Ken Goldstein, MPPA

Ken Goldstein has been working in nonprofits and local government agencies from Santa Cruz, to Sacramento, and back to Silicon Valley, since 1989. He's been staff, volunteer, board member, executive director, and, since 2003, a consultant to local nonprofit organizations. For more on Ken's background, click here. If you are interested in retaining Ken's services, you may contact him at ken at

Thursday, February 18, 2010

Don't Blame Haiti

I was reading an article a few days ago about an issue campaign that had been canceled and was struck by the sentence, "They blamed the tough economy and people focusing charitable efforts on Haiti for the lack of donations to their effort."

Everybody knows the economy is tough, and that many donors have had to reduce their giving. It is also true that some donors have had to chose whether to give their recent gifts to "their usual causes" or to the emergency in Haiti. But it's equally true that there are some organizations that have increased their individual giving in the past year, and even in recent months.

So why have some nonprofits flourished while others have floundered? It's all in the message. Those who have increased donations haven't avoided mentioning the tough economy, but they haven't focused on it either. They've given concrete examples of specific cuts, and then demonstrated their strengths and ability to operate, despite challenges. These are the messages that have instilled donor confidence, and encouraged increased giving.

The last message any donor wants to hear is that you've lost all hope. And they certainly don't want to hear you blaming others for your problems.

The organization in the article may indeed have had some donors reduce their pledges following the Haiti earthquake (and they were certainly aware of the economic situation before they launched their campaign). But more importantly, they failed to make a strong case for their own cause. They failed to demonstrate their ability to follow-through and achieve their mission and they failed to create an urgency around the timing of their own campaign.

Haiti and a down economy may not have helped their situation, but they certainly managed to fail on their own. Not accepting responsibility, and blaming other worthy causes, shows a lack of leadership that donors will not forget should this organization try their campaign again in the future.

End of that rant... Here's one more note about mergers...

I just read a wonderful account of a nonprofit merger in the Guardian (UK) called Braving the new world of a merged charity, the article begins:
For the past year, I have been going through what I imagine a divorce feels like: uncertainty, sleepless nights, and the occasional desire to bawl. But in fact I have been preparing for a marriage of sorts: the merger of the national organisation I founded, Speaking Up, with another charity, Advocacy Partners.
Being chest deep into my third merger, I know exactly how he feels. Read the full article for some excellent merger advice.

Friday, February 12, 2010

Latest Projects & More on Mergers

It's hard to believe that I've not posted here since December! In that time I've been hard at work in yet another Interim Executive Director (IED) position, as well as working with a local educational foundation on their strategic planning process, and teaching a grant writing workshop at a community foundation. It's been a busy several months, to say the least.

In the IED position, we are close to completing a merger agreement that will take this 30-year-old social service agency (about $1.7M budget, 20 employees) and transform it into a division of a larger ($7M budget, 100 employees) multi-service organization that's been in the community for over 100 years. It's an exciting proposition, and will hopefully give our agency the administrative capacity to expand its programs over the next several years, as well as round out the services of the  new, larger agency. But that doesn't mean it's easy.

Although this is my third time going through merger negotiations as an IED, I'm not one who is a default cheerleader for mergers, or who would ever say anything like, "There's too many nonprofits." On the contrary, I love having a vital marketplace of nonprofits, large and small, competing to make our communities better places to live.

When it makes sense to merge, I'm on board to help. But in tough economic times like these, many smaller organizations are under pressure to merge, whether it makes sense or not.

Last June, Emmett Carson, CEO of the Silicon Valley Community Foundation, had a guest editorial in the San Francisco Chronicle in which he wrote,
Mergers are not for the faint-hearted and, contrary to popular thinking, merging two weak organizations does not result in a stronger organization but rather a weaker one.

Mergers are expensive and disruptive. It takes money to consider how to integrate services, staff and systems, and time to think through the merits of such a strategy. Unfortunately, both are in short supply.

Even more challenging is the fact that merging organizational cultures is a delicate, complicated exercise under ideal conditions, and even harder when leaders are faced with the urgency of responding to burgeoning community needs.

Mergers require enormous amounts of energy from the boards and senior management of both organizations, which can distract them from focusing on their core work.
The alternative is to let the marketplace work. As financially strapped nonprofit organizations are no longer able to sustain their operations, they will cease to exist and those that are stronger can expand to serve other areas and constituencies. ...
While I may have put it in slightly less Darwinian terms as that, Dr. Carson is absolutely right. In some cases, it may be better to allow certain agencies to die rather than expend scant resources in trying to move them under another organization's roof. If the mission is vital to the community, somebody else will pick it up, if there aren't seven other organizations already working on that issue.

As we come close to completing our current merger, and I think about having been a part of this three times, I have another caution that I'd add to Dr. Carson's list: What will you do if you spend months negotiating a merger, and it doesn't happen?

It's looking very much like this current merger will go through. But there are still a million things that could prevent it from being finalized. In my first merger, things sailed right through. In my second merger, talks went on for 10 months, and then, when we thought we had a final legal agreement, it all fell apart, literally overnight. The agency had gone a full year without a permanent ED, we'd spent time, money, and energy pursuing a path that didn't pan out, and now we had to rebuild. We did, but that lost year will haunt them for some time to come.

The reality is, of those nonprofits that begin merger discussions, only 30% result in successful mergers. If/When my current project ends in success, I will officially be beating the odds. I'm sure we can do it. But caution is advised.