SOURCE: Marks Paneth LLP

Marks Paneth LLP

June 02, 2015 10:30 ET

Nonprofit Mergers Are Coming -- a Trend That Will Intensify, Say Organization Leaders

Nonprofit Execs Not Confident Mergers Will Strengthen Missions and Impact, According to National Nonprofit Survey by Marks Paneth

NEW YORK, NY--(Marketwired - Jun 2, 2015) - A quarter of nonprofit leaders say their organizations have either merged or considered merging over the past three years. And nearly a third expect notable merger activity in their sectors over the next five years.

That's according to the findings of Nonprofit Pulse, a new national survey of nonprofit leaders by accounting firm Marks Paneth. Survey respondents included over 100 Board Chairs, Presidents, Executive Directors, Chief Executive Officers, Chief Financial Officers, Treasurers, Chief Operating Officers, Development Directors, Vice Presidents and Board members of nonprofits with annual budgets between $10 million and $100 million.

Leaders whose organizations did merge over the last three years said the impetus was "increasing the ability to serve their constituents" and "combating financial difficulties." Nonprofits that considered merging but didn't say the key reason for pulling back was mismatch of mission and values.

Despite the apparent inevitability of nonprofit mergers, leaders are wary about what the trend will mean for organizations' work and impact. More than a fifth -- 21% -- of nonprofit leaders say mergers in their sector will weaken, rather than strengthen, organizations' missions and effectiveness. And 34% say they're not sure whether mergers will weaken or strengthen organizations. (Forty-five percent think mergers will have a strengthening effect on missions and effectiveness.)

"Mergers in the nonprofit healthcare field have become commonplace. We see that as a precursor to a growing number of mergers in other nonprofit sectors. Mergers are a reality in a fast-changing, increasingly complex economic and social environment. We urge nonprofit leadership to put the potentiality of mergers in the mix as they proceed with financial and strategic plans," says Michael McNee, CPA, Partner-in-Charge of the Nonprofit and Government Services Group at Marks Paneth.

When asked to list the potential advantages to mergers, nonprofit leaders name "shared finances" (58%); combined "social/political capitals" (57%), and "combined membership based" (51%). They say the biggest drawbacks involve the unwieldiness of combining two organizations: 29% say "staff size" is a drawback, and 31% say "board expansion" is a drawback.

To receive a copy of the Nonprofit Pulse and/or to speak with a leader from Marks Paneth's Nonprofit and Government Services Group, please contact Katarina Wenk-Bodenmiller of Sommerfield Communications at (212) 255-8386 or katarina@sommerfield.com.

Methodology

The Nonprofit Pulse: A Leadership Study from Marks Paneth represents the findings of a survey of nonprofit leaders in the United States. The 103 professionals participating in the research include Board Chairs, Presidents, Executive Directors, Chief Executive Officers, Chief Financial Officers, Treasurers, Chief Operating Officers, Development Directors, Vice Presidents and Board members and are with organizations with annual budgets between $10 million and $100 million. The research employed self-administered questionnaires completed online by respondents. The national list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of November 12 to December 31, 2014.

About Marks Paneth LLP

Marks Paneth LLP is an accounting firm with more than 550 people, including over 70 partners and principals. The firm provides public and private businesses with a full range of auditing, accounting, tax, consulting, trade remediation and valuation services as well as litigation and corporate financial advisory services to domestic and international clients. The firm also specializes in providing tax advisory and consulting for high-net-worth individuals and their families, as well as a wide range of services for international, real estate, media, entertainment, nonprofit and medical practice clients. The firm has a strong track record supporting emerging growth companies, entrepreneurs, business owners and investors as they navigate the business life cycle.

The firm's subsidiary, Tailored Technologies, LLC, provides information technology consulting services. In addition, its membership in Morison International, a leading international association for independent business advisers, financial consulting and accounting firms, facilitates service delivery to clients throughout the United States and around the world. Marks Paneth, whose origins date back to 1907, is the 35th largest accounting firm in the nation and the 9th largest in the mid-Atlantic region. In addition, readers of the New York Law Journal rank Marks Paneth as one of the area's top three forensic accounting firms for the fifth year in a row.

Its headquarters are in New York City. Additional offices are in Washington, DC, New Jersey, Long Island, Westchester and the Cayman Islands. For more information, please visit www.markspaneth.com.

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