Is a merger right for my board? A guide for not-for-profit boards considering mergers and other forms of collaborations

Everyone is talking about mergers …but is a merger right for my not-for-profit board?

If you have ever considered this question – your board is certainly not alone. Close to a third of Australia’s not-for-profit (NFP) Board Directors have discussed a merger as a potential form of collaboration at some point in the organisation’s history.

Why are boards turning to mergers?

Mergers may seem like an attractive solution to many boards facing increasing pressure to grow despite the challenges boards face today. Insights provided by the Australian Institute of Company Directors attributes this growing trend to:

• Increasing service delivery costs due to sector professionalisation
• Reducing Government budgets
• Perception that NFPs are inefficient
• Shift to market-based competition
• Greater client choice and purchasing power
• Increasing recognition of client need complexity

Is a merger right for my not-for-profit board?

Despite the many strategic paths Boards can take in navigating mergers and other forms of collaborations, the key is to determine which collaboration form will provide the most effective service to your targeted end-users at the lowest cost.

While mergers may work in certain circumstances, other forms of not-for-profit collaboration  may be more appropriate and should be considered. It’s more about finding the collaboration type(s) that will enable you to efficiently achieve your organisation’s mission.

About the Ebook

To address this need for Boards requiring guidance concerning executive decision-making, members of the Emerging Leaders in Governance program (ELGP) have created this eBook as a free resource guide to assist Boards in determining whether a merger or other forms of collaboration are the right fit for their organisation.

This resource presents and compares the key forms of collaboration, discusses both the advantages and disadvantages of different types of collaboration and provides lessons learned from organisations who have put various forms of collaboration into practice.

While this resource guide is intended to be a starting point, mergers and other forms of collaboration can be an attractive solution for non-for-profit boards considering ways to lower costs, but may not be appropriate in some scenarios. Additional information concerning each collaboration type is available through the ‘Available Frameworks’ links in each factsheet found here.