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Nonprofits turn to mergers to cut costs

Saturday, November 27, 2010  
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By Alex Gary
Posted Nov 27, 2010 @ 09:13 PM

Nonprofits of all kinds are struggling to maintain services in the wake of the Great Recession, with corporate and private giving down, grants stalled or cut, and investment incomes falling.

It’s led to mergers between organizations.

"Organizations have been surviving by cutting staff, services, closing operations and expenses wherever possible,” said Jean Butzen, who runs the nonprofit consulting firm Mission Plus Strategy of Evanston.

Butzen believes by cutting staff and services rather than finding merger partners, nonprofits may be doing a disservice to the people they were created to help.

But Pam Clark Reidenbach, who heads Rockford College’s Center for Nonprofit Excellence, said merging just to cut costs doesn’t work. At least, not at first.

"It could take up to five to seven years before the efficiencies of a merger really show up,” Reidenbach said.

This story appeared at on November 27, 2010.

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