The Spring 2010 issue of the Stanford Social Innovation Reveiw hit my desk as I was leaving for a week away from the office. I grabbed it because a cover graphic advised that the issue included an article by David La Piana, Merging Wisely.

The article is available on the SSIR site (free, you don't need to be a member), and I recommend reading it because it offers a broader view of the issues around nonprofit mergers, or as La Piana Associations coined the phrase a decade ago, Strategic Restructuring. Strategic Restructuring includes a wide range of activities from joint programming to management consolidation to out and out merger.

One thought that gets to the core of the real issues around mergers and affiliations is this: "A better conceptualization of the problem is not the duplication of services, but the duplication of service provider infrastructure."

While merger is a hot topic now, due in large part to the crises facing many organizations in this tight economy, the real forces behind Strategic Restructuring were apparent in the 1990s. That's why several California-based foundations funded La Piana Associates to do a major study of options around nonprofit structures.

It's also why in the mid-1990s you had three seperate arts and science focused organizations in Redding, California joining togetehr to form the Turtle Bay Discovery Center. Even in the midst of economic growth in the 1990s these three organizations concluded that as seperate organizations they would never be able to thrive, but as one joint organization sharing infrastructure and facilities they could achieve their missions and thrive.

As a grant maker, and as a person who is often consulted on organizational development issues, there are two trends that are going to increasingly affect nonprofits, especially those with budgets in the range of $200,000 to $2 million.

First, it's getting more complicated to run such organizations. The demands of funders--whether the general public, grant makers, or contracting entities--are growing. So to are responsibilities to employees, especially around employment law.

Second, as baby-boomers begin to retire in greater numbers, the nonprofit sector will find it more difficult to find qualified staff who can deal with these increased responsibilities. This may sound unlikely in the current economy where every nonprofit job posting attracts hundreds of resumes from people who have never before considered nonprofit work. But assuming that an economic recovery does eventually come along, those resumes will no longer be so plentiful.

There is also the question of how nonprofits can afford the talent they need for critical tasks. One idea to keep in mind is that often a nonprofit needs the talents of the best people you can find; be that a CFO, a bookkeeper, or a grant writer. What we don't often ask is whether an organization truly needs that person 40 hours a week, 52 weeks a year. That is where job sharing or management consolidations really make sense, especially for smaller organizations.

Finally, the key point that you should take from David La Piana's article is that Strategic Restructuring is not free. There are costs. So the time to begin working on these ideas is before a crisis, while the organization still has the capacity--both time and resources--to carefully address the implications of restructuring.