Is the Consolidation Trend Hitting the Nonprofit Sector?

For Immediate Release               

For Further
Information Contact:
Amelia Kohm
773/256-5154
kohm-amelia@chmail.spc.uchicago.edu

Is the Consolidation Trend Hitting the Nonprofit Sector?

New Study Explores Mergers, Integrations,
and Alliances among Nonprofits

The nonprofit landscape is changing. Increasing numbers of nonprofits, decreasing public funds, and managed care policies, among other forces, are causing many nonprofit organizations to consider new ways to manage and finance their programs. One approach called "strategic restructuring" encompasses a range of organizational partnerships, from jointly managed programs and consolidated administrative functions to full-scale mergers.
Despite growing interest in these types of alliances and integrations, little is known about the spectrum of current practices and still less about how well they work. A team from the Chapin Hall Center for Children, a policy research center at the University of Chicago, and Strategic Solutions, a California-based project of La Piana Associates, Inc., collected information from 192 nonprofit social services and cultural organizations around the country that volunteered to share their strategic restructuring experiences. The research team hopes that this work will support nonprofits exploring strategic restructuring.

"Organizations considering such partnerships are hard-pressed to find information on similar endeavors that could serve as models or illuminate their efforts," says David La Piana, author of Beyond Collaboration: Strategic Restructuring of Nonprofit Organizations and co-director of the study. "Their only reference point may be the information in the press about large corporate mergers, which differ from nonprofit consolidations in significant ways and shed no light on other types of alliances."

A report on the findings of Phase I of the two-part study, which was made possible through the support of the Nonprofit Sector Research Fund of the Aspen Institute and the Lilly Endowment Inc., includes:

§ Descriptions of different types of strategic restructuring partnerships such as: administrative consolidations, joint programs, management service organizations, joint ventures, parent-subsidiary structures, and mergers;
§ Profiles of nonprofits involved in each type of partnership; and
§ Survey findings on the motivations, goals, benefits, and challenges involved in strategic restructuring.

For a copy of the report, call 773/753-5940.
Question about the study should be directed to Amelia Kohm, co-project director, at 773/256-5154.
She is available for interview. Photos of authors are also available.