While nonprofit and for-profit organizations differ in that nonprofits are mission-driven and for-profits are profit-driven, both seek to provide value to their constituents or customers, so it's critical to maximize efficiencies to increase capacity, value, and impact. Consolidation or mergers are an important way to maximize efficiencies —  an area where nonprofits could learn valuable lessons from for-profits.

Although mergers occasionally occur in the nonprofit space, particularly among larger organizations, the tendency is toward proliferation, which is almost always driven by the best of motives. Individuals personally affected by a disease or cause are moved to action and often set up a nonprofit to do work that is already being done by other organizations. This can dilute available resources, create inefficiencies, and confuse donors. Consolidation, by contrast, creates opportunities for existing nonprofits to expand mission and achieve results that simply aren't possible when resources are fragmented.

As CEO of the Parkinson's Foundation, I've seen what's possible through consolidation. The foundation was created in 2016 through the merger of two legacy organizations with similar missions but limited resources — the National Parkinson Foundation and the Parkinson's Disease Foundation — that recognized the opportunity to do more together than either could do alone. And five years later, that merger is an unqualified success. Each year following the merger, the foundation's revenue has increased by nearly 15 percent — additional resources that we've been able to dedicate to mission-focused programs. During our most recent fiscal year, we set a new high in fundraising mission spend, committing nearly 87 cents of every dollar to programs. This has enabled the foundation to expand existing programming and research funding and to broaden its thinking and launch new initiatives that would not have been possible by either organization alone.

Of course, there are issues that must be considered before embarking on a merger, but in our case, those issues were secondary to a larger question: Is the merger good for the Parkinson's community? When both organizations answered yes to that question, there was an obligation to move forward and work through any challenges. Here are some of the lessons we learned through the process:

  • Lean on your board.
  • Engage stakeholders. 
  • Establish a strong identity.
  • Prioritize the mission. 

Read the full article about nonprofit mergers by John L. Lehr at PhilanTopic.