10 questions about nonprofit M&A deals

January 5, 2015       The NonProfit Times      

The merging of two organizations, or the acquisition of one by another (which can be two sides of the same coin), calls for delicate negotiations. Those negotiations might be delicate, but they still involve tough questions.

During the 2014 Association for Healthcare Philanthropy (AHP) International Conference, Randy Varju, president of Advocate Health Foundation, and Mark Larkin, vice president for philanthropy of CentraCare Health, suggested some of the tough questions that must be faced and answered, clearly and definitively.

Those questions include consideration of constituents, support and staffing. Here’s a list.

  • What constituent groups are served by each of the merging organizations?
  • What has motivated them to become involved in the life of the merging organization?
  • To what degree do the constituents understand and accept the proposed merger?
  • Are the various constituent groups compatible?
  • What will need to be done to draw them together?
  • On what factors has each organization based its cause for support?
  • How will the centralized system establish its cause for support?
  • What are the strengths and weaknesses of the fundraising staff at each of the respective organizations?
  • What are the areas of overlap?
  • What changes will need to be made in staff duties and responsibilities?