?Mergers in the world of NPOs

?Mergers in the world of NPOs
“Merging? But we’re not a business”
This was the answer I received from the head of one of Israel’s largest NPOs when I asked him whether his organizationshould perhaps merge with another that operates in the same field. I naively thought that merging the organizations would maximize their social impact and help their beneficiaries. There are around 30,000 NPOs registered in Israel (of which about a half are active), with 1,600 new organizations registering themselves each year. In the last two years, however, only two merger requests have been submitted. e
Would it not be worth considering merging some of these organizations, thus maybe offering greater social returns? There are ethical arguments to be made against this: mergers blur organizations’ identity and could undermine their activities; sometimes, a social issue is best dealt with by a small, focused and committed organization; moreover, merely raising the possibility of mergers would seem to imply that NPOs should be viewed through the lens of financial efficiency alone,which might prevent them from attaining their social goals and harm their activities for those who need help. e
However, in my view, the possible advantages, and in particular the chance of enhancing organizations’ influence and effectiveness for its beneficiaries, mean that donors to the third sector and NPOs’ boards of directors and CEOs ought to examine the issue in depth. Merging could contribute to NPOs’ professional capabilities, strategic planning, the quality of their management, financial savings, and, of course, the quality of assistance provided to beneficiaries. e
For instance, if an elderly person seeking assistance can receive a comprehensive solution from a single place, surely this is preferable to the current situation whereby he or she has to approach five different bodies in order to exercise all of his or her rights. e
A study conducted by my colleagues at NPC in the UK found that NPOs consider merging when facing a crisis. And in Israel, the law was only changed to enable mergers following the donor crisis of 2008/9. However, organizations that aspire to excellence in their social impact and effectiveness, and whose concern for their beneficiaries is their top priority, must constantly be thinking about mergers, but carefully and rationally, and not because they are under pressure. Organizations that are fearful of taking the plunge would do well to take two initial steps. First, to map the other NPOs that are active in the field; and second, to try and include in their annual work program one or two joint projects in collaboration with another organization. And by the way, Midot, which seeks to promote the effectiveness of donors and NPOs, and which rates NPOs based on their ability to act effectively and attain social returns, includes parameters that measure joint ventures initiated by the organization in order to leverage its influence. e
Dubby Arbel,  CEO of Midot

http://www.midot.org.il/Mergers in the world of NPOs