Talk of mergers, acquisitions more common among cash-strapped Calgary non-profits
Organizations are confronting the reality of the pandemic and economic downturn
Mergers and acquisitions are terms typically reserved for big business deals, but lately they've been popping up in conversations within Calgary's non-profit sector as it looks for ways to adapt to current economic challenges.
This summer, Aspen Family and Community Network merged with the Boys and Girls Clubs of Calgary.
Jeff Dyer, the CEO of the new organization who previously headed the Boys and Girls Club, says the idea was born out of necessity.
"We took a serious look at the Alberta economy and knew that it was going to put major pressure on our core funders and our donors, and so we either needed to prepare for major cuts or dream big and merge," said Dyer.
While the deal is the largest merger of non-profits in western Canada, there are smaller partnerships and potential mergers and acquisitions percolating, according to the Calgary Chamber of Volunteer Organizations.
"The question that non-profits are asking each other and that funders are asking of them is: is there a duplication of services? Is there a better way to provide services for the people that we serve? How are we going to do that? So we are seeing some interesting innovations come out of those kinds of questions," said Karen Ball, interim CEO of the chamber.
Whether it's a merger, acquisition, or new partnerships on service delivery, Ball says it's a good time to explore these ideas.
She says although the chamber has not gathered Alberta data, national data indicates one-in-five non-profits are at risk of closing their doors due to the impacts of the pandemic.
"We are, as a sector, now heading into an environment where we are going to be having to examine this more closely and look at what it means," said Ball.
Dyer says in the case of the merger between Aspen and the Boys and Girls Club, each group realized they were often serving the same families in different ways.
He says a lot of times, if the Boys and Girls Club was working with elementary or junior high students, Aspen was working with their parents.
Dyer says joining forces meant they could save money by eliminating redundancies and then put that money into frontline services.
"You don't need two offices, two finance departments, two of anything, really," said Dyer.
In the case of the Boys and Girls Clubs merger, the CEO of Aspen Family and Community network retired, leaving Dyer at the helm of the newly formed organization.
Still, Dyer says it's not an easy transition for either organization — especially in a sector unfamiliar with coming together.
"Merging is hard. There's a lot of egos involved. It takes a lot of work. Most not-for-profit leaders are just worried about the people they serve. And they don't have a ton of time to be thinking about transformational business change, which ultimately is what a merger is."
The head of Leftovers Foundation, which distributes food from restaurants, stores and bakeries to different service agencies, says COVID quickly forced her to reach out to other agencies to find ways to help their clients.
"We were talking every day with each other to try to facilitate these large donations so that nothing went to waste," said Lourdes Juan.
She says it's the first time in eight years she's had brainstorming meetings with other food serving agencies and those who serve Calgary's vulnerable population.
She also ended up sharing warehouse space with another group.
Now she says she'd be open to merging with another non-profit if they were aligned with her organization's values and mission.
"If we can have more impact working together than we can in silos, which we are now realizing, it's just going to be better off for the community at the end of the day," said Juan.
Dyer says in his case the merger is already proving successful.
"The big difference is that those services haven't gone away. We would have had to cut frontline services in our community just to continue to operate, and we haven't had to do anything. In fact, we've grown. So that's the real testament. "
Ball says mergers require time, expertise and money, and they are not always successful, so she advises non-profits to be clear on their motive to ensure a high level of success.
"When you're asking the question, is this going to save our organization, then that might not be the right space to explore a merger," said Ball.
She says it should be about whether a merger would be the best way to serve the targeted community.
Ball says there are other ways an organization can ensure survival at this time, whether it be through a partnership in service delivery or by focusing on priority services and letting other things go.
Alberta currently has about 26,000 nonprofit groups, including charities, which employ about 450,000 people, including full time and part time workers.