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PROJECT POINTERS
Issue 65 - Late Winter 2021
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When I left university administration thirty years ago, I could not have imagined what satisfaction and joy were on the horizon. Shortly after I made the change, the Kentucky Department of Workforce Development hired me to facilitate the creation of a credentialing system for 3,200 adult educators and a consultancy was launched. Being the objective, neutral outside voice and planner offered an ideal role, then I soon focused on human services and found my true passion. I still get excited about new projects and hope the years of experience bring value for my colleagues.
Currently, on top of integration planning for a merger that will soon be announced and a scattering of other projects, I am sharing my experience with new audiences through several webinars. Please see the newsletter's Webinar Announcements to learn about two that are open to the public.
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I was recently asked about the fear factor in nonprofit mergers. This is a huge, complex topic and a universal one in many ways. The types of fears are as unique as the people involved but tend to fall into one of the following four categories:
Loss of Identity.
I have never worked on a project without this concern floating around all discussions. Board members are particularly reluctant to embrace an organizational name or leadership change, especially if their nonprofit has been in existence for a long time. This conflict is even more pronounced when the founder is still involved. The fear is best addressed by focusing on the many benefits of the proposed partnership and allowing everyone to express their feelings. It also helps to see the concrete ways in which history and tradition will be maintained and celebrated. Ongoing discussions may be necessary, even after the boards vote to combine, because the identity loss will be felt for some time. A positive integration experience will help reduce concerns.
The leader may also fear the personal loss of her or his identity. Identity includes a sense of place within the nonprofit as well as the community and wider professional circles. While a period of mourning is predictable, it is usually lessened as the organizations move toward combining. Others in the organization may have their own identity fears, exaggerated because many questions cannot be answered early in the process -- people just do not have the answers in some cases. Change is difficult, and some staff and volunteers may struggle with this.
Reduced Control.
An executive director has a great deal of control and influence over all aspects of the organization. The longer she has served, the more her preferences and likely decisions will be anticipated by the staff. During partnership discussions, she must confer constantly with the leader of the other organization. This is not only time consuming but serves as a concrete reminder that change is coming and that she no longer makes all of the decisions. In some cases, one CEO may now be reporting to the other CEO, and that transition can be challenging unless the two are clear with staff about how decisions are made and by whom. Clients often tell me their concerns about losing control proved to be accurate, even if they adjusted in time.
Fundraising Limitations.
Board and staff members often worry about losing donors and other funding support when news of a merger is announced. For example, will someone who has been a major donor at one organization be interested in contributing to the combined entity? In my experience, the opposite is the norm. Donors get excited about the possibilities that a larger footprint and service array bring, so they may actually increase the gift amounts.
Funders are usually told about the exploration even before the boards vote. Their support and excitement about a pending merger is invaluable, and they usually share information about new marketing or grant opportunities.
Staff Turmoil.
This common fear is based on experience as well as vicarious learning. We know that poorly managed communication and planning impacts staff and volunteers at many levels during a major change. News of a merger understandably brings concerns about job security, new supervisors, benefit changes, and the challenge of adjusting to new colleagues. A handful of people may resign to avoid the transition and a few will experience anxiety that interferes with completing work assignments. The best way to reduce or avoid turmoil is to get colleagues working together as soon as possible.
The above fears are understandable, even predictable. By acknowledging the feelings and appropriately sharing them, they almost always dissipate in time. The integration of two or more organizations comes with a few bumps along the way, but ignoring the fears is guaranteed to derail success.
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On Point - Current and Emerging Trends Impacting Partnerships
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COVID-19
It should come as no surprise that COVID-19 tops the list of trends. We knew that COVID-19 was impacting our work, but have you considered its impact on partnerships? Simply, it is affecting every aspect of nonprofit work, and partnership exploration and implementation are no exceptions. Here are some of the many things to consider:
- COVID-19 is driving more discussions, or it should be. With nearly 40% of nonprofits expected to close their doors, the expression "Era of Extinction" rings true. This alarming news coincides with the elevated need for services in our community now. As a result, nonprofits should be proactively thinking about partnerships that will preserve their services and provide sustainable impact.
- What is your philosophy on providing in-person services? Merging cultures is always the trickiest component of a partnership, but COVID-19 has added some new complexities to the mix. If you are providing in-person services while a potential partner is mostly working remotely, this could lead to conflict. Overcoming this will require many conversations and a deeper understanding of the reason for and value of both. Certainly, a new organization can prioritize and balance in-person services with remote services, but this requires clear communication and messaging so clients, staff, volunteers and stakeholders understand these decisions.
- Your space needs may change. Partnerships always require an evaluation of physical space - will you need multiple locations, should you centralize administrative functions, do you have a geographic footprint, etc.? Many for-profit businesses plan to continue work from home because it has been effective and less expensive to maintain. Nonprofits are unlikely to completely follow this model because of the relationship nature of their missions, but many may choose a hybrid model going forward. This would allow some work from home to reduce needed staff office space, free space for onsite client meetings and enhance staff retention by decreasing burnout. The space issues should be part of your planning.
- In-person meetings may be reduced. While many nonprofit leaders prefer to work in the office, board members are often more accustomed to virtual meetings during the pandemic. The silver lining is that attendance increases, and scheduling is easier. While virtual meetings can be efficient, they lose something as well. Much of the energy that accompanies a partnership is not from the planned agenda, but from the conversations, networking and chemistry that occurs among people. I encourage you to plan some time for in-person get togethers. Masks, large meeting rooms and individually-plated food/boxed meals can reduce the risk while still providing an environment for relationship building.
- Funding is always a key discussion in any partnership but is even more important now. Be sure to evaluate PPP loans and pending/expected forgiveness, employee retention credits and deferred payroll taxes that can impact resources and cash flow. Look at major funders and donors and evaluate any potential changes and how that might affect programs or operations going forward.
Addressing the impact of COVID-19 upfront, and weaving it into decisions on space, staffing, services, funding and more will help prepare you for a successful partnership.
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Here are a few questions from my recent webinars.
What are some reasons why a nonprofit should not consider exploring a partnership?
If an organization is not in a state of readiness with a solid strategic plan, a healthy infrastructure, and the right staff members in the right positions, discussions should be delayed. Also, if one highly vulnerable partner views the other as a financial savior, this is not a good time to move forward. Entering into an exploration for strictly political reasons or because it is trendy are also poor reasons to explore a partnership.
Can merger talks be conducted without lawyers?
Yes, retained counsel is often not required. I always suggest that the joint committee conducting due diligence have an attorney as one of its members and this expertise is very helpful. But in some cases, specialized knowledge is needed. For example, if one organization has union members, a labor attorney may be consulted. Or a real estate expert may be helpful if a building sale is likely. But in most cases, an attorney is not needed until near the end of the negotiations phase before the boards vote to approve or disapprove a merger. One attorney is usually retained by both organizations to draft the final documents.
What are early signs that talks between nonprofits won’t be fruitful?
When participants are reluctant to schedule meetings, consistently arrive late or don’t show up at all, these are obvious signs that commitment is lacking. If someone refuses to share essential information or contribute time or other resources, collaboration is all but impossible. And, if people are either too quiet or too controlling, the atmosphere is not rich for moving forward with a partnership. Non-verbals are often the strongest predictor of success, and I can usually tell by the third meeting what the outcome will be.
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The most captivating book I've read in some time is Death in Mud Lick: A Coal Country Fight against the Drug Companies That Delivered the Opioid Epidemic by Eric Eyre. The author, a Pulitzer recipient, has written an account that reads like a legal thriller and I highly recommend it.
For those who are missing live theater, Michael Riedel's Singular Sensation: The Triumph of Broadway will help fill the void. The backstory on many plays that were produced in the 1990's is interesting and fun. Who knew?
I cannot possibly write anything new about the highly praised A Promised Land by Barack Obama except to say it was indeed beautifully written and informative, the proverbial breath of fresh air during cold winter days.
If you want a lighter -- but not trivial -- family story with an unconventional aunt and lots of Italian references, The Star-Crossed Sisters of Tuscany by Lori Nelson Spielman offers a lovely reminder of the power of dreams fueled by love.
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Mental Health Crisis Care Collaborative
I had the pleasure of working with this group early in its planning phase and was optimistic about its future. In April 2019, with funding from bi3, Beech Acres Parenting Center, St. Joseph Orphanage, and The Children's Home of Cincinnati formed The Mental Health Crisis Care Collaborative (MHC3) to improve the accessibility to needed ongoing behavioral health services upon discharge from inpatient psychiatric hospitalization. Recognizing the need to ensure a seamless path from inpatient care to outpatient treatment, these three longstanding providers of children's behavioral health services embraced the opportunity for enhanced and meaningful impact by partnering together.
The MHC3 project's overarching goal is to break down barriers to accessing treatment, ensure connectivity to needed services, and honor the voices of youth and families in selecting treatment following an inpatient hospitalization. These goals have been achieved through the creation of a single point of access that allows for a warm hand-off between hospitalization and community behavioral health outpatient services. The outcomes of the MHC3 project are very promising and include increased connection rates to needed services, decreased number of days to receive treatment and decreased inpatient recidivism.
For more information on the MHC3 Project, please contact Debbie Gingrich at The Children's Home.
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I have never appreciated the powerhouse skills of my consultant circle more than during the last year. With resources tighter than ever, these independent experts deliver exceptional services with cost-effective strategies. I generally make referrals based on culture, personality and fit, and provide at least two names when asked for suggestions. For the full range of partner services, please visit my website. And please consider the following to support fundraising, enhance marketing and reduce stress:
Event Planning
- Full-service support for meetings and special occasions
- Flexible approach to virtual, in person, or hybrid events
- Logistics design, registration management, travel planning
- Speaker recruitment, agenda preparation
- Minutes and report preparation
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Webinar Announcement
Partnerships: Charting Your Nonprofit's Path Forward
Tuesday, February 23, 2021
1:30 - 3:00 p.m.
Offered by the Kentucky Nonprofit Network
As nonprofits adapt and prepare for a new year that includes continuing pandemic issues, the need for the services of many organizations will likely continue to rise exponentially. Nonprofit leaders must review funding and service delivery, with some expanding and others scaling back due to fluctuating demand and available resources. As we deal with continuously shifting client needs, complicated state and national trends, and limited resources (financial and staff), it may be time to look at partnerships as a potential solution. Savvy nonprofit executives are taking steps now to pool resources, leverage strengths, and maximize mission impact. Executive directors and CEOs are invited to join Marta Brockmeyer as she discusses the role of partnerships in preserving your missions and supporting your clients.
Topics include:
- Partnership benefits and organizational readiness
- Partner criteria and selection
- Partnership launch, maintenance and evaluation
- A look forward
Note: This live workshop will NOT be recorded.
What others are saying about this webinar:
- "Thanks Marta and KNN - wonderful discussion that everyone in our sector can benefit from hearing."
- "Thank you for hosting this; it has been very beneficial and informative."
- "Thank you for a great webinar! I've learned a lot!"
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The Board's Role in Strategic Partnerships
Tuesday, March 23, 2021
12:00 - 1:00 p.m.
Offered by the Kentucky Nonprofit Network
The last twelve months have provided a blizzard of continuously shifting needs, complicated state and national trends and limited resources of staff, time and funds. As some organizations continue to ramp up services, others will explore ways to scale back. Proactive nonprofits are taking steps now to maximize mission impact creatively and responsibly through strategic partnerships. What is the board’s role and what are their fiduciary responsibilities in these discussions?
To learn more, board members are invited to join expert Marta Brockmeyer, Ph.D., for this important discussion. Exclusively for nonprofit board members, Marta will help us explore:
- Partnership benefits during a challenging time
- Determining your organization’s readiness for a partnership
- Types of nonprofit partnerships
- Decision making criteria for partner selection
- Success factors
- A look forward
Note: This live workshop will NOT be recorded.
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We were all anxiously awaiting 2021, only to find new challenges awaiting us. Take heart dear colleagues, spring is on the way. And you are more than prepared for the work that lies ahead. |
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553 East 4th Street,
Newport, KY 41071
859-581-7089
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