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At a recent meeting of Boston nonprofits, a community leader announced that a committee of concerned citizens was seeking to help multiple nonprofits to think about mergers.

Until recently, small social agencies successfully provided programs with a combination of state funds, private donations and foundation grants. Today, state contracts are rapidly shrinking, private donors have less capacity, and foundations cannot fill the gaps.

The community leader said his foremost concern in these times is constituents, not that organizational boundaries be preserved. If you are considering a merger, your first question should be: “Will our clients be better served by a merger?” The next question is “What will make the merger process work?”

In our experience with merger projects, Management Consulting Services (MCS) has learned a number of lessons. We would like to share our lessons with you if you are looking for a merger partner.

Important Features in a Merger Partner
In the past, organizations seeking a merger partner would have the luxury of a long courtship period, followed by lengthy negotiations leading to a prolonged implementation period. Today, the new partners are likely to be on a schedule more like speed dating. They must select the right partner and move quickly to realize the expected benefits.

Are our programs having the Impact we want?  Do program Finances justify a program’s viability?  How can we identify strengths and weaknesses?

Executive Directors are striving to cope with shrinking budgets.  If programs must be cut or curtailed, what approach helps with decision making?  Management Consulting Services (MCS) has developed a process and tools for program analysis.   Executive Directors, and their Boards, have found the MCS approach to be helpful.

Step 1.  Develop Program Assessment Criteria

The process begins with definition of the criteria to be used in evaluating programs.  Recently, an MCS client agreed to the following criteria for its programs:

"Most prefer the security of known misery to the misery of unfamiliar security."  Sheldon Kopp

There is no doubt that a great wave of fear has fallen over the nonprofit sector and indeed the nation.   The constant barrage of bad news, while tempered by the jubilation surrounding the historic inauguration in Washington, affects our psyches as we approach each day a bit more unsure than the previous.      Einstein said that problems can not be solved at the level of analysis that created them and yet we try.  We are attempting to solve problems in which the allusive answers seem to create their own host of other problems.  Downsizing may temporarily help our organization, but how then will we continue to provide essential services?  We attempt to expand our individual donor base, but if all nonprofits make the same attempt how effective will we be?   The conversation about the generational shift in leadership change has shifted to a fear that the sector will lose its young and entrepreneurial talent to layoffs.   In most cases there are no good answers, only better solutions. 

As a provider of strategic planning, strategic technology, and other technical assistance services to nonprofit organizations throughout the Greater Boston area, those of us at Management Consulting Services (MCS) readily see the impact of the worsening economic crisis on the sector. We recently conducted a survey of nonprofits in Massachusetts to gauge the impact of the economic crisis on the nonprofit sector in order for us to talk about the effects using some data rather than anecdotes. This report presents the findings from this survey.Following were some of the major findings from this survey:a.    While organizations of all budget sizes anticipate the economic downturn impacting their organization, organizations with smaller budgets indicate that the impact will be greater compared to organizations with larger budgets.

As we head for a changing of the guard in Washington DC, the Obama government will take over a country facing its toughest economic challenge since the Great Depression.  Nonprofit staff and boards are worried as an impending financing challenge awaits the nonprofit sector in the coming year as donations, foundation grants and state funding are cut. Despite this perilous situation and despite having a huge role in the economy, the nonprofit sector is largely missing from the public discourse on the economic crisis. Nonprofit professionals and board members need to ask why we are not part of the conversation and how we ensure that our interests are going to be heard in public policy decisions that affect the sector.

Why the Nonprofit Sector Must Speak Up

While the Great Depression provided much of the impetus for government run safety net programs, social services are now largely delivered by the nonprofit sector. Over the last 30 years, government has devolved much of its traditional responsibilities to the sector (whether this is a good thing or not is a subject for a different blog). As the economic crisis takes hold, the demand for nonprofit human services, food from food pantries, and services in other sectors such as workforce development will increase dramatically. While demand is increasing, the supply of services will decrease as donors and state governments cut back. If our missions are to survive, we need a much stronger voice in public policy affairs.

Last week I was a speaker at the Boston Fundraising Summit, sponsored by the Center for Nonprofit Success. My session was focused on how to conduct successful research in the search for funders. Here is a listing of resources I prepared for the summit that may be helpful in your own work. Good luck!
Provided Free of Charge:
Guidestar (www.guidestar.org) - obtain IRS 990 forms for every nonprofit, including foundations; also lists board members
Grants Management Associates (www.grantsmanagement.com) - manages many local foundations and provides application guidelines
Bank of America Philanthropic Services (www.bankofamerica.com/philanthropic/grantmaking.action) - provides a searchable database of about 70 foundations for whom Bank of America is the trustee, co-trustee or agent.
Philanthropy News Digest (www.foundationcenter.org/pnd/rfp/) - sends weekly updates on new RFP's and has a searchable online database of RFP's
Association of Small Foundations (www.smallfoundations.org) - has a list of members organized by state, many with direct links to the foundation website.
Council on Foundations (www.cof.org) - has many useful links to databases and resources available online for grantseekers.
Cooperating Collections (http://foundationcenter.org/collections/) - free funding information centers in libraries, community foundations, and other nonprofit resource centers that provide materials and services in areas useful to grantseekers, such as access to Foundation Center's Directory.