Charity Mergers Booming on Both Coasts

Funders encourage two social service agencies to merge in Boston, while Silicon Valley community foundations eye integration as part of a leadership transition.

Consultant and author Thomas McLaughlin of the accouning firm Grant Thornton laid it on the line in a recent Christian Science Monitor article:  Nonprofit mergers, he said, "used to be an 'm-word' I didn't dare say in public."  (This from the man who literally wrote the book on the subject.) 

But things are changing.  The Boston Globe reported back in April on the merger between the Women's Union (EIN 04-1983390 Form 990) and Crittenton (EIN 04-2104046 Form 990), two organizations with a long history of assistance to women and families.  Both organizations have annual expenses of about $5 million and a staff of about 100, and in many respects it appears to be a merger of equals.  Without saying so directly, the Globe article implies that local funders encouraged the merger as a way to reduce the number of organizations making appeals for similar causes. 

Yet mergers remain difficult.  A study back in 2000 on strategic restructuring surveyed 192 organizations about their restructuring experiences.  The biggest concern voiced by organizations was "loss of autonomy," "building trust," "staff adjustment to new roles," and "conflicting organizational cultures."  (The full study is available on the linked page, but registration is required.)   Because of the autonomy issue, sometimes the best time for a merger is when an executive leaves.

That's what could happen in Silicon Valley, according to Sal Pizarro of the San Jose Mercury News.   Sterling Speirn, the CEO of Peninsula Community Foundation (EIN 94-2746687 Form 990), was tapped to lead the W.K. Kellogg Foundation (EIN 38-1359264 Form 990 32Mb(!)) in Michigan.  Peter Hero has led the Community Foundation Silicon Valley (EIN 77-0066922 Form 990) since 1989.  The 62-year-old Hero is reportedly looking for a way to transition out.  So the two organizations are talking merger. 

The Peninsula group is a good bit larger than CFSV in assets ($565 million in December 2004 vs $375 million in June 2004), grants ($109 million vs. $59 million) and staff salaries ($3.8 million vs $2.3 million).  But Mr. Hero earns in the mid-$300,000s and Mr. Speirn in the low $300,000s.  A merger along with retirement of Mr. Hero could be a way to find a new director (reducing search costs) and fund and justify a severance agreement.

Mergers may be the best solution to the excessive number of nonprofit organizations, but the personnel issues mean that someone has to be in a position to push for that kind of strategic move at the right moment.   

Comments

[バーバリーマフラー]

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請求額や対象者を検討した上で、今月中にも提出したいとしている。提出後、６０日以内に東電が提訴しない場合、株主代表訴訟を東京地裁に起こすという。
株主の一人は「このままでは、過去の経営陣の責任追及があいまいになってしまう。裁判で責任の所在をはっきりさせるべきだ」と話した。一方、東電は「内容を把握していないので、コメントは差し控える」としている。

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[ティンバーランド]

ティンバーランド労組への配慮も顕著だ。会社員らの厚生年金と公務員らの共済年金の一元化問題では、公務員労組から支援を受ける議員が「人事院が来年２月に公表する会社員と公務員の退職金比較調査の結果が出るまでは、共済年金の特権的な上乗せ部分である職域加算の取り扱いを決めるべきではない」と主張。時間稼ぎをして法案の中身を骨抜きにしようという意図は明白だが、骨子案はあっさりとその主張を受け入れた。

　ティンバーランド首相は年末までに、社会保障分野と消費税増税部分をあわせた一体改革素案をまとめる方針だ。古本伸一郎党税調事務局長は１２日の党一体改革?税制両調査会合同会議で、「３１日の除夜の鐘のところまで、みなさんと相談していきたい」と強調したが、抜本的な改革は先送り必至の情勢だ。