Strategic management in nonprofit organizations is an independent publication and has not been authorized, sponsored, or otherwise approved by the owners of the trademarks or service marks referenced in this product. As author and nonprofit consultant thomas mclaughlin caustically observed in his book nonprofit mergers and alliances, to some in the nonprofit field, the idea of mergers is scandalous and distasteful. Steering siemens into the next industrial revolution is the mission of joseph kaeser, who joined the company in 1980 and rose through the ranks of the semiconductor divisions and then into central management as chief financial officer. Critics contend that the different objective function of notforprofits entities should mitigate, and possibly eliminate, competitive concerns about mergers involving nonprofit hospitals. Opinions expressed by forbes contributors are their own. The strategymaking process tends to be reductionist, based. Ever since the economy began to deteriorate in late 2008, ive been hearing stories about how there was going to be a huge wave of consolidations, mergers, and acquisitions in the nonprofit sector. Mergers as a strategy for success toolkit mergers as a. Mergers, collaborations, and strategic alliances national.
Mission and strategy consulting, and eight chicago foundations, analyzed 25 nonprofit mergers that occurred in the chicago area between 2004 and 2014. Yet mergers are not always the right path for nonprofits in financial distress. Before plunging into any strategic alliance, it is helpful to be familiar with common pitfalls and challenges. The competitive effects of notforprofit hospital mergers. Few nonprofit leaders question the value of strategic planning.
Strategic planning in nonprofit organizations a brief overview strategic planning involves choosing the highest priority achievements that an organization is prepared to commit to over a period of three to five years. The civil code, which entered into force in 2002 to replace the 1916 code, defines, in its general part, entities, associations, and other terms that are often confused with the term ngo. Companies are consolidating their product development, production, logistics and business systems so that they can always produce and deliver on a decentralised basis, in a selfdirected way and in real time. Aug 15, 2018 thankfully, there are nonprofit merger specialist consultants and advisors, such as the firm krasneplows, which advised on project enterprise s multiple loan restructurings that were a prerequisite to the affiliation. Mergers and acquisitions for nonprofits accounting, legal. Accordingly, you should notify the irs, by letter to eo customer account. Frequently asked questions about the merger of new jersey. The two examples are simplistic by nature and could in practice be accomplished in either case by a merger or a transaction, but we think they illustrate the difference in intended outcome. When it comes down to it, merging nonprofit organizations is usually quite complicated with many board and management issues and often doesn.
The corporate strategy which answers the question as. In doing so, we tried to build on earlier research, including the one existing largescale study of nonprofit. A strategy screen, he writes, is a set of criteria that your organization uses to choose whether or not a particular strategy is. Realtime strategic planning in a rapidresponse world, 2nd edition. David coined the term strategic restructuring to refer to the continuum of mergers, joint ventures, consolidations, and joint programming through which nonprofits. An organizations mission is a statement of the purpose and the reason for existence of the organization. The strategic alternatives range from corporate strategy through business strategy to functional strategy 59,60,68,1,11,5, 69, 8,15,2,14,53,3. How to merge a nonprofit organization with a corporation quora. In his newest book, the nonprofit strategy revolution. Uniqueness organizations that operate at or near capacity have something special that makes them attractive to the community, clients, and donors. Donorperfect is proud to sponsor this information resource for the nonprofit community. Introduction in nonprofit organizations lessons field. Nonprofit strategy revolution finalist, ben franklin awards, independent book publishers association, business category the world changes continuously and rapidly. In the vast majority of companies, strategic planning is a calendardriven ritual, not an exploration of the potential for revolution.
Mergers are a strategy for organizations seeking to strengthen their longterm financial sustainability, increase the blend and depth of coverage of the. Since then, the realtime approach and others akin to it have gained momentum across the sector, as more nonprofits and funders embrace the value of ongoing strategic. Providing tools, guides, and advice to nonprofits since 1998. Organization management in non profit organizations. How to merge a nonprofit organization with a corporation. Realtime strategic planning in a rapidresponse world. Oct 03, 20 through merging, we could reduce duplication of efforts and mistakes made, so long as our visions were closely aligned. This guide is intended for practical use when actually doing the session. Mar 02, 2017 even the idea of two nonprofits merging still seems alienor worseto many people in the field. Since 1979, he has worked in the nonprofit sector as a staff member, executive director, trainer, consultant, and board member. Revolution and the nonprofit mergers workbooks part 1 and part 2 and our.
As nonprofits consider strategies for the future, it is not unusual for a board or staff to explore the possibility of realigning resources, collaborating to increase efficiencies, or entering into a formal strategic alliance with another nonprofit s. Nonprofit merger research project the metropolitan chicago nonprofit merger research project is a partnership between mission plus strategy consulting, a midwest consulting firm based in chicago specializing in nonprofit restructuring and the chicago foundation for women. Strategic management for public and nonprofit organizations alan walter steiss virginia polytechnic institute and state university blacksburg, virginia, u. If your technologybased nonprofit or charity is considering joining forces with another organization, consider a few lessons we learned along the way. There may be images in this book that feature models. Before deciding to merge, each participant must go through thorough selfanalysis and be convinced that this is the right solution for its restructuring needs. Jacobs has authored, edited or contributed to more than a dozen case for a nonprofit merger than for books focusing on law and policy a business merger because the affecting nonprofit organizations and taxexempt entities. Facilitators guide pdf tools pdf nonprofit strategy revolution certificate pdf. For ease of discussion in these faqs, we will discuss the merger of just two nonprofits. Nonprofit marketing plan template for a twoyear organizational marketing plan produced for getting eupdate and blog readers by nancy e.
Im not a lawyer, but the merger and acquisitions process for nonprofits is similar for commercial ventures. The merging of our two organizations operations was seamless due to the identical nature of our missions. So long as the material is for use within your organization, by all means, use it widely. Some nonprofits pursue mergers and acquisitions to stave off financial duress or to benefit from the stronger operational controls of a larger acquiring nonprofit. The nonprofit strategy revolution offers a nimble and powerful alternative. There are many reasons that a nonprofit should consider a merger, but i thought id share some reasons that should not factor heavily into merger considerations. Making a merger go smoothly for nonprofit workers the.
Indeed, a bridgespan group poll of nonprofit executive directors found that 20 percent of 117 respondents stated that mergers could play a role in how they respond to the economic downturn. Because the nonprofit strategy revolution was written to benefit nonprofit and community. Why is there an uptick in nonprofit mergers and acquisitions. How to build an actionable nonprofit strategic plan template. Its foolhardy to believe that strategies should not do so as well. Nonprofit leaders already know this, but traditional strategic planning has locked them into a process thats divorced from todays reality. Leadership in a crisis situation f or executives, much of their formal training and onthejob learning experiences emphasise the importance of human resource management, the companys market position, its competitors, and the value of collaborative partnerships. You may reproduce the materials on this cd for use in your own organizations strategy formation processes. The recent economic downturn has resulted in decreased donations, dues, and earned revenues at a time when many nonprofit organizations are being called upon to deliver increased services to members, the public, and other constituencies. And because most mergers occur when one nonprofit is in financial difficulty, its easy to feel inaccurately so that merging is an act of failure. Manufacturers that want to retain their competitive advantage in the fourth industrial revolution will increase production flexibility, automate logistics and deploy smart machines and smart products along the manufacturing value chain. Look at your mission and make sure part of it is an achievable stretch goal.
Nonprofit organizations usually merge because one of the charities is having financial trouble or because the groups can more easily pursue their missions by combining forces. However, with the kef registered as a nonprofit in new york and the nkcef registered in virginia, the most difficult part of the merger was negotiating the complicated legal regulations surrounding nonprofit mergers for each. Strategic planning in nonprofit organizations a brief. Merger under state law may result in a new entity or in one of the parties to the merger ceasing its existence. In the forprofit world, efficiency and cost savings are often primary drivers of corporate mergers. A strategic planning process identifies strategies that will best enable a nonprofit to advance its mission. Swot analysis which is a preliminary decisionmaking technique is one of the devices of strategic planning that helps institutions managers to evaluate the strengths, weaknesses, opportunities and threats involved in any business enterprise, including language institutions business 10. The art and science of the deal vii merger journey are presented through the eyes of the board president of one organization, the executive director of the second, and a nonprofit organizational consultant engaged to work with them both.
Nonprofit organization nonprofit organization is not a simple concept to define. They interviewed a minimum of three participants from each. Their stories validate and frame the thinking and feelings. Siemens ceo joe kaeser on the next industrial revolution. Nonprofit mergers take much more time to plan, he says, and usually require few if any layoffs. Nonprofit strategy revolutionary certificate pdf in 2008, the nonprofit strategy revolution, first edition, challenged traditional thinking about how social sector organizations form strategy and presented the realtime strategic planning methodology as one better suited to an increasingly dynamic and fastchanging world. How nonprofits use big data to change the world techrepublic.
The quality of your strategy rests upon the caliber of these three pillars. Lindsay guides and oversees the strategy and execution of all marketing and communications efforts with a major emphasis on strategy and tactics that support increased growth for the organization. A nonprofit corporation can merge with another corporation, including a forprofit corporation or another nonprofit corporation. Ideally, as staff and board engage in the process, they become committed to measurable goals, approve priorities for implementation, and also commit to revisiting the organizations strategies on an ongoing basis as the organizations internal and external environments change. These strategic objectives are graphically depicted in the strategy map on page 12. It is hard to preserve the uniqueness of an organization when it. Why traditional nonprofit strategic planning isnt strategic. Strategic planning for nonprofits national council of. Strategic management for public and nonprofit organizations. Strategic management for public and nonprofit organizations, alan walter steiss. Posts tagged the nonprofit strategy revolution small but mighty.
The theory and rationale for this process are described in greater depth in part 1 of the book the nonprofit strategy revolution. Because the nonprofit strategy revolution was written to benefit nonprofit and community organizations. Ensure leadership and key internal stakeholders are aligned with the merger strategy. The troubled economy has put merging with or acquiring another organization front and center on the radar for the senior managers of many struggling nonprofits. Merging two or more organizations has a major impact on the boards, staff, funders, customers, and the rest of the constituents.
In either case, the irs must determine whether the postmerger entity continues to be organized and operated for section 501c3 purposes. Weve titled this booklet the m word because staff and board members are often reluctant to bring up the subject. Realtime strategic planning is a fluid, organic process that helps nonprofits identify, understand, and act on challenges and opportunities as they arise today, not in six months when the new plan is done. Strategic planning typically involves examining an organizations intended impact and theory of change, and rigorous analysis of the organizations internal capabilities, full program costs, external environment, and donor and beneficiary trends to identify opportunities with the greatest potential for impact. Brazilian national legislation does not bring this term in its entire length. The process of planning emphasizes conscious, thoughtful choices. In 2018, the nonprofit strategy revolution second edition was released. This 10th anniversary edition is a valuable tool for organizational leaders, capacity builders, and students of nonprofit management. This can be composed of two or three individuals with knowledge of, or experience with mergers, but importantly who are respected and trusted by the full board of directors and who have an open mind about a merger strategy. Mergers, collaborations, and strategic alliances printerfriendly version as nonprofits consider strategies for the future, it is not unusual for a board or staff to explore the possibility of realigning resources, collaborating to increase efficiencies, or entering into a formal strategic alliance with another nonprofit s. How nonprofits use big data to change the world by dan patterson in big data on february 8, 2017, 8. Hiring a consultant or advisor can help to keep deal discussions on track.
The nonprofit strategy revolution actionable books. Nonprofit executives, boards, and funders have significant roles in shaping an organizations direction, so their resistance or hesitancy to change can become a significant roadblock. To stay nimble, it may be helpful to revisit strategy on a more frequent basis, perhaps every few months, as part of regular organizational upkeep. Why nonprofit groups merge the chronicle of philanthropy. Many nonprofits are corporations, and use mergers and acquisitions to survive financial hardships or to increase scope, reach, etc.
A strategic planning process should begin with a clear understanding of its key purpose. Nonprofit expert provides free resources for nonprofits of all types and sizes. Realtime strategic planning in a rapidresponse world 9780940069657. But so many important features of the process itself depend on clarity of purpose. Mar 09, 2017 in one fell swoop, change may render your last multiyear strategic plan unhelpful. These are the three pillars every successful nonprofit strategy relies upon. In this article, i will attempt to give you the readers digest version of why the nonprofit sector needs a strategy revolution. Nonprofit leaders already know this, but the traditional approach to strategic planning has locked them into a process that is divorced from todays reality. We provide evidence relevant to this debate by analyzing ex post a horizontal merger in a concentrated hospital market. Nonprofits typically pursue mergers and acquisitions to broaden the range or improve the quality of services. Strategy strategy determines priorities, goals, the service delivery model, outcomes, marketing, fundraising, and technology. Nonprofit strategic planning and frameworks boardsource. The nonprofit strategy revolution is available in print from amazon and barnes and noble.
It is possible that strategic planning can have more than one purpose. In a technical merger, a document is filed with the. Bartell handbook of developmental policy studies, edited by stuart s. From the horizontal consolidation of the manufacturing sector in the late 1800s, continuing through the massive merger wave that swept through major industries in the 1990s, mergers and other forms of corporate restructuring. There are two distinct reasons why there is an uptick. The strategic restructuring process community action partnership.