PMA Consulting, LLC

President’s Corner: Why Proactive Collaboration is More Strategic than Reactive Mergers

merger=collaborationFirm president, Patton McDowell has extensive experience in navigating the waters of mergers and collaborations between organizations. With twenty years of background in development and strategic planning, Patton has wisdom from lessons learned and stories of success. As Patton McDowell & Associates focuses on Collaboration this month with our Innovation Series, Patton shares his personal insights about moving from mergers to collaborations.

Collaboration is a buzz word in philanthropy right now. With a strong focus on collective impact within foundations and other grant makers, nonprofits who can merge or collaborate to achieve greater impact are seen as strategic and forward-thinking. Any organization would rather be proactive than reactive in these situations. Unfortunately, PMA has seen too many organizations forced into partnerships that put them in a position of weakness versus strength. Ultimately, this leads to collaborations that fail.

While collaborations and mergers are powerful ways to increase your reach, consider the following measures as you conduct your due diligence in the assessment phase.

  1. Research comparable organizations. Find three comparable organizations in your space and sector, and learn them. This is a good exercise for board members and staff alike. Homework may be conducted through secondary sources or primary connections. These comparable organizations may well be making strategic decisions that could impact any collaboration at this time. Find out what they are doing and what they are planning to see if it illustrates potential for a merger of equal opportunity.

Example: In the Research Triangle of North Carolina, a group of corporations, universities and nonprofits came together to connect different resources around environmental health. The Research Triangle Environmental Health Collaborative in Raleigh collaborates to educate, attract and enhance environmental health.

  1. Study aspirational organizations. It is also advantageous to look at organizations of larger scale outside your community. A national organization may want a presence in your geographical area. The more you research, the more you may be able to negotiate a partnership that is mutually beneficial to both parties. It may be in your interest to partner with the “big kids” in your sector.

Example: Hospitality House in Boone, NC, has used marketing techniques to collaborate with the national organization No Kid Hungry on events in the High Country area. While Hospitality House serves a smaller population, nods from No Kid Hungry have increased their marketing outreach to a national level.

  1. Examine those serving the same population. Look around and see what other organizations are serving the same population as yours. If you are supporting arts opportunities with youth, then how can you collaborate with another organization who serves the same kids? The organization may not conduct the same work as your organization, but this examination could provide opportunities to partner in serving the same population.

Example: In 2007, York Technical College in Rock Hill, SC, created the Entrepreneur Network to “support, encourage and strengthen small businesses through networking and educational events.” The network services surrounding counties and provides a way for York Tech students to collaborate with community partners and small businesses.

  1. Utilize a proactive collaboration strategy. Research organizations with a similar operational state. This may include staff size, budget or site needs. Another organization might need more space, which could result in shared space collaboration with your organization. Another possibility could include sharing a staffing function for back office operations. The power of a larger entity allows you to utilize better technology and resources.

Example: Celebrating its tenth year, the Child and Family Services Center in Charlotte, NC, provides a one-stop location for comprehensive assistance for children and families in need. The building includes shared space between ten agencies and shared support services for accounting and human resource functions.

As you can see from these examples, collaboration is possible in the nonprofit sector. It just requires commitment, research and planning. The activities outlined here may be part of a discreet staff taskforce or even a board taskforce at your organization. Even if your research does not result in the need to merge or collaborate, the exercise is well worth the time to invest in your group and community.