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We Welcome You to the:
Learning Session on Strategic Restructuring
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Learning Session on Strategic Restructuring
SAN FRANCISCO NONPROFIT IMPACT ACCELERATOR
NONPROFIT SUSTAINABILITY INITIATIVE
May 16th 2017
Bob Harrington, Partner
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“If you want to go fast, go aloneIf you want to go far, go together.”
- African Proverb
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Learning Session on Strategic Restructuring Page 4
The Multiplier Effect
Collaboration enhances the capacity of participating organizations
for mutual benefit and to achieve a common purpose.
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The Collaborative Map
Collaboration
Alliance
Strategic
Restructuring
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Collaboration
Collaboration
Coordinated Action
Joint Advocacy
Collaborative Learning
Network
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Alliance
Alliance
Administrative Consolidation
Fiscal Sponsorship
Joint Programming
Joint Earned Income Venture
Affinity Group
Coalition, Consortium, and
Association
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Strategic Restructuring
Strategic Restructuring
Joint Venture Corporations
(including MSOs)
Parent-Subsidiary Structure
Merger or Acquisition
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Case Study: Joint ProgrammingReady Set Parent!
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Case Study: Management Services OrganizationMACC CommonWealth
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Case Study: Administrative ConsolidationThe Chattanooga Museums
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Case Study: Joint ProgrammingDomestic Violence Programs and Federally Qualified Health Centers
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Success Factors
Mission focus
Flexibility in pursuing mission
Not in an immediate crisis
A lack of divisiveness
Clarity regarding desired outcomes
Positive relations with potential partners
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Roadblocks
Autonomy concerns
Lack of trust
Self-interest
Organizational culture
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The Strategic Restructuring Process
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Self-assessment
Motivators
Desired outcomes
Critical issues
Organizational factors or “red flags”
Financial assessment
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Partner Assessment
Level of trust
Past experiences
“Usable” skills and assets
Cautions and challenges
Mission and program compatibility
Financial condition
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Negotiation
IntegrationImplementation
Corporation A
Board of Directors
Decision
Corporation B
Board of Directors
Decision
Negotiations
Committee
Tasks:
Negotiation of Issues
Due Diligence Process
Corporation B
Board of Directors
Corporation A
Board of Directors
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Issues to be Negotiated in a Merger
Governance
Financial
Human resources
Capital
Programmatic
Communications
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Financial Impact and Analysis
Financial Comparison
Statement of Financial Position
Statement of Activities
Analysis of Financial Health
Human Resource Comparison
Budget Development
Projection for Combined Budget
Cost/savings Analysis
Donor Comparison
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Financial Due Diligence
Documents to review:
Organizational
Tax
Insurance
Personnel
Financial/Funding
Capital/Real Estate
Others?
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Legal Implementation
Vote by boards of directors
Finalize Agreement and Plan of Merger (or similar guiding plan)
File documents with government agencies
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Areas to be Integrated
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Cultural Integration
Be intentional about the process
Maintain two-way communication
Celebrate successes
Resolve disagreements immediately
Make communication/decision-making style explicit
Monitor internally and externally
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Integration Pitfalls
Mergers do not fail because organizational leaders can’t integrate their financial systems or IT…
Mergers can fail because people tend to hold onto their individual cultures and identity rather than
create a new organization.
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Lessons Learned
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Be Prepared
The process will take time
People may leave
There are both costs and benefits (intermediate and long-term)
Reach out to donors, supporters, membership early on
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Success Factors
A champion
Shared mission
Positive experiences with collaboration
Board support/encouragement
A risk-taking/growth orientation
Positive board-executive relations
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Build Change Management into Culture
Change is hard
Change creates both excitement and anxiety
Talk openly about the needed changes
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Managing a Strategic Restructuring
Relationships
Trust
Mutual Respect
Shared Purpose
Working Relationship
Skills Match
Process
External Assessment
Self-Assessment
Partner Assessment
Negotiations
Implementation
Results
Mission Enhancing
Program
Strengthening
Legally Sound
Financially Viable
Publicly Supportable
Relationships
ResultsProcess
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Questions and Comments
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Panelists
Joelle Gomez, former CEO
Women’s Center,
Youth and Family Services
Dori Rose Inda, CEO
Salud Para La Gente,
Watsonville Law Center
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Brett Andrews, CEO
Positive Resource Center,
AIDS Emergency Fund,
Baker Places
Sharon Miller, CEO
Renaissance
Entrepreneurship Center
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Panelists
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Questions and Comments
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Impact Accelerator Timeline and Process (subject to change)
Date Task & ProcessTime
Commitment
May 15 and 16 Learning sessions
May 24 Distribute Strategic Restructuring Assessment Tool (SRAT) application link
and Phase 2 information
June 16 Deadline for nonprofits to determine whether they want to apply for the
SRAT process and submit application
20-30 minutes to
complete application
July 7 Final decisions and notification on SRAT participation
July 7 –
September 8
Distribute and allow organizations time to complete the SRAT. 3-5 Board
Members and senior staff leadership (CEO/ED, CFO/Financial Manager,
Senior Program Staff, Senior Development Staff) take the SRAT together.
One person fill’s out SRAT responses on the computer during the session.
~2 hours
September 8 Deadline to complete the SRAT
August –
November
La Piana consultant meets with each organization to debrief SRAT process,
discuss critical issues related to a potential partnership, and determine next
steps. Participants should include as many of the individuals as possible
who participated in taking the SRAT.
2-3 hours
Mid-September,
ongoing
Partnership exploration and negotiations TBD based on
partnership