Mergers: Why, When and How? Panelists: Jennifer Duston ... - ACSO
Mergers: Why, When and How? Panelists: Jennifer Duston ... - ACSO
Mergers: Why, When and How? Panelists: Jennifer Duston ... - ACSO
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Association of California Symphony<br />
Orchestras presents<br />
<strong>Mergers</strong>: <strong>Why</strong>, <strong>When</strong> <strong>and</strong> <strong>How</strong>?<br />
June 22, 2011<br />
10:30am – 11:45am<br />
<strong>Panelists</strong>: <strong>Jennifer</strong> <strong>Duston</strong> & Gary Holt<br />
Moderator: Kathryn Martin
Kathryn Martin,<br />
Vice President - San Diego<br />
Growing Institutions. Advancing Arts & Culture. Enhancing Communities.<br />
New York, Washington DC, Boston, Chicago<br />
Los Angeles, San Diego, San Francisco, Portl<strong>and</strong>, Seattle<br />
www.artsconsulting.com
<strong>Jennifer</strong> <strong>Duston</strong>,<br />
Executive Director<br />
Oakl<strong>and</strong> East Bay Symphony/<br />
East Bay Performing Arts<br />
Gary Holt,<br />
Artistic Director<br />
San Diego Gay Men’s<br />
Chorus
Session Outline<br />
• Background Information & Situation Analysis<br />
• Reasons to Consider Partnering<br />
• Partnership Options<br />
• The PROCESS: Exploratory Phase to<br />
Implementation<br />
• Impact <strong>and</strong> Outcomes<br />
• Lessons Learned<br />
• Conclusion & Reflections<br />
• Questions & Discussion
Background & Situation Analysis<br />
June 2010 Merger of<br />
Oakl<strong>and</strong> East Bay Symphony<br />
Oakl<strong>and</strong> Youth Orchestra<br />
Oakl<strong>and</strong> Symphony Chorus<br />
Creating:<br />
East Bay Performing Arts<br />
January 2010 Merger of<br />
Gay Men’s Chorus of San Diego<br />
San Diego Men’s Chorus<br />
Creating:<br />
San Diego Gay Men’s Chorus
Catalysts for Considering a<br />
Merger or Strategic Partnership<br />
Challenges<br />
• Financial Challenges<br />
• Competition<br />
• Decreased<br />
Contributions<br />
• Br<strong>and</strong> Confusion<br />
• Loss/Gain of Venue<br />
Opportunities<br />
• Programming<br />
• Funding<br />
• Cost Efficiencies<br />
• Strategic Initiative<br />
tied to Mission, Vision<br />
<strong>and</strong> Community<br />
Impact
Merger & Strategic Partnership Continuum<br />
Collaboration<br />
• No permanent organizational commitment; Decision making remains with<br />
each organization<br />
Strategic Partnership<br />
• Administrative collaborations <strong>and</strong>/or Joint programming with a formal<br />
agreement<br />
Management Service Organization<br />
• New organization responsible for administration with independent<br />
governance<br />
Joint Venture<br />
• New organization responsible for administration or programs with joint<br />
governance<br />
Parent-Subsidiary<br />
• Single organization governs the administration <strong>and</strong> programs of other(s)<br />
Merger<br />
• Integration of all administrative <strong>and</strong> programmatic functions into one entity
An Exploratory Process<br />
• Taking the “First” Step<br />
• Preparation Phase<br />
• Joint-Committee Visioning/Discussion Phase<br />
• Exploration/Due-diligence Phase
Due Diligence is Key<br />
ORGANIZATIONAL DOCUMENTS<br />
• Articles of incorporation, Bylaws, Board listings (incl officers), Board minutes, tax documents, IRS <strong>and</strong><br />
State tax exemption letter, IRS 990 filings (3 years), State of CA tax filings (3 years), etc.<br />
INSURANCE DOCUMENTS<br />
• Copies of policies/coverages/riders, Director & Officer copy, workers comp info, umbrella/other liability<br />
coverages, etc.<br />
PERSONNEL DOCUMENTS<br />
• Listing of current employees <strong>and</strong> pay levels, employment contracts, personnel policies, collective<br />
bargaining agmts, vendor contracts, other policies <strong>and</strong>/or personnel docs, etc.<br />
FINANCE / FUNDING<br />
• Current income statement & balance sheet, 3-years audited financials, including management letter,<br />
credit lines/fin'l indebtedness, listing of all liabilities, schedule of all assets, loans/liens, conflict of<br />
interest, Board compensation, grants (transferable? multi-year?), planned gifts/bequests,<br />
endowments/trusts, restricted funds, etc.<br />
CAPITAL / REAL ESTATE<br />
• Deeds, leases (building, equipment, offices, venues, etc.), mortgages, equipment/vehicles, zoning/use<br />
permits, real estate records, etc.<br />
OTHER<br />
• Licenses, accreditations, certifications, marketing pieces, pending litigation, government<br />
investigations, employment tax compliance, sales tax certificates, domain names, trademarks, etc.
An Exploratory Process (cont.)<br />
• Community Engagement, Stakeholder<br />
Interviews<br />
• Reflection & Affirmation: Is a merger the right choice?<br />
Are we going to proceed <strong>and</strong> draft a plan for Board approval?<br />
With due-diligence concluded & consensus<br />
achieved…<br />
• Plan preparations can begin – building the<br />
detailed framework for the new organization<br />
• A draft plan presented for approval by the<br />
boards
Implementation Process<br />
• The Final Stage: Implementation Begins!<br />
Transitioning to the new organization<br />
• Success! It’s Official!<br />
Leveraging the opportunities!<br />
• Active Follow-up Phase after the merge
Impact & Outcomes<br />
Today, it is doubly important to strategically look at all<br />
options <strong>and</strong> opportunities available to increase our impact.<br />
Not just to survive, but to effectively <strong>and</strong> powerfully serve.<br />
Potential long-term benefits of Strategic Partnerships:<br />
• Improved br<strong>and</strong> awareness?<br />
• Larger market share?<br />
• Greater political advocacy?<br />
• Better fundraising capacity?<br />
• Effective <strong>and</strong> focused management?<br />
• Highly engaged <strong>and</strong> connected Board?<br />
• Economies of scale / financial savings?<br />
• Increased ability to serve the community?<br />
• Other?<br />
Make a real <strong>and</strong> lasting difference in your community!
In Conclusion<br />
• Think strategically, rather than reactively<br />
• Frame discussions in the context of impact to the<br />
community, mission <strong>and</strong> vision<br />
• Emotions can be mercurial <strong>and</strong> unpredictable –<br />
plan for this.<br />
• Follow a formalized <strong>and</strong> guided process to ensure<br />
relationships are left intact <strong>and</strong> strengthened – no matter<br />
what the outcome<br />
• Don’t be tempted to “skip” steps!<br />
• The journey itself builds strong consensus, renews<br />
br<strong>and</strong> identity, <strong>and</strong> creates a strong value<br />
proposition within an organization <strong>and</strong> community.
Questions & Discussion
Thank you!<br />
<strong>Jennifer</strong> <strong>Duston</strong>, Executive Director<br />
Oakl<strong>and</strong> East Bay Symphony/East Bay Performing Arts<br />
• Tel: (510) 444-0801<br />
• jduston@oebs.org<br />
• www.oebs.org<br />
Gary Holt, Artistic Director<br />
San Diego Gay Men’s Chorus<br />
• Tel: (877) 296-7664<br />
• artisticdirector@sdgmc.org<br />
• www.sdgmc.org<br />
Kathryn Martin, Vice President<br />
Arts Consulting Group<br />
• Tel: (858) 761-4928<br />
• kmartin@artsconsulting.com<br />
• www.artsconsulting.com
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