Is a Strategic Alliance Right for Your Nonprofit?

Ellen Winiarczyk is the academic director and faculty for the Nonprofit Leadership graduate program at University College at the University of Denver.

In the 2008-2011 economic  downturn the nonprofit sector experienced an increase in mergers, acquisitions (M&A), or other types of strategic alliances (Bridgespan Group. 2009.) Seventeen percent of 117 US executive directors had considered an M&A strategy. The societal pause brought on by COVID-19 causing stay-at-home policies across the world has caused many nonprofits and nongovernmental organizations have closed their doors, furloughed workers, and paused or stopped services. Governments, foundations and corporations everywhere are preparing for revenue losses meaning less grants, as well as donations, for nonprofit and nongovernmental organizations.

Dire as this sounds, this unique situation presents an opportunity for nonprofit leaders to strategically examine their mission, vision and value proposition to consider a collaborative engagement with another like-type, or uniquely different organization! Considering the partnership possibilities with another nonprofit could be a logical next step in the evolution of an organization, or may involve an innovative leap in a leader’s mindset. Resist the urge to get caught up in the definitions! This work is about identifying and leveraging an organization’s strategic value along with their capabilities as a single organization, or collectively with another organization, to effectively execute on their mission.

These four steps will help you examine if your organization is ripe for a merger, an acquisition, or what I will call a strategic alliance.

1. Identify the key value that your organization brings to the table – what you uniquely provide to clients or customers.
2. Analyze data to determine the impact of your organization’s work – the program, services, research, and the knowledge capacity you own.
3. Analyze your organization’s finances.
4. Identify and analyze your competitors – with any of those competitors can you increase the your organization’s potential value in the marketplace?

While following these steps can guide a nonprofit leader toward considering a strategic alliance, a leader shouldn’t stop here! The Nonprofit Leadership master’s/certificate program at University of Denver’s University College has partnered with the Colorado Nonprofit Association to provide a 1.5 hour webinar titled “What You Need to Know about Navigating Nonprofit Mergers, Partnerships and Acquisitions” on May 20, 2020 from 1-2:30 p.m. Mountain Time. Register: https://www.coloradononprofits.org/civicrm/event/info%3Fid%3D1309%26reset%3D1