I recently read, yet one more so-called expert advice column promoting the ultimatum of “merge” or “die” as the pathway for many nonprofits. In this iteration, the ultimatum arises out of the knee jerk reaction caused by the recent economic downturn. Citing duplication of service and competition for scarce resources, some foundations, philanthropists and many in the nonprofit consulting industry are becoming almost evangelical about the merger and acquisition strategy for social sector organizations.  For example, the leader of one organization that provides training and support to Oregon nonprofits made the statement that perhaps their agency “should serve as birth control for nonprofits,” adding that there are so many nonprofits and that money is scarce.  I agree that there are a fair number of nonprofits with bad business models and that even many stronger nonprofits have been severely damaged by the economic chaos of the last couple of years.  As I have posted elsewhere, I also agree that collaboration, at some level, is appropriate an appropriate strategic conversation for many nonprofit organizations.   However, having external funding agencies, philanthropists and a consulting industry pressuring nonprofits to either merge or acquire as “birth control” is, at best, narrow and unimaginative and, at worse, self-serving and bullying behavior. We would never think of being as paternalistic to “for profit” companies as we are towards social service agencies.

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While economic concerns among nonprofits are real and there are duplicative agencies competing for scarce resources, the driver for collaboration can’t be reduced to economics alone.  Economic solvency is a lazy marker for effectiveness or impact and to impose collaboration based on economics alone is misguided. Just as in the private sector, success for social sector agencies is determined by a combination of products or services, leadership, agility and capital.  Designing a facilitation process with nonprofit agencies facing financial challenges should not begin with the condescending assertion that merger is the assumed pathway. Rather, catalytic facilitation includes a multi-dimensional exploration of capital in the context of products or services, leadership, and agility.  I would like to suggest several guiding principles for facilitating such a process.

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Sovereignty:  In working with any organization, the spirit of sovereignty must be respected and embraced in the change process. Organizations in the midst of fiscal challenges need to be empowered from the strength of their sovereignty. While I believe that empowerment is a foundation of my consulting practice, empowerment becomes the dominant frame in a process might include as an outcome a collaboration that alters an agency’s autonomy.

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Aspiration: During times of fiscal challenge many organizations default to a “circle the wagon strategy ” where decisions are made from the framework of enduring the financial assault.  Unfortunately, this is precisely when the message of “merge or die” is often introduced from some “sage” consultant. In reality, the most helpful process to an agency is not an ultimatum to merge but is a process that  that focuses on aspirations. Economic challenges should cause an organization to refocus on mission and vision.  Considering the question of “why were we called to exist” can re-energize an organization to positively rethink the foundations of strategy and social impact.  Spending time on the aspirational question of “why” is critical as a precursor to considering any pathway to cope with economic challenges.

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Catalytic Innovation: I have been doing a fair amount of reading on the concept of “catalytic change” for social service organizations (see a couple resources below).  A key question of this emerging body of literature is “how can we create a strategy that achieves measurable impact?”  Implied in that question is looking for the second and third right answer and thinking bigger. The challenges imposed by economics are really opportunities to rethink “how” the “why” is implemented.  Spending time in the space of “how we get to the why” breeds innovation. The interests of convention, power and assumption that are united to say, “merge or die”  chokes the possibility of  innovation.

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Alternative Reality: I started out this post lamenting the over-simplistic “merge or die” advice being metered out nonprofits and suggest that agencies in the midst of economic turmoil need to take the opportunity to go deep within their core competencies to find their own solution.  However, in community organizing there is the old saying that “the price of success is a constructive alternative” and so the final step of the reflection and planning process is the creation of a thoughtful alternative plan.  Intentional planning for how an organization will move forward while under economic siege requires leadership, vision and boldness as well as tactical and measurable action plans.

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The organizations of tomorrow are being born out of the economic challenges of today.  The dominant voices argue that the organizations of tomorrow are those who are merging and acquiring today. I would argue that successful organizations of tomorrow are already visioning tomorrow and allowing the economic challengesof today to temper their core competencies of leadership, agility and innovation as they create their own future.  In this context there is a need for catalytic facilitation and process to help social sector organizations, thoughtfully reflect, plan and move confidently forward to create a more civil society.

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Resources:

Disruptive Social Change

Catalytic Philanthropy

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