Mergers Are Better for Growth than Economic Gain
One of the best ways to learn about nonprofit mergers is to read about other people's experiences. One very thoughtful piece I have recently read is called From Corner Cafe to Corporation: The Inspiration Corporation Merger Experience, which highlights the benefits of a merger as a strategy for growth. The paper was published by Inspiration Corporation, a Chicago-based nonprofit dedicated to ending homelessness through supportive services, employment and training, and housing programs. Inspiration Corporation completed two mergers with two separate Chicago nonprofits: The Employment Project and The Living Room Cafe. The paper, written by Chris Persons, the former Executive Director of Inspiration Corporation, is an in-depth piece (get ready, with attachments it's 56 pages), which describes the motivations for each merger and the process that they went through to complete each one. Inspiration Cafe, the original nonprofit prior to the mergers, grew to become Inspiration Corporation, a citywide nonprofit about twice their original budget and program size. Thus far, Inspiration Corporation feels that they have benefited from the mergers, primarily through the geographic and program expansion the combined mergers created for their organization. The current executive director, John Pfeiffer is firm in his belief that mergers rarely produce significant capital for nonprofit growth or dramatic organizational efficiencies. As John states, "I've seen how mergers can promote the strategic reconfiguration of program offerings - weeding out under performing and overlapping programs, for example - but apart from offering incremental gains in efficiency, and fuller and more marketable program arrays, I'm not optimistic that mergers can deliver significant unrestricted resources for most human service organizations." Capitalizing Inspiration Cafe was not the primary motivator for their seeking the mergers in the first place. Instead, Inspiration Cafe wanted to grow and expand its services to their clientèle which they definitely achieved. Inspiration Corporation, at the conclusion of their paper, states that the organization is not done with its merger activity; they will seek other merger opportunities that meet with their mission and strategy.