Success Factors in Nonprofit Mergers - Minnesota Council of ...

Success Factors
in nonprofit mergers
Factors proven to make nonprofits mergers more likely to succeed
The 41 mergers described in this report took place between 1999 and the first half of
2010. They were distributed across the years with a high of nine mergers occurring in
2009 and a low of one merger occurring both in 2000 and 2002. The number of mergers
in the sample ranged from two to five in each of the remaining years, and the number of
mergers increased in the second half of the decade.
The merged organizations fell into 16 of the possible 26 broad National Taxonomy of
Exempt Entities (NTEE) classifications. The most frequent categories included: human
services especially, family services, personal social services, emergency assistance, and
independence for special populations; youth development such as scouting; and arts,
culture, and humanities.
The merged organizations were located throughout Minnesota, with 59 percent located in
the seven-county metropolitan area and 41 percent located in greater Minnesota.
Methods
To learn more about nonprofit mergers in Minnesota, the research team designed a
rigorous research method based on the acquisition and use of multiple data sources
for each merger. This started with defining eligibility and sampling criteria, and
progressed to selecting and engaging multiple participants in each merger, designing
and conducting in-depth telephone surveys with each respondent, gathering financial
data filed for tax purposes, and analyzing the study results using both qualitative and
statistical methods.
Eligibility
To ensure that the pool of potential participants included all possible mergers, the
study team obtained a comprehensive list from the Office of the Minnesota Secretary
of State which was reviewed to determine study eligibility. To be eligible a merger
needed to include direct service organizations and had to have occurred between
January 1999 and June 2010. For each of the eligible mergers, at least one organization
ceased to exist, there was a transfer of programs or services, and there was a transfer
of assets or staff.
Of the 66 potential mergers contacted to be a part of the study, 46 were determined to
be eligible for participation. Of those, 41 agreed to participate resulting in an 89 percent
participation rate.
Success Factors In Nonprofit Mergers 19 MAP for Nonprofits & Wilder Research 2012