Collaboration & Mergers

A new report by the Vermont Community Foundation indicates that more than half of Vermont’s nonprofits are considering teaming up, one way or another, to survive the current economic downturn and keep their missions alive.

Launching and maintaining a collaboration can be both promising and challenging. Great gains may be made by joining organizational forces, but the best intentions can fall flat if the effort is not well planned from the beginning.

Collaboration is a process of participation through which people, groups and organizations work together to achieve desired results. Collaborations can take four primary forms: Contractual Relationship, Strategic Alliance, Consolidation and Merger.

In The Making of a Nonprofit Merger, John Emmeus Davis posits:

“Why is collaboration gaining in popularity? A financial explanation would be that it is becoming harder to find enough resources to strengthen every non-profit to the same degree, funding multiple nonprofits to serve a similar clientele in the same locale. There is also the political reality that public and private funders find it difficult to choose easily (or accurately) which nonprofits should live — and which should die.

“There is a practical explanation as well. Collaboration is becoming a strategy of choice simply because it is proving to be an unusually effective way of achieving greater productivity, efficiency and sustainability. When a collaborative (or a merger) is carefully crafted, the nonprofit partners do a better job together than they did apart.”

Many scholars have studied the collaborative process and have suggested that there are several key factors that promote or inhibit the success of the venture. Lynn Borden and Daniel Perkins of the National Network for Collaboration propose the following key features of successful collaboration:

  1. Communication: the collaboration has open and clear communication. There is an established process for communication between meetings;
  2. Sustainability: the collaboration has a plan for sustaining membership and resources. This involves membership guidelines relating to terms of office and replacement of members;
  3. Research and Evaluation: the collaboration has conducted a needs assessment or has obtained information to establish its goals and the collaboration continues to collect data to measure goal achievement;
  4. Political Climate: the history and environment surrounding power and decision making is positive. Political climate may be within the community as a whole, systems within the community or networks of people;
  5. Resources: the collaboration has access to needed resources. Resources refer to four types of capital: environmental, in-kind, financial, and human;
  6. Catalysts: the collaboration was started because of existing problem(s) or the reason(s) for collaboration to exist required a comprehensive approach;
  7. Policies/Laws/Regulations: the collaboration has changed policies, laws, and/or regulations that allow the collaboration to function effectively;
  8. History: the community has a history of working cooperatively and solving problems;
  9. Connectedness: members of this collaboration are connected and have established informal and formal communication networks at all levels;
  10. Leadership: the leadership facilitates and supports team building, and capitalizes upon diversity and individual, group and organizational strengths;
  11. Community Development: this community was mobilized to address important issues. There is a communication system and formal information channels that permit the exploration of issues, goals and objectives; and,
  12. Understanding Community: the collaboration understands the community, including its people, cultures, values and habits.

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