Finally, the workbook features key questions and checklists for nonprofit leaders to use as they move through their own merger exploration. What is it that makes a nonprofit merger work well. Here are a few tips to help your nonprofit think about strategy. How to select a mergerreorganization structure that is. Similarly, our strategic restructuring practice which handles mergers and.
You may reproduce the materials on this cd for use in your own organizations strategy formation processes. Ssrn applied mergers and acquisitions researchgate. Korngold used these steps to describe nonprofit merger activity with which she had been involved. Before plunging into any strategic alliance, it is helpful to be familiar with common pitfalls and challenges. In the past, when two nonprofit organizations came together, the accounting was essentially to combine the. Form 624 certificate of merger for nonprofit corporation. Mergers as a strategy for success toolkit mergers as a strategy for. This form is basic and may not meet all merger needs. Would you recommend a strategy of acquiring nonprofits for organizations that wish to grow. Using realworld examples, case studies, and enduring frameworks, nonprofit mergers and alliances, second edition offers clear.
Opinions expressed by forbes contributors are their own. Leadership and staff in both organizations will need to play an active role. Using realworld examples, case studies, and enduring frameworks, nonprofit mergers and alliances, second edition offers clear, practical, stepbystep guidance through the merger and alliance development process. A cocurated, four week series of cases and blogs that explores effective nonprofit mergers, looking at their rationales, catalysts, and results plus the challenges of due diligence and integration. How to merge a nonprofit organization with a corporation. Applying conventional horizontal merger enforcement rules to mergers of nonprofit hospitals is controversial.
Few nonprofit leaders question the value of strategic planning. Merger andor acquisition due diligence checklist i. Its foolhardy to believe that strategies should not do so as well. It makes a lot of sense, particularly when you dont have the expertise in house. Oct 03, 20 a merger of any two organizations does not just involve the executive directors or founders. Clear, practical, stepbystep guidance through the nonprofit merger process. I write about strategic clarity and its power to transform results. Apr 01, 2008 in his newest book, the nonprofit strategy revolution. Attached is a form to file articles of merger pursuant to section 607. Value creation is the best criterion for evaluating acquisition strategies. The following plan of merger was approved by each of the undersigned corporation.
When a solitary nonprofit organization analyzes its own strategy options, including a merger, and decides which. In this article, i will attempt to give you the readers digest version of why the nonprofit sector needs a strategy revolution. Nonprofit executives, boards, and funders have significant roles in shaping an organizations direction, so their resistance or hesitancy to change can become a significant roadblock. Mar 09, 2017 strategy is a set of unified actions undertaken to advance a nonprofits mission by leveraging its competitive advantage. New accounting rules for mergers and acquisitions of nonprofit organizations are now in effect. The first authorizes three or more people to form a corporation or a voluntary association for public worship cgs 33264a. Select a, b or c, but not both for domestic nonprofit corporation. A nonprofit corporation can merge with another corporation, including a forprofit corporation or another nonprofit corporation. Jul 21, 2016 a merger in the nonprofit world is no less complicated than the merger of a forprofit corporation. Statement of financial accounting standard sfas no. Merger and acquisition accounting new accounting rules for mergers and acquisitions of nonprofit organizations are now in effect. Common scenarios for nonprofits exploring a merger the idea of a merger usually doesnt just arrive in the boardroom. For a nonprofit engaging in strategic planning, there are myriad benefits. We evaluated 11 years of merger filings in four states.
Nonprofit strategy revolutionary certificate pdf in 2008, the nonprofit strategy revolution, first edition, challenged traditional thinking about how social sector organizations form strategy and presented the realtime strategic planning methodology as one better suited to an increasingly dynamic and fastchanging world. Instruction sheet for articles of merger for domestic non. They interviewed a minimum of three participants from each. Massachusetts, florida, arizona and north carolina, and found that more than 3,300 organizations reported engaging in at least one merger or acquisition between 1996 and 2006, for a cumulative merger rate of 1. Certificate of merger for nonprofit corporations the attached form is designed to meet minimal statutory filing requirements pursuant to the relevant code provisions. Why nonprofit groups merge the chronicle of philanthropy. This form and the information provided are not substitutes for the advice and services of an attorney and tax specialist. Dec 12, 2009 if the mergers important, make sure to let the executive director know there is a place for him or her in the organization.
Critics contend that the different objective function of notforprofits entities should mitigate, and possibly eliminate, competitive concerns about mergers involving nonprofit hospitals. Mergers and acquisitions for nonprofits accounting, legal. Introduction in nonprofit organizations lessons field. Many nonprofits are corporations, and use mergers and acquisitions to survive financial hardships or to increase scope, reach, etc. Merger and acquisition accounting nonprofit update. Mergers as a strategy for success 2016 report from the. Nonprofit merger research project the metropolitan chicago nonprofit merger research project is a partnership between mission plus strategy consulting, a midwest consulting firm based in chicago specializing in nonprofit restructuring and the chicago foundation for women. Since merging is such a daunting prospect, and because a merger is often seen as a last resort, most nonprofits undergo some serious thinking before contemplating a merger.
A recent study uncovers what drives successful mergers and suggests that more nonprofits should consider mergers as a useful tool to increase impact. In either case, the irs must determine whether the post merger entity continues to be organized and operated for section 501c3 purposes. Pdf a qualitative research of mergers in nonprofit sector. Strategic restructuring establishes an ongoing relationship between two or more independent organizations by merging, sharing, transferring, or combining. Jun 26, 20 merger under state law may result in a new entity or in one of the parties to the merger ceasing its existence.
Some nonprofits pursue mergers and acquisitions to stave off financial duress or to benefit from the stronger operational controls of a larger acquiring nonprofit. Management of these nonprofits see the challenges presented to struggling organizations and consider mergers and acquisitions as a way to shore up finances, consolidate fundraising efforts and reduce administrative costs. Im not a lawyer, but the merger and acquisitions process for nonprofits is similar for commercial ventures. Nonprofit mergers and alliances, 2nd edition thomas. The cd that accom panies the book the nonprofit strategy revolution may be loaded onto the computer of the. Mergers and acquisitions distinguishes the difference between a merger or an acquisition. Chapters 5 through 8 revisit the characters a year after the completion of the merger and highlight the key lessons they learned in the process. Mergers are a strategy for organizations seeking to strengthen their longterm financial. By eugene fram a fast company article by alice korngold about nonprofit mergers lists seven steps for a successful nonprofit merger. An example of strategic mergers in the nonprofit sector.
Pdf the vast majority of people perceive mergers as being done by. Attached is a form for filing articles of merger pursuant to section 607. As nonprofits consider strategies for the future, it is not unusual for a board or staff to explore the possibility of realigning resources, collaborating to increase efficiencies, or entering into a formal strategic alliance with another nonprofit s. It will take time to discuss how a merger will be structured and how it will impact staff, donors, and, most importantly, the mission and people your organizations. To do this well, the ceoed must use an outside expert. The nonprofit strategy revolution offers a nimble and powerful alternative. Building capacity in nonprofit organizations urban institute. For a healthier nonprofit sector, funders should consider a wider variety of. Nonprofit strategy revolution finalist, ben franklin awards, independent book publishers association, business category the world changes continuously and rapidly. Massachusetts, florida, arizona and north carolina, and found that more than 3,300 organizations reported engaging in at least one merger or. Nonprofits typically pursue mergers and acquisitions to broaden the range or improve the quality of services. Realtime strategic planning in a rapidresponse world, 2nd edition. Section iv outlines the empirical strategy for studying the price effects of that merger.
Mergers, alliances, affiliations and acquisitions for. Aug 31, 2011 many nonprofit entities are contemplating merging with or acquiring another organization as a response to the troubled economy of late. Ensure leadership and key internal stakeholders are aligned with the merger strategy. Mergers, collaborations, and strategic alliances national. The burgeoning wealth created by the information and technology revolution has. The plan of merger was adopted in the following manner for each undersigned corporation. Then the board can debate, refine, select, challenge, and ultimately determine the strategy best for the companys mission and future. The document must be typed or printed and must be legible. Mergers as a strategy for success 2016 report from the metropolitan chicago nonprofit merger research project.
Ever since the economy began to deteriorate in late 2008, ive been hearing stories about how there was going to be a huge wave of consolidations, mergers, and acquisitions in the nonprofit sector. When joan scarangello mcneive, a nbc news writer, lifelong new yorker and devoted yankee fan, died at age 47 of lung cancer in 2001, her family, friends and colleagues started a foundation called joans legacy to fund. Why traditional nonprofit strategic planning isnt strategic. So long as the material is for use within your organization, by all means, use it widely. Mergers, alliances, affiliations and acquisitions for nonprofit organizations. In the past, when two nonprofit organizations came together, the accounting was essentially to combine the accounting information of the two entities. Critics contend that the different objective function of notforprofits entities should. Facilitators guide pdf tools pdf nonprofit strategy revolution certificate pdf. Because the nonprofit strategy revolution was written to benefit nonprofit and community organizations, we grant the purchaser of this work limited permission to reproduce forms, charts, graphics, or brief excerpts from the book so long as the reproductions are for direct. This 10th anniversary edition is a valuable tool for organizational leaders, capacity builders, and students of nonprofit management. The competitive effects of notforprofit hospital mergers. May 15, 2016 8 signs of a great nonprofit strategy.
While planning can improve the chances of successfully implementing a strategy, the plans themselves are not strategies. How to merge a nonprofit organization with a corporation quora. Mergers and acquisitions distinguishes the difference. Chapter 7 corporate strategy, structures, and planning 189 learning objectives 189 corporate strategy 190 considerations 192 diversification 193 portfolio analysis 196 strategic orientation and alignment. Many nonprofits are corporations, and use mergers and acquisitions to survive financial.
Realtime strategic planning in a rapid response world, 2nd edition. You asked us to summarize three statutes relating to the formation of religious corporations and associations and the merger of nonprofit corporations. Jul 05, 2015 philanthropy is personal, and never more so than when donors are moved by the death of a loved one. Realtime strategic planning in a rapidresponse world 9780940069657. In 2018, the nonprofit strategy revolution second edition was released and features a timely new preface. Mergers and acquisitions for nonprofits accounting.
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