Leadership Lessons From Nonprofit Mergers And Closings
Financial challenges facing nonprofits are driving organizational mergers and closings. Because the role of the nonprofit board is to ensure that the organization’s assets are used for designated purposes, the board must be thoughtful in deciding if and when a nonprofit is no longer viable, and then exploring options for the future. There are valuable leadership lessons to be learned from boards that have undertaken the serious responsibility of merging or closing a nonprofit.
Consider that nonprofits provide vital services in education, housing, healthcare, employment, international development, and the environment, among others. The continuity of particular services might be essential to the welfare of certain people in a community; the legacy of a mission might be valuable to the future of the world.
David H. Roe, a Rhodes Scholar, Brig. General USAF (Ret.), and successful business executive, chaired the board of the U.S. Center for Citizen Diplomacy (USCCD), when they decided that the organization was no longer financially viable. USCCD had been dependent on private philanthropy and one donor in particular. After two years of deliberations, the USCCD board and CEO decided to merge with CDC Development Solutions (“CDS”) in the summer of 2012. (Note: CDS is a client.)