Funds

Earlier this month, we highlighted examples of philanthropic prizes directed at advancing collaboration among nonprofits. The creation of special purpose funds is another strategy funders are using to support nonprofits in exploring strategic alliances and restructuring.

When parents called upon autism organizations in Toledo to create a more integrated and easily navigated system, these organizations turned to the Strategic Alliance Partnership fund, a collaborative funding pool created by the Toledo Community Foundation, the Stranahan Foundation, and the United Way of Greater Toledo, which supported a planning process to define how they would work together. This led to the creation of the Toledo Regional Autism Network (TRAN), a formal collaborative of sixteen organizations involved in delivering services to those with autism, their families, and caregivers.

Other foundations have designated or set aside funds to a similar purpose. The Forbes Funds in Pittsburgh supports strategic restructuring through its Innovation Fund, and in New York the Dyson Foundation has committed resources through its Nonprofit Strategic Restructuring Initiative.

In some regions, foundations have pooled funds to support strategic partnerships. The Catalyst Fund in Boston, and the Community Catalyst Fund in North Carolina are two examples that have supported a range of mergers, administrative consolidations, and joint programming. Although many of these funds are open to all types of nonprofits, the California Catalyst Fund was created by the California HealthCare Foundation and Blue Shield of California Foundation to underwrite technical assistance for primary care clinics involved in restructuring through existing or new partnerships.

We have worked with several foundations that have launched strategic restructuring funds. Creating these funds offers a ready resource when organizations decide to move forward with exploration or negotiation of deeper partnerships. Their presence also signals that this is a strategy the foundations endorse.

While funds have been attractive, there are some foundations that have decided they want to take a more active role in encouraging partnerships in their community. These foundations have either individually or in collaboration with other funders launched major initiatives. We’ll describe some of these in our next and final installment in this three-part series.

In many merger explorations there is a time when one or both of the organizations experience some level of cold feet, usually toward the end of the process. This is understandable, given the serious nature of a decision to “get married.” Is this the right partner? Is this the right time? Will we be better able to meet the challenges of the future through this merger vs. staying independent? These are all questions that naturally come up in the process of merger exploration.

I remember my wedding day. I was standing at the altar, waiting for my bride to walk down the aisle. The organist was playing Pachelbel’s Canon in D (very popular 30 years ago). The organist played it through, and started again. No bride. He played again. No bride. My best man leaned over and said, “I think she has cold feet.” Yikes–now? Well, fortunately that was not the case. It turns out that the flower girl with a very nervous stomach had gotten sick on the wedding dress. So after a quick clean up, the wedding proceeded.

Nonprofits working through the issues of a potential merger often have some nervousness as they near a final decision. This could be due to a collective concern or may be an issue brought forward by an individual board member. It is to be expected, given that this may be one of the single greatest decisions in the life of the organization. Organizations are correct in questioning whether merger is the right move. But often the concern that is presented at the last minute in these cold feet situations is related to an issue that has already been thoroughly vetted and agreed upon.

When this happens, the best way to proceed is to acknowledge the reality of the concern, and not to make light of it but to treat it as a serious issue to be worked through. The consultant may go back over the issue with the group, confirm the original recommendation, and allow time to talk through the specific issue. Often the party or parties raising the concern just need time to get more comfortable with the final decision to merge, or it may be that a recommendation needs to be revisited and reconsidered in light of either new information or just simple nervousness.

In most situations, allowing the process to revisit areas of concern will help the organizations deal with the issue. At times, it can open up other concerns that had not yet been expressed. In either case, it is best handled with respect for the person(s) bringing up the concerns and the issues at hand. There may be a need for some one-on-one meetings and off-line conversations to consider the issues and to go back over the agreements and logic of the recommendations.

Ultimately, and in most cases, time and additional (sometimes targeted) discussions are all that is required to work through the issues–and finally say “I do!”