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Nonprofit mergers: The good, the bad and the ugly
For nonprofit organizations to succeed, it takes a big heart and a keen sense of business, according to Barrett Baebler, associate professor of nonprofit leadership at Webster University.
On Monday, Nov. 12, Webster hosted a panel discussion exploring the good, bad and ugly of nonprofit mergers. The discussion highlighted the many good reasons to merge, but also brought to light the cultural and emotional struggles that nonprofits face during a merger or acquisition.
The George Herbert Walker School of Business & Technology hosted four experienced nonprofit leaders as they discussed the many aspects related to nonprofit mergers. To an audience of more than 80 people, Wendy Sullivan, panelist and CEO of Life Skills-TouchPoint Autism Services, opened the discussion by sharing her experiences with nonprofit mergers.
Sullivan spoke about the recent merger between Life Skills and TouchPoint Autism Services. Life Skills is an organization that works with people who have developmental disabilities and has taken part in four different mergers over the years. The first three mergers were with smaller companies and could be considered acquisitions. However, the merger with TouchPoint was much larger, Sullivan said.
“When it comes to long-term care for development disabilities, it’s very difficult to be small,” Sullivan said. “With the regulatory environment, the staffing needs are very intense and we have found that smaller organizations are looking for partners.”
Sarah Buek, panelist and quality coordinator of Epworth Children and Family Services, weighed in on the good experiences with a nonprofit merger. Buek was originally with Family Support Network until it was acquired by the larger nonprofit Epworth Children and Family Services.
“It was really hard to fund the infrastructure that we would need in order to expand to the level that we wanted,” Buek said. “We began to look into partnerships, collaborations, mergers and acquisitions so we could take the organization to the next level.”
However, Buek said emotional and cultural issues were a challenge when Family Support Network — an organization with 20 employees — was acquired by Epworth Children and Family Services, an organization with more than 200 employees. Buek said it was difficult emotionally when the time finally came for Family Support Network to dissolve into Epworth Children and Family Services.
“When I know people are making decisions on the programs I helped build, I want to make sure they understand that program, the back story and why we did what we did at Family Support Network,” Buek said.
Flint Fowler, panelist and president of the Boys and Girls Club of Greater St. Louis, said it’s important to understand the nonprofit an organization is merging with and to make sure the two are a good fit.
Fowler also said it’s important to take into account the different boards and to try to build bridges in regard to getting financial support, despite organization changes.