Tech Impact signed a definitive agreement and plan of merger, which is expected to become effective on or about July 1, subject to “the satisfaction of customary closing conditions.”
501cTECH President & CEO Julie Chapman will become executive director of Tech Impact’s Washington, D.C., office and operations. Tech Impact Executive Director Patrick Callihan will serve as CEO of the combined organization.
The two organizations have worked together for more than a dozen years and were original members of the NPower Network, which was created by Microsoft to deliver affordable and sustainable solutions for community-based nonprofits. Merger talks officially started about six months ago, according to Callihan. The merged organization will be known as Tech Impact and will maintain all current offices. Tech Impact was founded in 2003 in Philadelphia and also has offices in Wilmington, Del., and Las Vegas, Nev.
Tech Impact’s services for nonprofits include help desk/managed IT, Office 365 for Nonprofits, VoIP phone service, data management and analytics, cloud computing migration on various platforms, and social media and digital marketing consulting. Tech Impact’s direct service programs focus on workforce development, helping disconnected youth begin careers in technology.
Back-office consolidation will include things like accounting systems, sales processes, and account management. Whether that will impact staff is not known at this point with a lot of work to do before the merger takes effect July 1. Callihan anticipates the headcount eventually will be more than 50. Currently, Tech Impact has about 37 employees and 501cTECH has about 15.
“I think we’re really just beginning here. Three years ago when we decided to go national, we’ve seen tremendous growth. Adding D.C. to the mix obviously accelerates that in a big way,” Callihan said. “It also opens a lot of doors. There’s just so many organizations that can use this capacity and this help, there’s quite a bit of opportunity,” he said.
The two organizations had combined total revenue of more than $6 million last year. 501cTECH had revenue of about $1.8 million and Tech Impact was close to $4.4 million last year, according to Callihan. That’s up from about $2 million in 2014.
Two 501cTECH board members will join Tech Impact’s 14-member board with the remaining 13 members becoming an advisory board for the Washington, D.C., region, according to Callihan. Tech Impact board chairman Paul Jaskot, a partner at Reed Smith LLP, will serve as chairman of the board of the combined organization.
“This collaboration is good for our business and good for the sector,” Callihan said. “By merging with 501cTECH, we will be able to serve more nonprofits with critical technology support they need to do what they do best. It also creates more opportunities to expand our workforce development programs, which enable individuals to reach their full economic potential,” he said.
“This merger really makes sense for both organizations,” Chapman said. “We have the same mission and vision, and very similar cultures. Together, we will have increased leverage in the market and be able to continue developing innovative services at a scale we could not have delivered on as individual organizations,” she said.
501cTECH is the former NPower Greater DC and Technology Works for Good, founded in 1999. Tech Impact used to be NPower Pennsylvania and Delaware. In 2011, NPower, the national network of nonprofit technology consulting and training organizations, restructured with the New York office rebranding as the national organization. Other network members at that point had to decide whether to retain the affiliate or become independent.
“We provided seed funding for Tech Impact and 501cTech over a decade ago, bringing much needed technology capacity to the nonprofit sector,” Director of Microsoft Philanthropies Jane Meseck said via a press release announcing the merger. “The combining of these organizations will not only bring efficiency to their own operations but will provide greater scale to the nonprofit sector in the form of technology services and support needed to increase the effectiveness of thousands of organizations serving those who most need the benefits of technology,” she said.