they think of big corporate mergers and hostile corporate takeovers. In the nonprofit world, mergers happen to. In fact, with a crisis economy and the competition for volunteers and funding, there can be several benefits to merging two (or more) similar nonprofit organizations or agencies.

It is quite common for there to be overlap in services provided by nonprofit organizations in even a small city or town. As organizations are often started by passionate individuals and citizens, they do evolve over time depending on community need, funding streams, the interests of staffers and volunteers and various other influencing elements. It is not unusual for two or more nonprofits to find that they are basically serving the same clientele, but providing different services or products. Merging can be a good way of combining resources to better serve the community.

By merging two organizations, it is often possible to merge resources'"staff positions can be combined and two office spaces can be combined into one. This can cut down on expenses considerably. Of course, it is probably unreasonable to expect that staff will be ecstatic about the possibility of some lost positions, but if care is taken to not put too much of a workload burden on individuals and to give people time to adjust, it can be a good thing in the long-term.

If there is overlap in terms of donors, you may find that donations increase since donors might give the same amount to one organization instead of doubling it and giving one agency the total amount they used to give to two. What can increase, however, is the grant funding. The organization's capacity may increase with a merger and grantmakers may see it as fiscally creative and far-reaching to have the resources of two organizations bonded together.

Volunteers may also increase and become invigorated by a merger'"it is an opportunity to have more of an impact. It is important, however, to make sure that individuals do not get lost in the shuffle of a merger and it will likely take more focus in the short-term to make sure everyone feels useful and needed in the new merged organization.