Archive for the ‘Mergers, acquisitions and consolidations’ Category
November 3, 2011
Thanks to Thomas Cott of You’ve Cott Mail for pointing the Nonprofiteer to this article in Crain’s New York Business about the value of collaboration among small arts organizations as typified by the Lower Manhattan Arts League.
The league — which includes small groups like Access Theater and larger organizations such as Dance New Amsterdam and the Children’s Museum of the Arts — has monthly meetings where constituents help each other with everything from fundraising to legal advice. The groups have created a downtown cultural festival, which they produce in the fall and spring. The members even apply for some grants as one entity and lobby the city government as a pack. Individually, some members with budgets as small as $100,000 are barely on funders’ radar, but as a group the members generate around $14 million in economic activity per year and employ roughly 1,200 people full- and part-time. After years when none of the groups were able to score a grant from American Express, for example, the consortium applied together in 2009 and was awarded $100,000. They divvied up the money according to the size of each budget.
While the cheery tone of the article elides some of the serious difficulties arts organizations face in aligning their missions and needs with one another, the point is nonetheless well-taken: organizations too small to get attention on their own may be big enough when combined with others to secure foundation funding and government cooperation.
Such collaborations also serve as living ripostes to the chronic funder complaint that the supply of arts organizations exceeds the demand for them: if these disparate groups can work together without cannibalizing their audiences or funding, they must not be duplicating each other’s work. Or, as it is written: the whole [collaborative network] is greater than the sum of its parts.
Tags:501c3, Advocacy, arts groups, Arts Organizations, charity, collaboration, donors, foundations, Fundraising, Management Advice Day tip, Mission, nonprofit, Nonprofit management, not for profit, philanthropy, public funding for the arts, Relations with funders, theater
Posted in Advocacy, Arts Organizations, Coverage of nonprofits, Government grants, Mergers, acquisitions and consolidations, Mission, Nonprofit management, Nonprofits--General, Relations with funders | 3 Comments »
March 27, 2009
This account from Sunday’s New York Times gives the flavor of life in a community where the supports are all crumbling at once. N.B. the emphasis on the possibility that agencies will have to merge or collaborate to secure support from strapped philanthropies.
Historically, mergers and collaborations driven by funders (the United Way was an early champion of the technique) have been less successful than those initiated by the relevant agencies. But it’s understandable at a time of crisis that philanthropists can’t wait for agency executives to get their egos out of the way, and must press for quick action.
The article also makes a point it may not have intended: that charities reliant on organized philanthropy are at the mercy of same. Only an agency’s own individual donors–who are persuaded of the essential irreplaceability of its particular approach to issues, whether social-service, arts, advocacy or environmental–can sustain it through these tough times.
So if you’re not already raising money from individuals, time to start.
Tags:charity, charity mergers, Detroit, foundations, Fundraising, grants, individual donors, Mission, Nonprofit management, nonprofits, not for profit, Private Philanthropy, Relations with funders
Posted in Coverage of nonprofits, Finances, Foundation Hall of Shame/Stupid Foundation Tricks, Fundraising, Mergers, acquisitions and consolidations, Mission, Nonprofit management, Nonprofits--General, Private Philanthropy, Relations with funders, Strategic Planning (and the tactical kind, too) | 1 Comment »
February 26, 2009
Does bankruptcy make sense for nonprofits?
The Nonprofiteer isn’t smart enough to decide; but it seems to her that only one of the essential goals of bankruptcy–enabling the enterprise to continue–even applies in the sector.
The other goals–refreshing the entity’s access to credit by wiping out its old bad debts; providing supervision in allocating assets and debts by a party without personal financial interest in the results; saving something for creditors and shareholders, often at the expense of employees–are either irrelevant or inappropriate to nonprofits, which can’t get access to credit anyway, are already governed by people without personal financial interests, and have no shareholders.
That leaves only creditors, on the one hand, and employees, on the other. Bankruptcy would then be just the next in a long line of techniques for screwing nonprofit employees for the benefit of others who are seen as somehow more deserving, a perspective the Nonprofiteer regards as somewhere between nonsensical and disgraceful.
But what does she know? By hypothesis, some employees will keep some kinds of jobs in a post-bankruptcy nonprofit. Only a case-by-case analysis would reveal whether more workers would stay employed this way than through merger with a healthier compatible agency. But no one works at a nonprofit that’s been dissolved.
It’s a sign of the economic times that these are the alternatives we’re considering.
Tags:Boards of Directors, Management Advice Day tip, nonprofit bankruptcy, Nonprofit management
Posted in Boards of Directors, Current Affairs, Finances, Mergers, acquisitions and consolidations, Nonprofit management, Nonprofits--General, Personnel Issues | 4 Comments »
January 19, 2009
Regular reader Yana Davis writes to ask our thoughts on “a new kind of social service network:”
Premise
There are many adults today living alone, not because they necessarily want to, but because they are not in primary relationships, their families and friends are distant from them, they have no immediate families or other reasons.
Solution
Creation of “working families” through placement of compatible adults, including single parents, in “US Family” homes with 3-4 adults, spanning several generations, who would share expenses, coalesce into family-like units, and provide the same kind of support for each other that biological families provide.
The idea sounded familiar to the Nonprofiteer, but she couldn’t think why until she remembered the Chicago-area nonprofit H.O.M.E., Housing Opportunities and Maintenance for the Elderly, which among its other programs provides cross-generational communal housing. While focused on the financially needy (rather than the merely lonely), the concept seems much the same: created families, so to speak.
The H.O.M.E. system has proved its merit over some years, and the Nonprofiteer suggests that Yana investigate joining forces with people who’ve already perfected the model. Like all social service agencies, H.O.M.E. struggles to secure enough support to serve its clients; perhaps a project focused on those whose needs are social rather than financial would help cover the costs of its core work.
Tags:created families, H.O.M.E., intergenerational living
Posted in Housing, Mergers, acquisitions and consolidations, Social Service Agencies | Leave a Comment »
November 21, 2008
In a white paper issued last month, the Taproot Foundation argued that a commitment to pro bono services by the strategic planning profession could unleash $1.5 billion worth of high-impact free advice to nonprofits, and offered its own system for organizing and dispensing that advice to the agencies most in need. Its emphasis on donated services puts the Foundation in the thick of a task otherwise left to Executive Directors, Program Directors and Volunteer Coordinators: finding roles for volunteers that are simultaneously meaningful to individuals and useful to the nonprofits they seek to serve.
The Nonprofiteer, a strategic planner herself, thinks more nonprofits should indeed have access to strategic planning services, and likes the idea of bringing volunteers in as professionals rather than grunt laborers. Here are her concerns with the Taproot formulation–bearing in mind that it’s always easier to nitpick a project than start one:
- Taproot’s approach to strategic planning seems to bear the fingerprints of its funder Deloitte, emphasizing the ideas that nonprofits’ central strategic planning task is to determine whether they should merge with other nonprofits. This is a drumbeat that the charitable sector has heard from the business sector for years, and we should be concerned about a widely-distributed strategic planning template that argues from a stance of expertise that there are too many nonprofits and the essential question is how to make them fewer, bigger and more efficient. In fact, if we’re going to go on having social services delivered by private nonprofits instead of by government agencies, the main reason is a belief in the value of localized, community-based, small-scale interventions as against nationalized, standardized and massive efforts. So let’s pause before we export to thousands of nonprofits the idea that their job is to go out of business.
- Taproot’s idea of putting volunteers on site briefly–a single meeting with the client, a 6-9 month overall commitment–may work for some volunteers whose main concern is getting a resume credit or honing their preexisting skills; but most people are looking for a volunteering home. The Nonprofiteer can only speak for herself (as usual) when she differentiates between what she does for a living–parachuting into agencies to offer an outsider’s perspective–and what she does, or hopes to do, for love: being a long-term unpaid staff member. There’s a reason to keep these two activities separate: strategic planning requires asking hard questions while long-term volunteering requires implementing the answers. Strategic planning requires a willingness to be unpopular to the point of exile while long-term volunteering requires figuring out how to work with people whose ideas and motives are very different from one’s own–a skill without which nothing important or lasting can ever get done. To put it another way: charities need expert external perspective far less than they need enhanced internal capacity–the kind that comes from long-term volunteers.
Unless we can figure out a way to turn skilled outsiders into committed insiders, we’re just churning: roiling the water without moving the ship forward. Lest we forget: the point of volunteering is not to provide free labor to charities but to connect people within communities to the broader work of those communities.
Glad to see, though, that someone is thinking seriously about the problem of making voluntary work satisfactory to the volunteers–without that, there’s no chance for the long-term relationships the Nonprofiteer considers so essential. Maybe Taproot’s next project could be to help volunteer managers think about their work from the perspective of capable volunteers, and foster a longer-term commitment between volunteer and institution.
Tags:community, Nonprofit management, Private Philanthropy, pro bono services, Relations with funders, social capital, strategic planning, Taproot Foundation, volunteers
Posted in Mergers, acquisitions and consolidations, Nonprofit management, Nonprofits--General, Personnel Issues, Private Philanthropy, Relations with funders, Strategic Planning (and the tactical kind, too), Volunteers/Volunteerism | 2 Comments »
May 14, 2008
Venture Philanthropy . . . one of the last few tax write-offs or tax advantageous schemes–-or ways to help buddies get rid of dogs or other unwanted investments[?] Here’s how it works . . . . a non profit . . . creates for-profit entities to generate revenue to help support the non-profit parent. But . . . . a for-profit company, a startup in technology, needs an investment from a known brand . . . to make it attractive to other investors. But the known-brand knows it won’t get anything for its investment in the startup. So the primary backer of the startup, a V[enture]C[apitalist], donates a few million to the name-brand’s parent non-profit. The brand then turns around and invests nearly the same amount into the startup……lots of favors all around.
In other words, a start-up business buys credibility by “donating” to a brand-name nonprofit, whose for-profit subsidiary funnels the money back whence it came. The start-up is no richer than it was before, but no poorer, either, and now it’s able to present itself to potential purchasers as an established pillar of the community instead of a fly-by-night operation–particularly if its founder has gotten some ink as one of those amazing “venture philanthropy” creatures who’ve figured out how to make charity unnecessary.
Comments from people who actually understand venture capitalism eagerly solicited!
Tags:nonprofit, not for profit, Private Philanthropy, venture capital, venture philanthropy
Posted in Coverage of nonprofits, Investment, Mergers, acquisitions and consolidations, Philanthropy and Taxation, Private Philanthropy, Uncategorized | 2 Comments »
March 3, 2008
We often complain about the proliferation of nonprofits, and ask why people with ideas about service to humanity don’t join with those already serving humanity instead of striking out on their own. But the Nonprofiteer has noticed how frequently her ideas are shot down by people with the capacity to execute them. Perhaps this reflects the ideas’ weakness; but it may also reflect the "Not Invented Here" phenomenon, which prevents people from appreciating ideas they haven’t had themselves.
And–to be less harsh on the people who don’t adopt others’ ideas–running an institution has one set of demands (for stability, predictability, and keeping a number of moving parts all moving in the same direction), while innovating has another (for creativity, unpredictability and letting the chips fall where they may).
So let’s consider the possibility that the multiplication of nonprofits is the result neither of innovator narcissism nor of institutional paralysis, but simply of the fact that building a better mousetrap is best done where there are the fewest fingers and toes at risk of getting slammed.
Posted in Mergers, acquisitions and consolidations, Nonprofits--General, Social Service Agencies, Strategic Planning (and the tactical kind, too) | 6 Comments »
January 15, 2008
The student loan mess continues: last week, loan consolidator Sallie Mae fired its boss after he screwed up a takeover bid. The company is blaming the collapse of the takeover on the Congress’s decision to reduce the subsidy banks receive for making student loans, though such a reduction was long overdue considering that the government is able to offer loans directly to students far less expensively than any private lender, no matter how subsidized. (Sound familiar? It should. It’s the same situation we have in health care, where Medicare’s administrative costs are lower than those of any private insurer. And which sector is inefficient?)
As James Surowiecki explained in a New Yorker article in August, a combination of ideology ("Everything done by the government can be done better by the private sector!") and economic power ("Let’s pay off some college officials!") has kept the student loan industry in beer and skittles at the expense of the rest of us.
But truly revamping the student-loan program will required renewed confidence in the ability of government programs to serve individuals. As it happens, there’s evidence for this in the history of student aid itself, which stretches back to the G.I. Bill, when the government committed itself to paying for the college education of returning veterans. An overwhelming success, the bill involved no middleman: the government paid tuition fees directly to colleges. . . .Talk of the government running anything, of course, makes people anxious, conjuring up images of state-run steel factories, but the truth is that the government is already running the student-loan market. The problem is that up to now it’s been run in the interest of student-loan companies. Maybe it’s time to start running it in the interests of students.
On the horizon is a financial catastrophe in the student-loan market like the one now surfacing in the housing market. If and when it occurs it won’t be because the Congress stepped in; it’ll be because it didn’t step in sooner.
Tags:Education, Higher education
Posted in Charity scandals, Education, Higher education, Mergers, acquisitions and consolidations, Public private partnerships | 2 Comments »
November 28, 2007
Buried deep in this piece about the move to reconstitute Atlanta’s charity hospital from a public to a nonprofit body is the following sentence:
a single anonymous donor had agreed to give the hospital $200 million if the donor approved of the governance system changes.
The article had previously mentioned the conditions of the decision to go private as if they were a guarantee of legitimacy:
The hospital authority, which would continue to own Grady’s
buildings and land, made explicit that its willingness to hand over
control depended on substantial financial commitments from both the
public and private sectors.
Before the lease [to the new nonprofit] . . . becomes effective, the hospital must receive
written commitments for a capital infusion of $200 million from
businesses and philanthropies.
In addition, the resolution demands that state leaders provide written support for $30 million in new state aid.
Let’s review: in the guise of tub-thumping for widespread public support, the hospital authority has obeyed the wishes of a single donor. Those wishes include requiring expenditure of $30 million in public money.
This may be what the hospital needs; but anyone who claims this is a less corrupt way to govern a hospital system than that provided by elected officials just isn’t paying attention.
And the reporter’s readiness to cover the red-meat red-herring–that the question is the color of the governors rather than the color of their money–reminds us how pervasively and continually race distorts conversations in this country.
Tags:Fundraising, Health care, Poverty, Private Philanthropy, Racism, Relations with funders
Posted in Fundraising, Health care, Mergers, acquisitions and consolidations, Poverty, Private Philanthropy, Public private partnerships, Racism, Relations with funders | Leave a Comment »
