A couple of weeks ago, I read David La Piana’s Merging Wisely article, published by the Stanford Social Innovation Review in 2010.
In that blog, I reported La Piana’s opinions— based on facts and years of experience — that funders have a role in nonprofit unsustainable business models.
This week, I’m going to focus on a different section of that article: The preservation of critical community services.
What spoke to me in the next section of the article, Cases for Merging, is that some form of a merger is invariably used when it is revealed that a community is about to lose a critical service. By the time the "M" word is on the table, there are practically no other alternatives, save the complete loss of the service.
La Piana uses an example of two California organizations, which both filled acute community needs — homeless services. One was San Francisco-based and stable. The other was based in San Jose. Forty miles and different worlds separated them. The San Jose organization was about to go under, fighting collaboration (an unnatural act done by non-consenting adults!) even after major funders gave an ultimatum with the "M" word.
Tragic. Tragic because human interactions, not mission, took center stage. But I wasn’t standing in their shoes, either.
Initially, the goal — to grow and enhance homeless services — was lost in the negotiations. The list of issues to wade through included: cultural divide, loss of autonomy, leadership vacuum, duplication of internal infrastructure and staff tensions. Even deciding where to hold meetings became a challenge. In the end, a sustainable business model — through a merger — allowed for improved delivery of homeless services.
Looking in the rear view mirror, I wonder if those involved would today acknowledge that “all that drama" wasn’t really necessary. Is that wishful thinking?
The Patterson Foundation’s Collaborative Restructuring Initiative provides neutral facilitators that can keep the conversations mission-focused. Communities cannot afford to lose critical services.
Is it possible to rescue a failing organization without drama? Your thoughts?
Learn about these and other concepts used in TPF's approach to philanthropy.
SHARE THIS POST: