MERGE OR PURGE

Not every nonprofit is meant to last forever.

When organizations face declining revenue, shrinking donor bases, mission drift, leadership instability, or increasing competition, leaders are often forced to ask a difficult question:

Should we merge... or should we close?

In this episode of Philanthropy N The Black, we break down the realities of nonprofit mergers, acquisitions, partnerships, and dissolutions. We explore why some organizations successfully combine forces to strengthen their impact, while others continue operating long after their mission, finances, or community support have faded.

We'll discuss:
✅ Warning signs your organization may need a merger
✅ When dissolution may be the most responsible option
✅ Why ego often gets in the way of sustainability
✅ Success and failure stories from the nonprofit sector
✅ Practical steps boards and executives can take before it's too late

Because sometimes survival isn't about standing alone. Sometimes it's about knowing when to evolve.

🎙️ Listen now and join the conversation.

#PhilanthropyNTheBlack #MergeOrPurge #NonprofitLeadership #NonprofitLife #Fundraising #BoardGovernance #MissionDriven #NonprofitManagement #CommunityImpact

Transcript

SPEAKER_01 0:01

Nonprofits love to talk about sustainability until sustainability requires making the hard decision. See, everybody wants to save the mission, the legacy, keep the name on the building. But sometimes the most responsible thing a nonprofit can do is not fight to survive. Sometimes the move is to merge, dissolve, or just to admit we're not helping the community anymore. We're just protecting an organization. Yo, welcome to another episode of Philanthropy in the Black. I'm your host, Sally Self, and today we're going to talk about merging or purging, getting them up out of there or consolidating for better efficiency when it comes to nonprofits in the nonprofit sector. So here's the thing Research shows that the nonprofit sector is kind of crowded, right? Organizations are competing for the same funding. Clients, volunteers, board members, public attention. Dorothy Norris Terrell's article frames merger as an alternative to total dissolving, right? When organizations face external or internal pressures, that's big, right? Framing it as an alternative to getting purged. That's what make it plain. That's what we do on this show. Make it plain. Listen, I've worked at nonprofits, and if you're in the sector, you have two where you know you look around at the work that is being done, and the mission can be A1. The mission can be God sent. It could be uh boots on the ground, but the execution, the infrastructure, something is lacking and keeping the mission from truly being fulfilled. And so what we're going to talk about just a little bit is the dirty word of merging when your nonprofit organization should consider consolidating with a like-minded, keep that in mind, we'll double back to that, a like-minded organization and when you shouldn't, right? So let's talk about it. Just because your nonprofit has a good mission, as I stated, doesn't mean it needs to exist forever. Um, Singer and Yankee, uh, a classic study looked at about 18 nonprofit mergers, acquisitions, and consolidations, and frame this as organizational metamorphosis, not always death, sometimes transformation. And that's huge because many, uh, when you think about it, it's like the end of a thing, the end of an era, and strategically, it could benefit not only your organization, but also the people you serve, right? A merger is not always a funeral, sometimes it's rebirth with better accounting, stronger leadership, and fewer duplicate programs. We're gonna talk about the truth of it, right? If we if we're gonna get into this, um the nonprofit fixer, uh Google that, uh, warrant warns that mergers do not automatically mean more money. Donors who supported both organizations, it's not like they go out to double up and give to one organization. Sometimes they just give the same amount to one. So it's not a um what we call a nonprofit fundraising fixer when you merge. It's absolutely not, right? So when nonprofits, can we tell the truth? I just want to know if we can tell the truth. We we family now. Y'all been rocking with me for about seven episodes. Can we tell the truth?

SPEAKER_00 3:24

You can't handle the truth.

SPEAKER_01 3:26

Well, probably. You know what, maybe, but I'm gonna say it anyway. I'm gonna say it anyway. Here's when I think uh what the research I should say shows when nonprofits should consider, start planning, strategically lay out, right? The mission still matters, but the organization is weak in some way. Programs are duplicative. There's no leadership succession, or it's shaky, which is big when you have a founding person, a person who founded the organization 20, 30 years in, and there's no succession plan. Uh, when administrative costs are eating the mission alive or you're unrestricted, the organization has strong programs but poor infrastructure. A partner can expand when a partner can expand your reach, improve quality, protect services. These are reasons to consider merger. Think about those. Recent merger research describes mergers as either a crisis response or a strategic move to adapt to external pressure and reduce duplication. That's when you should consider to merge. Now, let's get into when you should consider dissolving.

SPEAKER_00 4:39

You're hoarding, you're playing each piece like losing it hurts. This ain't checkers. You want my king. You got to come get my king.

SPEAKER_01 4:50

When non-profits should consider merging. I'm sorry, when nonprofits need to consider dissolving. Alright. Dissolving may not be the right choice when the mission is no longer relevant. I'm sorry, dissolving may be the right choice when the mission is no longer relevant. If your mission was we want to buy shoestrings for six kids in the ninth ward, and you do it, there you go. Your mission is no longer relevant, right? The organization has lost trust in some way. You know, we see in the news all the time the many things going on with our nonprofits and sometimes the uh fraudulent things when it comes to donor um support and how those things are handled. So if your organization loses trust, that's huge. If your board is inactive or negligent, and I'm I'll I'll take an inactive board over a negligent board, and sometimes you could use those words uh interchangeably. Um your programs are ineffective, when your funding has dried up with no realistic path forth, this again is when nonprofits should consider dissolving, or when the organization exists mainly to preserve egos, hmm, jobs or legacy, egos, jobs are legacy, not a reason to be around. If the community would be better served by your assets going somewhere else, then closing is not quitting. It's called stewardship, something we don't always do well. But before you merge, and there are many organizations, um, for instance, here in New Orleans, the Greater New Orleans Foundation, they have a fund. I mean, they come in and they work with the two organizations, they go through the whole checklist. It's probably a year-long process to decide if merging with that organization, those two organizations merging is a good look. You cannot beat that kind of support because this is not an easy process, right? But before you merge, here's what you should be asking are the missions truly aligned? If they're trying to solve for hunger, and we're trying to search uh save earthworms, not a good alignment, right? If the cultures are compatible, see that's big. Culture is big. Is one place more hybrid? One more remote, is one place uh uh, you know, those kind of things, culture. If it's a place that's more spiritual, do you pray before meetings or you know, those things when you look into culture of an organization? Do these folks feel safe, feel comfortable, feel productive? Culture in an organization compatibility is important. You should ask who would lead the new organization, right? Because there's nothing worse than bringing over the same idiotic leadership board to a new organization and screwing that up too. I just want to keep it real with you folks. What happens to your staff? Again, putting this out there long enough uh in advance and working and talking to staff is very helpful. Which brand survives? This one or that one? What happens to your assets, your debts, contracts, your debt contracts, your grants, and restrictive funds? Important. Have donors, clients, staff, and community partners been told the truth? Why are we considering this? Are we we are considering this? And here's why. The partnership is important, explaining is important, pulling your people in is important. Is this about mission or ego? Again, is this about mission or ego? Forbes, the magazine, notes that successful mergers require financial transparency, a clear rationale, cultural cape comp I'm sorry, uh compatibility, board support, early communication, and a clear leadership structure. Gotta know why we're doing it and when we're doing it. Here we go. Here's the truth. You can't handle the truth. Some nonprofits need to merge with others. Some nonprofits need to be purged. They've met their mission. I used to say early in my career, we should be working ourselves out of a job. Our mission should have an expiration date. And some nonprofit leaders need to stop confusing their organization survival with the community survival, right? Listen, the community's been here, it's gonna be here. You did your part, great, but the community will not end if your organization dissolves or merges. The mission is sacred. But the corporation, the logo, the board title, the funders' feelings, those are not sacred things, my people. If merging protects the mission, merge. If dissolving protects the community, dissolve. But don't sit there broke, duplicated, understaffed, and ineffective pretending survival is the same thing as impact. This is how nonprofits end up in the red, financially, socially, and morally. It is absolutely important that in this current climate with funding cuts, government weight, the government funding cuts, uh, war, um, you name it, the competition, the the immense number of nonprofits that are in this space, that we all take a look at why we exist, how we exist, and should we continue to exist. And if you can serve the community by partnering with a like-minded organization, that's beautiful. But if you are just protecting the name of an organization, that's not a good reason to exist at all. This has been your boy, Sally Cell, Philanthropy and the Black. Merge or purge. There's a time under the sun, all things must come to an end. Peace.