Monday, July 27, 2009

Core Strategy #4 Forge partnerships, alliances and mergers to increase mission impact and sustainability

In a previous post, I listed 10 key strategies that need consideration in the strategic plans of nonprofit organizations. The first strategy described in that post is “Embed capacity building into the fabric of your nonprofit". The second strategy is to "Build an exceptional board". The third strategy discussed in my last post is to engage in accelerated strategic thinking and planning.

The fourth strategy is to forge partnerships, alliances and mergers to increase mission impact and sustainability. Even before the severe economic downturn, in recent years, there have been a number of sector trends encouraging increased partnership and alliance activity among nonprofits. The best guidance available to nonprofit leaders includes the following:

• Even though mergers are getting the most attention, there are a number of strategic restructuring options available: administrative consolidations, joint programming, management service organizations, joint venture corporations, parent-subsidiary structures and more.
• While there are a number of economic benefits touted, I think it's important to view strategic restructuring first and foremost as a strategy to increase mission impact. It's not about survival as an end in itself.
• It's all about relationship building and so it's important to prioritize trust building and communication. It takes time but getting to know each other is critical to long-term success.
• One of the most promising approaches has been articulated by Ben Gomes-Casseres, Professor at Brandeis University and co-author of Mastering Alliance Strategy. He encourages organizations to develop a diversified portfolio of partnerships and alliances. Lots of good resources can be found at his website. Go to:
• Finally, it's critical that nonprofits commit to increasing their internal capacity for building partnerships and alliances. Most of us don't know as much as we need to to do this work well.

The great news is that there are a number of excellent resources available to nonprofit leaders in the area of strategic restructuring. Here is my starter list:

• Strategic Restructuring: A Podcast (Time 10 minutes). Where do boards begin when considering restructuring options? Pat Wyzbinski of the Nonprofit Management Fund talks with Jean Butzen about questions a board can ask regarding the sustainability of the organization’s business model, changes in revenue sources, staff talent, quality of services, potential duplication of programs, and other critical factors. Jean Butzen is the president of Mission Plus Strategy Consulting, specializing in growing nonprofit social value through strategic restructuring. Go to:

• Jane Arsenault, Forging Nonprofit Alliances: A Comprehensive Guide to Enhancing Your Mission Through Joint Ventures & Partnerships, Management Service Organizations, Parent Corporations, and Mergers. San Francisco: Jossey Bass, 1998. 10 years since it first appeared and still one of the best resources on the subject. Click here to preview this book on

• Strategic Restructuring Website. Developed by Strategic Solutions, a project of LaPiana Associates. Go to:

• Partnership Matrix by David La Piana. Go to:

• Decision Tree: What Form of Strategic Restructuring Is Right For Us? Go to:

• Prepare Your Nonprofit Organization to Meet the Collaboration Challenge: Worksheets. Go to:

• Models of Collaboration: Nonprofit Organizations Working Together by the Lodestar Foundation. Go to: This is excellent!

• Nonprofit Mergers Workbook Part I: The Leaders Guide to Considering, Negotiating, and Executing a Merger by David La Piana. Based on experience with more than sixty mergers, this handbook is the perfect starting point for any nonprofit exploring a possible merger—and a basic resource for all nonprofit managers. Click to preview this book on

• The Nonprofit Mergers Workbook Part II: Unifying the Organization after a Merger by David La Piana. You've completed the merger agreement. Now, how do you make the merger work? Nonprofit Mergers Part II helps you create a comprehensive plan to achieve integration. Click to preview this book on

• Merging Nonprofit Organizations: The Art and Science of the Deal – Go to:

• Issue Brief: Investing In Nonprofit M&A – The Donor Perspective by Bruce Boyd and Reginald Jones, Arabella Advisors. Go to:

• Nonprofit Leadership and Administration Faculty at Western Michigan University. Merger Process Flow Chart, 1998. Go to:

• Nonprofit Mergers and Acquisitions: More Than a Tool for Tough Times. The Bridgespan Group. Go to:

• Karen Ray, The Nimble Collaboration, St. Paul: Fieldstone Alliance. 2002

• Shirley Sagawa, Creating “New Value” Partnerships with Business: Step by Step. Adapted for INDEPENDENT SECTOR by Shirley Sagawa from chapter 10 of Common Interest, Common Good: Creating Value through Business and Social Sector Partnerships, by Shirley Sagawa and Eli Segal (Harvard Business School Press, 2000). For a PDF version, go to: