The Bridgespan Group (BSG) released a report in late February 2009 called “Nonprofit MA: More Than a Tool for Tough Times.” In the report, its authors cite case examples of nonprofits that merge based on the following market characteristics:

•    Large number of nonprofits with many small players
•    High degree of competitive pressure
•    Barriers to “organic” growth

Mixed with the above-mentioned conditions, they listed several important cultural and organizational factors to determine merger viability:

•    Strategic fit with services
•    Strategic fit with geography
•    Strategy fit with organizational brand
•    Organization fit: mission and cultural alignment
•    Financial viability

I wholeheartedly agree with BSG’s assessment that mergers should be a tool used regardless of economic conditions. There are over 1,100 programmatic services offered by over one million different nonprofit organizations.¹ As a result, it is an undisputable reality that there many nonprofits, offering similar programs and services, competing for the same resources including funding and talent. Economic crisis or not, nonprofits need to merge and at the very least, collaborate.

I think all organizations considering a merger or collaboration should ask themselves one question and the rest will fall into place after they answer that one question. That question should be: “does this partner organization share our desired outcomes and goals for long-term impact?” This is a question and step that goes beyond considering mission and cultural alignment. All organizations should have a set of desired outcomes that address the following:

•    Programmatic execution
•    Audience/constituent engagement
•    Organizational effectiveness
•    Financial sustainability

Potential merging/collaborating organizations should ask themselves if their outcomes are aligned across all of these dimensions.  If the answer is YES, then the BSG-mentioned characteristics and viability issues should naturally fall into place. If outcomes in these four areas are aligned, there will be less cultural and organizational hurdles for orgnaizations to overcome when they merged or collaborate.

Nonprofit merging and collaboration based upon shared outcomes will allow organizations to serve more constituents and to serve them better. Period.

^{1_{The Urban Institute and The Foundation Center}}