The Center for Ethics, Governance, & Accountability

The lingering poor economy is wreaking havoc on the fundraising efforts of even the strongest non-profit organizations in communities all across the country. Numerous articles have addressed this issue. The purpose of this article is to address the potential for mergers or disbanding and to advocate a proactive approach within the community to take full advantage of all opportunities.

Our organization, The Center for Ethics, Governance, and Accountability (CEGA) regularly speaks in support of proactive ethical and governance standards as mechanisms to promote effectiveness and highlight positive differences among organizations in the non-profit sector. The issue of merger or disbanding properly falls within our mission under the subject of accountability.

Do we have too many non-profits operating in our community? Well, that depends on who you ask! Anecdotally, we suspect those within the non-profit sector would argue their organization should continue its existence; we suspect those outside of the non-profit sector would argue there is duplication of effort, lack of coordination, and too few charitable contributions to sustain all of the current organizations. We also suspect public opinion is not linked to need or performance, per se, but rather toward the perceptions of too much expense, not enough resources, and not enough results.

Also, anecdotally, we are of the opinion that non-profits are generally not good communicators of the services they provide to the community. If true, poor communications fosters a lack of understanding and appreciation within the community. The vicious circle continues: donors do not support what they do not understand and appreciate.

So, we believe the time is ideal for communities to take a hard look at disbanding certain non-profits and merging others. Every opportunity to improve performance should be explored.

While this is hardly a unique idea, actually developing a process to fairly assess performance and need is politically difficult and socially taboo. However, starting with a realistic understanding of the difficulty is the best approach and should yield the most positive outcome. No cookie-cutter approach will work for all communities.

We suggest that an important axiom be kept in mind: who says merging non-profits – or even disbanding several – is a bad thing to do?! Isn’t it entirely possible that selected reorganizations should actually better serve the community and strengthen currently weakened organizations? We definitely advocate a positive approach to any such community review.

In keeping with the counsel we provide through CEGA, the best-case scenario would be for open-minded, forward-thinking boards of individual non-profits to actually conduct  an internal dialogue and to proactively offer their organization for merger in a strategic manner. This approach demonstrates leadership and takes as much emotion and fear out of the process as possible. It is difficult to argue with an organization who has reviewed its mission and purpose, analyzed its financial strength and its program outcomes, and decided it would better serve the community by merging, or combining forces, with another non-profit. Generally speaking, it is impossible to argue that economies of scale cannot be found through mergers and that efficiencies and improved service delivery would not be realized. We continue to believe that there is not now – nor may there ever be – any less need for community services, so continuity of employment by non-profits entering merger discussions should not be a negative issue.

Is the time right for your non-profit to consider a major change? Have you thought about it? Have you discussed it with your fellow board members or your fellow staff members? If not, the opportunity is right for considering your options now. From the standpoint of accountability, it is your responsibility as a board member or an executive director to create the opportunity for this kind of dialogue in your organization.