Submitted by Jean Butzen on January 25, 2008 - 08:58

Nonprofits Merge to Grow Efficiently

Over the holidays, several articles hit my "in box" about nonprofit mergers. Year-end is a big time to finish up mergers in order to to start up the combined organization in the new fiscal year. One of the more interesting mergers I read about was between Renaissance Entrepreneurship Center ($2.2M/year, 16 staff) and Start Up ($350,000/year, 3 staff), both in the Bay Area.  An article about the merger appeared in the Silicon Valley/San Jose Business Journal on Dec. 24th and explained that the purpose of the merger, as we have seen in other articles in this space, was to take advantage of the each organization's geographic placement in the market. "This is a way for Renaissance to provide programs on the Peninsula without reinventing ourselves," said Sharon Miller, CEO of Renaissance and the person who will be the CEO of the merged organization.
According to Miller, the two organizations together will serve expanded populations and geography, and though they will be eliminating some overhead costs no staff will be laid off as a result of the merger at this point in time. Total expenses for the merger ran to $250,000 which will be covered through grants from the Silicon Valley Community Foundation and the Omidyar Network. This is an example of what I think of as efficient growth: why write a lot of grants and take years to build up your geographic foot-print when there is a potential partner in the very market where you would like to expand your services that you could merge with, instead? If the potential partner has similar mission, programs, delivery mechanism, outcomes, and financing method, why wouldn't you consider a merger?