Jul 28, 2015
As the popularity of nonprofit organizations grows, a problem may arise that many people may not have thought of - or at least thought would become a reality. There could eventually be a risk of multiple nonprofit organizations working to achieve similar, if not the exact same, goals within the same geographical area.
The problem with this is that the two organizations may hurt their cause more than they help. With multiple organizations pulling donors away from each other, they may make them feel like they have to choose between them. Instead of making a choice, the donors may take their business elsewhere. But the good news is that there is a solution to this conundrum: combining their efforts.
Merger vs. consolidation
If multiple nonprofits want to combine their efforts for the greater good of their cause, they have a couple of options to do so:
Merger: A merger is when two or more companies - or, in this case, nonprofit organizations - come together by means of one absorbing the other. This includes staff, finances, clients, donation software etc.
Consolidation: A consolidation is similar to a merger in the sense that it's two or more corporate entities coming together. But the difference here is that they both do away with their former identities, combine all of their resources and come back as one singular company or organization.
Depending on the status of the interested parties, either a merger or consolidation could be worth looking into. The end results could be practically the same either way, the most important of which being reduced costs that are now shared between two companies.
By getting out of each other's way and merging, two or more nonprofits could see that they're able to do more for their cause together than they would've been able to do on their own.