Collaboration with external partners is often mentioned as a top priority to enable nonprofits to more effectively and efficiently advance their missions. Collaborations may take on many different forms: from informal understandings between organizations regarding the sharing of information to formalized affiliation agreements creating regional chapters, and from joint ventures between nonprofit and for-profit organizations to mergers between two or more nonprofits. Performing appropriate due diligence before entering into a collaborative relationship, providing for proper terms and conditions in a written agreement (to ensure compliance and risk management), and understanding the nature of the transaction and any potential alternatives are all critical to managing and governing in the best interests of an organization.
There are many ways in which two or more nonprofits can collaborate (see La Piana Consulting’s Collaborative Map), including (1) mergers and (2) dissolutions and asset transfers discussed in Part 1 of this series. This post specifically examines a merger between two California nonprofit corporations. Prior to moving forward...
On Tuesday, April 28, at 9 am PDT / 12 pm EDT, I’ll be on Facebook Live with Nadya K. Shmavonian (Partner, SeaChange Capital Partners.) and host Andy Davis (Associate Vice President of Member Education & Outreach, BoardSource) to discuss dissolution and mergers of nonprofits resulting the COVID-19 crisis. We’ll be...
Nonprofit corporations may decide to merge for many reasons, including to better advance a common purpose or to expand the range of services offered to common beneficiaries. Generally, in a simple 2-party merger between A (the surviving corporation) and B (the merging corporation also referred to in the law...
Lara Jakubowski, a Senior Consultant at La Piana Consulting, and I will be presenting a webinar on nonprofit mergers and acquisitions, discussing benefits, risks, and alternatives on February 25, 2020 at 10 am to 11:15 am PST for Clear Law Institute. You can register here. In this practical webinar,...
NEO Principal Erin Bradrick and Carrie Garber Siegrist of Faegre Baker Daniels LLP, Washington, D.C. are presenting a webcast for American Law Institute Continuing Legal Education on Maximizing Nonprofit Impact: Key Considerations in 501(c)(3) and 501(c)(4) Affiliations on Tuesday, March 26, at 9:30 – 11:00 am PT / 12:30...
Thanks to our friends at Perlman+Perlman for providing us with permission to re-publish this important post on private benefit issues raised by nonprofit/for-profit tandem structures by one of its partners, Allen Bromberger, whose bio we include at the end of the post. One of the basic principles of tax-exempt...
In a previous post (“Affiliated Organizations: Sharing Employees“), we examined how an affiliated 501(c)(3) organization and 501(c)(4) social welfare organization (or 501(c)(6) business league) can “share” employees. Such affiliations provide an ability to coordinate activities and share resources to more effectively and efficiently further a common goal. But, as...
It is becoming increasingly common to see 501(c)(3) organizations affiliated with 501(c)(4) social welfare organizations or 501(c)(6) business leagues. Such affiliations provide an ability to coordinate activities and share resources to further a common goal. But the affiliated organizations must maintain appropriate separation to mitigate against the risks of...
On May 16, 2017, the City of San Francisco and La Piana Consulting held a half-day learning session on strategic restructuring. Bob Harrington of La Piana Consulting discussed different tools and forms of strategic restructuring, and reviewed some of the pitfalls that can prevent nonprofits from moving forward toward success....
UPDATE (4/21/17): Read this article in The Nonprofit Quarterly about the 2017 Collaboration Prize winner AgeWell. Applications for the 2017 Collaboration Prize, a national competition that recognizes and celebrates nonprofit organizations that collaborate effectively to create greater impact, open on Monday, October 3, and close at the end of Wednesday,...