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About The Patterson Foundation

• The Patterson Foundation believes new realities can emerge when entities collaborate in innovative ways

• By working together and sharing the value of what we learn, entities create a synergy that benefits all involved, including the wider community

TPF looks beyond what is….

to what could be

through strategic focus

Today’s Goals

Big Trends Spiraling Up

Collaboration Models Stiring the Juice!

“Is there a different model for what we do?”

Neal Gittleman, Artistic Director Dayton Philharmonic Orchestra

“We thought we needed to look at

something bigger to turn things

around and have a real possibility for

an upside, rather than just trying to

keep the downside at bay,” he recalls.

State of the Sector Survey* Results 2011 v. 2012

2011 2012 Expect more demand for services 85% 88% Have cash to cover only up to 3 months 60% 57% of operations Expect 2012 to be financially harder 41% 41% than 2011 * Over 4000 responses

Trends for the Next Ten Years (aka The New Normal)

# of Nonprofits Tax Base Community Need Giving (Funders/Donors)

As competition for donors, board members and staff talent has increased, nonprofits have become more competitive and less collaborative. It’s about mission- impact and optimization.

The New Normal

• How do we leverage our current resources to provide more and better services?

• How do we do more with the same or less?

A conversation about Spiraling Up

Understanding What the Terms

Mean

The Collaboration Prize

The Lodestar Foundation

Database housed at the Foundation Center

Collaboration Prize Numbers

2009: 644 submittals 2011: 809 submittals

About 650 -- “best of the best”

are in the database

Collaboration

Partnerships

Parent-Subsidy Jt. Programming

M & A

Back Office Consolidation

Joint Venture

Shared Services

ASO & MSO

Strategic Alliance Affiliations

Integration

Greater Autonomy Greater Integration

Pro

gra

m

Ad

min

istr

ati

on

Administrative Consolidation

Joint Programming

Single focus or program

Multi-focus or program

Integrated system

Contracting for services

Exchanging services

Sharing services

Information sharing

Program coordination

Joint planning

Collaboration

Management Services

Organization

Parent/Subsidiary

Corporation

Corporate Merger/

Acquisition

Joint Venture

Corporation

The Partnership Matrix

Collaboration

Change in Corporate Structure

Collaboration Strategic Alliance Corporate Integration

Strategic Restructuring

Contract or MOU

No permanent organizational commitment

Decision-making power remains w/

individual organizations

Involves a commitment for the future

Decision-making power is shared or transferred

Is agreement-driven

Involves changes to corporate control

and/or structure, including creation and/or

dissolution of one or more organizations

TPF Space

What is Strategic Restructuring?

Collaborative strategies that use partnerships

to enhance mission attainment

Sharing resources and decision making

for greater impact

Test!

How much do you know about nonprofit

partnerships?

True or False?

Partnership strategies should only be

considered during tough economic times.

Top 5 goals sought through collaboration…..

1. Expand reach, range of services and programs

2. Improve quality of services and programs 3. Address unmet or escalating community

needs 4. Maximize financial resources 5. Serve more and/or different audiences

Top 5 circumstances prompting collaboration….. 1. Advance a shared goal 2. Respond to community needs 3. Initiated or mandated by funder(s) 4. Competition for funding or clients 5. Respond to a funding opportunity

The answer? Strategic partnerships require careful assessment and thoughtful decision-making. “Wise organizations choose strategic restructuring to further their missions.”

True or False?

It’s all about mergers.

0%

10%

20%

30%

40%

50%

60%

70%

80%

JointProgramming

AdministrativeConsolidation

Merger Confederation

Strategic Collaborations are as custom as the First Lady’s boots!

True or False?

Even if a merger makes sense, we’ll lose our

identity and the value of our brand

Structures can be tailored to meet specific needs: • Single entity with “A program of” • Parent subsidiary relationship • Umbrella corporate structure using

d/b/a

Oakland East Bay Symphony, Oakland Symphony Chorus, and

Oakland Youth Orchestra

Merger

La Piana Consulting © 2009

THE INSTITUTE FOR ENTREPRENEURIAL

EXCELLENCE’S Center for Women in

Business

Foundation Center & Issue Lab in the knowledge curating space merged in 2012 “We are now part of a whole ecosystem of knowledge” Gabriela Fritz, IssueLab Co-Founder

True or False?

It is just like M&A in the corporate world

Process is the key

Begin by exploring

• Private sector mergers are about stakeholder equity.

• Nonprofit mergers are

about mission.

True or False?

These strategies don’t work in my field

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Human Services

Education

Mental Health

Health

Other

Community Development

Technology

Public Affairs

Volunterism

Philanthropy

Religion

Housing

Arts and Culture

Environment

Civil Rights

Animal Protection and Welfare

Now, buckle up!

Domestic Violence

• Blue Shield of California Foundation funding groundbreaking work Trigger? Leadership challenges

• Starting simple--4 DV groups coming

together around common elements Consignment shops

When Eden looked for a partner to acquire their Florida operations, Easter Seals was a natural fit. Debra Lynn, VP Programs, Easter Seals Florida Eden Autism and Easter Seals Florida

Animal Welfare

• Funder Collaborative

• $2+M investment

Indianapolis Animal Welfare Alliance

Capacity building • Additional funds for cat spay/neuter • Merger of two organizations • Two year support for a new program

to place 120 senior/special needs shelter dogs in homes. Funding will focus on medical issues

• Funding for medical, food, shelter supplies, outreach, education for a feral sanctuary

Coming together for common good

Animal Protective Foundation, New York

Austin ASPCA Partnership

The Oregon Hay Bank

Habitat for Humanity Charlotte Region Catalyst Project

Management Services Organization/Joint Venture

La Piana Consulting © 2011

Working collaboratively for about a year

Joyous Noise! Drywall & concrete pricing Charlotte, Desoto, Manatee & Sarasota (2) affiliates

The Power of Five

Collaborative Fundraising

Three Stories

Orlando Ballet, Orlando Philharmonic Orchestra, and

The Orlando Opera Company

Case Study: Grande Masque New Year’s Eve Gala

La Piana Consulting © 2010

Consolidated or Shared Services

PEO: Four human services organizations about to issue an RFP

Chattanooga Museums

Administrative Consolidation

La Piana Consulting © 2011

The Children and Family Services Center

MSO for Shared Space and Administrative Services

La Piana Consulting © 2011

YMCA of St. Petersburg and YMCA of the Suncoast

Administrative Consolidation

La Piana Consulting © 2011

ARCH: Alliance for Rural Community Health

Joint Venture Corporation

Reasons to Consider…

Economics Opportunities Leadership challenges A tired board To better serve the community Reasons specific to each nonprofit

Key Success Factors Trust

Joint Decision-Making Start with Simple Collaborations

Shared Culture Board Engagement

Good Facilitation and Process Sustainable Structure

Leadership

Why Partnerships Fail Partnerships do not fail because organizational leaders can’t integrate financial systems or IT…. Partnerships fail because people tend to hold on to their individual cultures and fail to create a new culture…

Understanding Trust

Reliability

Openness

Integrity

Competence Benevolence

Don’t be overly

concerned about

losing decision-

making autonomy.

Successful

nonprofit

collaborations are

driven by mission

attainment not

financial crisis.

What did you learn?

Do you feel inspired?

Are you ready to Spiral Up?

Thank you! (Resource Guide follows this slide)

Pam Truitt

ptruitt@thepattersonfoundation.org

Patterson Fdn CRI

Collaborative/Strategic Restructuring Resources

The Collaboration Prize Database http://foundationcenter.org/gainknowledge/collaboration/ La Piana Consulting www.lapiana.org The Patterson Foundation Blog www.thepattersonfoundation.org TPF Habitat Blogs http://www.thepattersonfoundation.org/blog/habitat-for-humanity-affiliates-explore-ways-to-collaborate/ http://www.thepattersonfoundation.org/blog/charlotte-area-habitat-for-humanity-affiliates-collaborate/

Nonprofit Finance Fund State of the Sector http://survey.nonprofitfinancefund.org/#respondents,demand,actions,gov,engagement,finhealth Domestic Violence Blue Shield of California Foundation http://blueshieldcafoundation.org/programs/program-area/blue-shield-against-violence http://lapiana.org/research-publications/publications/articles/partnerships-in-the-domestic-violence-field http://strongfieldproject.org/resources/power-partnerships-executive-summary-2012 Domestic Violence and Child Advocacy Center, Cleveland http://dvcac.org/ Animal Welfare Indianapolis https://indyhumane.org/index.php/news/special_announcement Animal Protective Foundation www.animalprotective.org Austin ASPCA Partnership www.aspca.org/adoption/aspca-partnership/austin/ The Oregon Hay Bank www.oregonhaybank.org/ Performing Arts Organizations http://www.thepattersonfoundation.org/blog/the-m-word-an-open-discussion-with-donors/ Dayton Performing Arts Alliance http://www.thepattersonfoundation.org/blog/this-merger-makes-sense-part-1/ http://www.thepattersonfoundation.org/blog/this-merger-makes-sense-part-ii/ http://www.thepattersonfoundation.org/blog/an-update-on-the-dayton-performing-arts-alliance-merger/

Levels of Administrative Functions

• Transactional

• Baseline transactions • Payroll, accounting, benefits administrator, IT operations

• Managerial • Mission-based management, planning and sustainability

• Budgeting, financial analysis, employee trainings, employee recruitment, IT/systems planning

• Strategic • Future planning and strategy creation to lead, innovate and change

• Financial marketing, strategic planning

Examples of Administrative Collaboration and Consolidation

Option Human Resources Information Technology Finance Other

Collaboration Sharing policies, procedures, best practices

Cross-training (e.g. spending time in each other’s office[s])

Shared recruiting, training

Sharing policies, procedures, best practices

Coordinated IT analysis and assessment

Joint training of staff on new software

Sharing policies, procedures, best practices

Joint finance training for staff and board

Sharing governance models

Coordinated long-range planning

Consolidation Mentoring

Standardized HR practices, training

Development of a common recruiting pool

Shared HR professional

Shared database and server

Shared IT professional and other key staff

One organization provides IT services for another

Shared accounting systems

Shared CFO, key staff

One organization provides accounting services for another

Advocacy training for boards

Joint marketing/ branding

Bulk purchasing, translation services

Creating an MSO

Shared employment

Co-employment

Single benefits program

Benefits administration

Intranet

Common Help Desk

Shared accounting software

Centralized servers

Centralized finance staff and systems – report generation, cash management, billing

Centralized facilities management

Coordinated grants management and reporting