For-profit executives use business models—such as “low-cost provider” or “the razor and the razor blade"—as a shorthand way to describe and understand the way companies are built and sustained. Nonprofit executives, to their detriment, are not as explicit about their funding models and have not had an equivalent lexicon—until now
A Bridgespan Group poll of nonprofit executive directors found 20% of 117 respondents stated that mergers could play a role in how they responded to the economic downturn. This finding dovetails with Bridgespan’s new, far-reaching study of more than 3300 nonprofit deals across four states over 11 years. The longitudinal research finds nonprofit merger and acquisition activity occurring at the same rate in the nonprofit sector as in the for profit sector, but with a heavy skew to small deals born of financial distress or leadership vacuums. Few nonprofits pursue mergers for longer-term strategic goals and mergers involving large nonprofits happen at just one tenth the rate of such deals in the corporate sector, a watch out as nonprofits turn to mergers in tough times.