Photo by Jim Harris Studios
“Merger” is a scary word.
But if you’re a nonprofit that’s barely scraping by — whether it’s because of limited resources, scarce funding opportunities or a duplication of other organizations’ efforts — combining with someone else could be a viable option for staying alive.
Sure, there might be the lingering fears of legacy loss, job loss or the perceived failure of mission. But does such a change need to be wholly negative?
That’s where the newly formed Nonprofit Repositioning Fund comes in. Launched just last month, the Fund serves as a catalyst for conversations between area nonprofits with topics that could range from partnership opportunities to back office and staff sharing to, yes, mergers and acquisitions. In rare cases, closings, or dissolutions, will also be considered.
The Fund will offer grants to nonprofits exploring these options, including “Exploratory Grants” of up to $40,000 and “Implementation Grants” of up to $100,000. “Seed Awards” of up to $2,500 will be offered on a “discretionary and confidential basis” — funders don’t need to know those initial conversations are happening.
Founding members of the Fund include The Philadelphia Foundation, The Barra Foundation, United Way, the William Penn Foundation, the North Penn Community Health Foundation, the Scattergood Foundation and The Lodestar Foundation.
A major goal of the Fund is to “routinize” conversations about organizational repositioning in order to help organizations become “stronger and, ideally, more sustainable, high-performing and delivering on their mission by virtue of taking advantage of some select options to collaborate,” explained Nadya Shmavonian, the Fund’s new director.
Shmavonian, statuesque in the way that makes her look like she has weathered storms, said this while leading a panel called “Capacity Through Collaboration: Harnessing the Power of Strategic Collaborations to Strengthen and Sustain the Nonprofit Sector” during Philanthropy Network Greater Philadelphia’s Sparking Solutions Conference recently. Indeed, Shmavonian herself has lived through a dissolution: She was the president of 35-year-old Public/Private Ventures, a nonprofit that conducted research for the improvement of social programs, when it shut down in 2012.
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David Gould, now a program officer at the William Penn Foundation, had also been a staff member at P/PV. It closed well, Gould said during the panel discussion: Employees were given several weeks’ warning and found new places to work because the organization had had good standing.
Patricia Wellenbach, another panelist, has been through two major organizational shakeups in the past year and a half. Green Tree School and Services, which serves students with special needs and of which Wellenbach was CEO, “teetered” on the decision of dissolution after an unexpected funding loss. Just two days before declaring bankruptcy, Wellenbach was able to locate funds to keep the organization running. The threat took its toll, though. She stepped down from her role, an act that Shmavonian called “a measure of heroic leadership.”
“In the end, she ensured the mission continued and ensured it was sustainable and ensured those children have a place to go to school this year,” Shmavonian said.
Conversely, Wellenbach also served on the board that led Abington Hospital to merge with Jefferson Health System in May, a mutually beneficial move that was executed “with thoughtful planning” and not in crisis, she said.
“How do you balance mission as you’re making the critical decisions and a willingness to be a little bit fearless?” Wellenbach said. “You need to be fearless because it’ll give you the ability to let go of a few things, in no particular order: people, programs and history.”
Shmavonian pointed to this year’s consolidation of the Fairmount Park Historic Preservation Trust into the Fairmount Park Conservancy as another example of a positive merger because the organizations had previously shared a closeness in missions and fought for the same funding.
Not all inquiries made to the Fund will echo these examples and result in a merger or dissolution, Shmavonian stressed; more likely, most discussions about repositioning will go nowhere. Still, it is important for organizations to have those discussions, she said. Succession planning, for instance, should be considered annually to prepare for leaders’ sudden departures. But in 2014, two-thirds of nonprofits did not know who would replace their top executive.
The William Penn Foundation, for one, is “excited” to be a contributor to the Fund because it invites the funders to provide a more welcoming environment for nonprofits to talk about their repositioning needs with them, Gould said.
“A real asset that the Repositioning Fund brings is a safe space to have those conversations,” he said, “and I hope that it is encouraging organizations to have those conversations in a more intentional way.”-30-
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