MN Community Action Redesign Explorations August 8, 2014
Agenda • Redesign basics: • Shared Services, Shared Employees, Collaborations, Merger • Minnesota CAA experiences • Discussion • Resources
Next slides courtesy of CAPLAW, www.caplaw.org Redesign Basics: Why Share Services, Collaborate, or Merge?
Environmental Factors • Reduced government funding • Reduced private funding • Increased competition • Growth in number of nonprofits • Difficult economic landscape • Increased operational costs • Increased demand for accountability • Increased demand for services
Improve, Expand, or Preserve Services • Increase organization’s reach or mission • Enhance program integration • Expand service area • Expand client base
Strengthen Financial Position • Achieve economies of scale • Diversify revenue streams • Expand donor base • Increase assets • Save a failing entity (through merging)
Enhance Organizational Capacity • Greater staff experience • Improve internal systems (IT, HR) • Expand/consolidate space • Enhance community relationships and engagement • Improve image, reputation, marketing, branding
Redesign Basics: Key Considerations
What Do We Hope to Achieve? • Merger/partnership will lead to something new that could not exist without the joining of compatible strengths • Form (choice of partner and structure) will follow function (what we hope to achieve)
When to start? • Before it is necessary (i.e., before there is a crisis/before programs have been damaged) • Often leadership transitions can be a good time to initiate conversations internally and externally (especially re: mergers)
First steps • Organizational self ‐ assessment • Motivations • Desired goals • Critical issues • Organizational obstacles and red flags • Financial position
Preconditions for Success • Trust (e.g., through familiarity with partner) • Clear strategic planning and vision for the merger or partnership compatible with both organizations’ missions • Merger champion (board member or executive director) and board leadership • Experienced executive director • Board and staff buy ‐ in (particularly for mergers)
Preconditions for Success (cont’d) • Thorough due diligence • Attention to organizational culture and integration issues, internal and external communication
Some Potential Road Blocks (for Mergers Especially) • Concern about loss of identity • Costs and time involved • Short ‐ term focus on day ‐ to ‐ day operations and survival, difficulty focusing on long ‐ term • Funding source rules • Lack of board or staff buy ‐ in • Underestimating differences in organizational culture • Lack of attention to communication strategy
Minnesota Community Action Network Recent redesign explorations – Mahube ‐ Otwa – SW Partnership – Three Rivers/Olmsted – AEOA/Kootasca – Lakes & Prairies/WCMCA
Roundtable Discussion with MN Community Action Agencies
Resources • CAPLAW (www.caplaw.org) CAPLAW staff attorneys and professional staff are available for consultation on a wide variety of legal and financial issues. Topics addressed include CAA mergers and shared services. Additional case studies and web ‐ based resources on shared services and mergers are forthcoming. For example, How Sharing Services Can Help Do More With Less , by Peggy Eagan, Children and Family Service Center, Charlotte, NC can be found here: http://www.caplaw.org/conferencesandtrainings/webinardocuments/2012/CA PLAW_SharedServices_May2012.pdf
Resources (cont’d) • MAP for Nonprofits Provides assessment of and support for nonprofit realignment. Learn more at: http://www.mapfornonprofits.org/ See their publication “Merge Minnesota: Nonprofit merger as an opportunity for survival and growth” here: http://nonprofitfinancefund.org/files/images/initiatives/mergeminnesota_ma pfornonprofits.pdf MAP for Nonprofits and Wilder Research issued a report Synopsis: Success Factors in Nonprofit Merger which describes findings from a study of 41 direct service organization mergers in Minnesota between 1999 and 2010. http://www.mapfornonprofits.org/wp ‐ content/uploads/2013/10/SuccessFactorsFullReport.pdf
Resources (cont’d) • Compasspoint “The M Word: A Board Member’s Guide to Merger” can be found here: http://www.compasspoint.org/sites/default/files/docs/research/445_mwordfi nal2005.pdf • Greater Twin Cities United Way Convened a half ‐ day New Structures for New Times forum on the topic, and shared new Minnesota ‐ based research identifying success factors. More information including compiled resources can be found at: http://unitedfrontmn.org/unitedwayforums/mergers ‐ resources/
THANK YOU FOR YOUR PARTICIPATION! Joelle Hoeft Office of Economic Opportunity (OEO) 651.431.3813 Joelle.hoeft@state.mn.us
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