Catalyst Fund Reports: The Promise and Reality of Nonprofit Mergers and Collaborations
New Insight from Landmark Effort to Spur Meaningful Collaborations Among Boston Nonprofits
Boston – January 30, 2013 – The Catalyst Fund for Nonprofits today released two publications detailing how mergers and collaborations can benefit nonprofits and the people they serve:
- The Catalyst Fund for Nonprofits Interim Assessment evaluates progress in the first two years of the Fund’s five-year, $1.9 million effort to support strategic collaborations in the Boston area. It includes lessons learned to-date and details common characteristics of successful mergers and collaborations, as well as red flags and misperceptions that can derail them.
- Merging for Greater Impact: a Case Study of Pine Street Inn and hopeFound shares the behind-the-scenes story of how two of the city’s leading homeless service agencies, Pine Street Inn and hopeFound, have combined efforts, in a merger that was formally announced on January 30, 2012, after an exploratory process supported by the Catalyst Fund.
The publications provide a rare look at the realities of nonprofit mergers and alliances, and are intended to serve as a resource for nonprofits that are considering strategic collaboration. The assessment – the first analysis of a cohort of local organizations considering such partnerships – provides new insight into success factors for collaborations. These include: seasoned CEOs and CFOs, staff and board leadership with prior collaboration or merger experience, and partner organizations with clear and aligned strategic priorities. The report also details how organizations navigate the challenges of myriad interests to achieve the mutual trust and shared goals required for successful collaboration.
“There is perennial interest in nonprofit ‘mergers,’ particularly during times of economic hardship,” said Peter Kramer, Catalyst Fund Manager for Nonprofit Finance Fund. “But the idea that mergers create financial efficiency is a red herring – the true value of successful collaboration is in improving outcomes for the people nonprofits serve.”
The Catalyst Fund provides guidance and money for technical assistance to support strategic nonprofit collaborations and mergers in the Boston area. Since its launch in 2010, it has supported 18 collaborations, and is currently accepting applications for additional projects. The Fund is a joint effort of The Boston Foundation, Boston LISC, The Hyams Foundation, The Kresge Foundation and United Way of Massachusetts Bay and Merrimack Valley, and is managed by Nonprofit Finance Fund.
“Mergers and collaborations can be difficult, time-consuming, and expensive – but the ultimate gains often make good strategic sense,” said Lyndia Downie, President and Executive Director of Pine Street Inn. “The Catalyst Fund helps nonprofits and their funders think beyond an organization’s own walls to explore how to best address the community’s pressing social issues. We hope that others can learn from our experience – the ups, downs and surprises along the way.”
Pine Street Inn and hopeFound merged one year ago after several months of planning and negotiations. The goal of the combination is to align more services and resources to better serve those without homes in the Boston area.
The publications’ launch is being marked today with an event at the Federal Reserve Bank of Boston, where nonprofit and foundation executives will lead a frank discussion of the promise and pitfalls of mergers and collaborations. The event is being live streamed beginning at 9 a.m., and a recording will be available online afterwards: http://www.ustream.tv/channel/tbf-forums
The publications, additional case studies, a link to the archived broadcast of today’s event, and information on how to apply to The Catalyst Fund can be found at: http://nonprofitfinancefund.org/northeast/new-england-catalyst-fund.
About Nonprofit Finance Fund (www.nonprofitfinancefund.org)
Nonprofit Finance Fund (NFF) is a national leader in nonprofit, philanthropic and social enterprise finance. Founded in 1980, NFF provides loan financing, access to capital and direct advisory services that build the capacity and the financial health of nonprofits. A leading community development financial institution with over $80 million in assets, NFF has provided over $250 million in loans and access to additional financing via grants, tax credits and capital in support of over $1.4 billion in projects for thousands of nonprofit clients nationwide. NFF has a staff of more than 60 serving nonprofits nationally from offices in New York City, Boston, Philadelphia, Detroit, San Francisco, and Los Angeles.
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