A trend we are seeing, and which may actually represent more than our imagination, is that a number of national organizations are undertaking the consolidation of their local affiliates into fewer, larger entities.

As an example, over the past five years, the Alzheimer’s Association has gone from more than 300 affiliates to less than 90.

Girl Scouts of America is going through a similar restructuring, and many, many other national organizations are as well.

The reason for such diverse groups all pursuing the same consolidation agenda is remarkably consistent—the desire for greater impact. Smaller affiliates tend to be less robust; they experience financial difficulties more frequently, and require greater and more frequent intervention by the national office. Larger affiliates may be able to capture more donors, more participants, and more media attention.

What is unique about this phenomenon is that it is driven by the national office of these organizations, which makes the negotiations between parties at the local level more complex.

So, to answer the question I posed in the last entry, there might be an overall increase in the frequency of nonprofit mergers, or it might just be that your nonprofit is involved in a merger, and that is usually quite enough!

Given the nature of La Piana Associates’ work, I am often asked variations on the following question: “Is the number of nonprofit mergers increasing?”

I have been asked this question by journalists writing articles on the “phenomenon” of nonprofit mergers, by nonprofit board members undertaking a merger, by funders being asked to support the costs of a merger, and even, once, by my wife.

The question places me in a difficult position. I am supposed to be an expert in this area. I have written books on the topic. I have facilitated something close to 100 nonprofit mergers. In short, I should know the answer to this simple question.

Years ago we tried to ferret out real data, to establish a baseline at some historic point and count from there. It is a long story, but eventually, we gave up. The short answer: the way state and federal records report the birth, death, and merger of nonprofits is too uneven and inconsistent to draw any conclusion from the public record.

I could extrapolate from our firm’s experience and say, yes indeed, there are more mergers today than there were five years ago. But that is like a heart transplant specialist, seeing his practice grow as his reputation spreads, proclaiming that there is an epidemic of heart transplants.

Mergers are a sizeable portion of our business, and, as our firm has grown from 3-4 staff to about 15 at present, it makes sense that we are seeing more work of all kinds, including mergers.

More on this in my next entry. . .