Collaboration, co-ordination, co-operation, efficiency, effectiveness, consolidation, and merging.  These are concepts that have all been tossed around in the Charity and Not for Profit (NFP) sector over many years.  

But what do mergers in the sector actually mean, what is required to make it happen and why should this concept be a strategic issue right now for the sector in New Zealand?

A few years ago we profiled a case study of a successful merger of two independent Alzheimers organisations in Auckland, Alzheimers Auckland (AA) and Alzheimers Counties Manukau (ACM).  

This successful merger process back in 2010/2011 was led by the then manager of Alzheimers Auckland, Bonnie Robinson who kindly presented a seminar on this experience for our clients and contacts at the time.  The Alzheimers experience of merging was overall very positive. It has allowed the combined organisation to be and do more.

Reflecting on this issue in 2016 we see the topic of collaborations and mergers remains just as relevant, if not more so thanks to continued changes in the sector.  Especially changes regarding funding and delivery models. 

Accordingly, we thought it worthwhile to revisit Bonnie’s sage observations and advice and the Alzheimer Auckland experience and case study as it remains as relevant today as it did back in 2012.

Bonnie Robinson reported on the following key outcomes:

Stronger governance

With two Boards merging, we were able to get the best of both Boards and attract new people with skills required to the Board.

Increased number of service delivery staff

We were able to increase the number of front line staff by 5 - for the same total budget as previously.

Doubling of aspects of service delivery

When we merged and restructured roles, we were able to release capacity that more than doubled the number of carers education courses we were able to run.  Merging doubled our service delivery - for the same overall budget.

Stronger management structure

Previously both organisations had the management structure that they could afford - rather than one that made sense.

With the merger we were able to look at what the organisation really needed.

Financially stronger

We were able, with the same budget, to hire in a second fundraiser, and therefore increase our potential to raise funds, plus now that we were Auckland-wide there were better opportunities for corporate sponsorship.

More robust organisation with greater potential to continue to grow

Generally, Alzheimers became a stronger organisation, and better able to manage any changes that might be coming.

So if merging is such good news why don't more charitable and NFP organisations merge?

This question is another complete topic in itself!  However, if you had to identify a few of the common impediments to mergers they would be sovereignty concerns, egos and job protection.  And with the passion that is commonly found in our charitable and NFP sector these can be very strong impediments indeed. 

The Alzheimers Auckland merger experience has been good news, but even very successful mergers or collaborations are not a simple, easy or cost free process.  They are also only applicable to certain entities.  However, Bonnie’s case study shows that they can be successfully achieved, and details some of the key features required to do so. 

For more information on this merger experience you are welcome to contact Bonnie Robinson. 

The RSM audit team are also very happy to assist with your considerations in this area.