Understanding Nonprofit Mergers and Acquisitions: A Primer

“Merger-mania” has come to be a prominent defining characteristic of the nonprofit sector in the first decade of the 21st Century, as a growing level of organizational consolidation provides strong evidence that a wide-spread restructuring of the sector is underway. The article linked below provides an executive overview of contemporary literature on nonprofit mergers, with cites and references to support continued study, as well as a summary of the ways in which nonprofit organizations can consolidate, key considerations before such actions are taken, and an overview of the due diligence process required to bring a merger to fruition. At bottom line: such actions are not for the faint of heart, though when executed with caution and care, they may provide immense improvements in efficiency and the quality of services that nonprofits can offer to their communities.

Understanding Nonprofit Mergers and Acquisitions: A Primer

Introduction to Strategic Planning for Nonprofit Corporations

Strategic planning may be broadly viewed as an iterative, two-part undertaking. In the first part of the process, an organization defines a vision for the future that is consonant with its mission. In the second part of the process, the organization then allocates financial, capital and human resources toward achieving this vision. The two parts of the process must be linked with regular feedback mechanisms that allow both the vision and the allocation of resources to evolve, together, to meet emergent opportunities and challenges.

For a nonprofit corporation, the Board of Directors is tasked with determining the organization’s mission, and must, therefore, play a central role in strategic planning, to either ensure that the organization’s vision supports its mission, or (in rare cases) to amend the organization’s mission should a particularly compelling vision of the future or extreme circumstances require such a change. In broad terms, then, the Board’s role in strategic planning is tied to the first functional element described above: the definition of vision.

The second functional element (allocation of resources) is typically the purview of the organization’s staff, with the Board’s members providing the oversight (but not management) necessary to ensure that the Board collectively satisfies its fiduciary responsibilities. Both the organization’s mission and the Board’s vision must be clearly, effectively communicated to the organization’s Executive Director, who is then tasked with managing the resources needed to bring the vision to fruition.

Strategic planners must recognize a principle most eloquently elucidated by General Dwight D. Eisenhower during planning for the invasion of Normandy: “Plans are nothing; planning is everything.” Planning is a dynamic, ongoing enterprise, not an occasional activity resulting in a static, printed plan that is likely to become obsolete soon after it is created. Planning is a process, while plans are tools—and no tool should ever be held in greater reverence than the process it supports.

Key elements to be evaluated as part of a strategic planning process should generally include:

  • Human, capital and financial resources, ensuring that the Board’s vision can be achieved without undue burden to the organization’s capital, financial or personnel assets; this may require identification, cultivation and solicitation of new donors, sponsors or grant-makers;
  • Physical needs and infrastructure, with emphasis on keeping an organization’s equipment and facilities up-to-date within a reality-based budgeting process, and on developing local solutions that consider best industry practices;
  • Services provided by the organization, with emphasis on the quality and quantity of services provided, recognizing opportunities to better serve constituents through new services, and equally recognizing when certain services have either run their course, or require a significant course correction to remain viable;
  • Contractual obligations and opportunities, keeping abreast of contract terms and conditions, working to schedule procurement actions as needed to ensure uninterrupted services, and also taking advantage of the sponsorship or philanthropic opportunities that arise as part of contractual negotiations;
  • Environmental and political ramifications of all the organization’s activities, considering how the organization may best support a sustainable, healthy community, linking all constituencies and stakeholders.

By undertaking an iterative, dynamic strategic planning process, nonprofit organizations can be reinvigorated and refocused on a shared, clearly-defined vision. With proper strategic planning, nonprofit organizations will be better able to serve their constituents in an era of rapid change in the charitable sector, ideally creating market opportunities where challenges and competitors once stood.

A Model for Municipal Management

I wrote this article in 2008 as part of an urban and regional planning seminar. It attempts to provide a modeled framework within which municipal managers may maximize the civic impact of their planning and financial decisions. Click on the link below to open the PDF version of the article.

A MODEL FOR MUNICIPAL MANAGEMENT

Implementing Idealism: HIV Testing and Confidentiality in New York State

Acquired Immunodeficiency Syndrome (AIDS) is a disease of the immune system caused by the human immunodeficiency virus (HIV), which renders people vulnerable to life-threatening infections and cancers. In the early 1980s, during the nascent days of the AIDS epidemic, there was significant social stigma and fear associated with AIDS infection, as the disease first manifested itself through outbreaks of rare cancers among young gay men in California and New York. HIV was discovered and identified as the AIDS-causing virus in 1984, and prevention education efforts thereafter have focused on HIV testing as a key tool for enabling individuals to best protect themselves and others from infection or transmission. Given the ongoing social stigma associated with AIDS, however, privacy and confidentiality provisions associated with HIV testing remained paramount, and had to be addressed before testing could become widely useful among populations who were fearful that they could be harmed, persecuted, institutionalized or otherwise discriminated against as a result of a positive HIV test.

New York State enacted a seminal piece of legislation in 1989 as Public Health Law Article 27-F (Pub. Health L. §§ 2780-2787): “HIV Testing and Confidentiality Law.” The initial Article 27-F provisions have been amended since their passage, and were significantly supplemented in 1998 with the passage of New York State Public Health Law Article 21, Title III, (Pub. Health L. §§ 2130-2139): “HIV Reporting and Partner Notification Law,” the provisions of which went into effect in 2000. These laws specifically applied to, and had to be implemented by: physicians and others authorized to order lab tests or make medical diagnoses; persons who receive HIV-related information in the course of providing health or social services; persons who receive HIV-related information pursuant to a release; or health care providers or other medical services plans.

The seemingly simple concepts behind these laws were subject to a great deal of interpretation and ambiguity. While both Article 27-F and Article 21, Title III have been successfully implemented, the machinery required to support their provisions is far more complicated and loophole-ridden than that originally envisioned by the pioneering legal and social activists who first advocated for the confidentiality provisions now embodied in the New York State’s health laws. In the 2007 article connected to the link below, I discuss the challenges, complicating factors, approaches taken in the implementation process, and outcomes associated with applying the noble idealism embodied in Article 27-F in the crucible of the “real world” in which State and nonprofit agencies operate. The article also provided broad lessons learned and strategy recommendations for those tasked with implementing public policy, especially when they will be blazing trails while they do it.

Implementing Idealism: HIV Testing and Confidentiality in New York State

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