Newly Formed Edward Charles Institute for Nonprofit Mergers and Acquisitions Focused on Helping Charities Hurt by the Recession
The troubled economy has made merging with or acquiring another organization the most urgent task for senior managers of many struggling nonprofits. This issue is critical according to the February 2009 BridgeSpan Group report. It reported that 20 percent of its Group Poll respondents said, “Mergers could play a role in how they respond to the economic downturn.”
“The Edward Charles Institute for Nonprofit Mergers and Acquisitions is the only national organization whose main mission is to become the merger and acquisition firm of choice for nonprofits, their lawyers and accountants,” announced Institute CEO Robert McKim.
“We are matchmakers,” said McKim. “The Institute has developed a nonprofit survival program that is unique to the nonprofit industry.”
According to Glenn Collins of the New York Times, “Some 85 percent of the New York City’s nonprofits have annual budgets under $3 million.”
“And most of them don’t have endowments or cash reserves,” said Fran Barrett of the Community Resource Exchange, which provides management and financial help to about 300 community groups. “Some smaller organizations will have to shut their doors.”
Mergers and acquisitions are a way for nonprofits to shore up finances, make their organization appear more attractive to funders and address a potential succession vacuum. These are among the reasons nonprofits are pursuing merger and acquisition activity as they react to market conditions and move quickly to strategically increase their geographical footprint and reap the benefits of economies of scale.
Most professionals acknowledge that merging requires a delicate approach.