In today’s nonprofit boardroom, if there’s a chart on the wall it might show arrows pointing in two directions, both ominous.
A 2015 study by the National Council of Nonprofits found that the nonprofit mission in the U.S. faces a “resource squeeze.” It is harder to raise money and the needs these groups address are growing. The funding arrow points down, in other words, while the demand arrow angles up. Funding is tight in part because government allocations for human services care have been cut repeatedly. Nationally, private philanthropic giving is down. In Massachusetts, state budget problems have an immediate impact on local human service organizations. What’s a nonprofit CEO to do?
The National Council of Nonprofits recommends doing something quite like what two Valley agencies seek to pull off. The boards of Clinical & Support Options Inc. in Northampton and Friends of the Homeless Inc. in Springfield are asking the state attorney general’s office for permission to merge. As leaders of both organizations tell it, this combination would strengthen their ability to provide services – and that’s good news for Valley residents. To beat the “resource squeeze,” the council urges groups like CSO and the homeless program to find ways to become more resilient. That can mean changing their structures.
The council flagged these problems last year: When flat out trying to make budget and to render care to clients, nonprofits risk neglecting to groom talent. They miss out on emerging opportunities to deepen their missions. In short, if you keep your head in the sand as a nonprofit CEO, next year will be even more punishing. By joining forces, it appears that CSO and the homeless program – both heavy-hitters in the Valley’s nonprofit sphere – will in time be stronger, just as Cooley Dickinson Hospital has gained, on a different scale, from its merger with Massachusetts General Hospital.
CSO is the bigger of the two in this courtship. Its behavioral health services programs operate from 11 locations in western Massachusetts and care for 12,500 people a year. It employs 580 people from its Northampton HQ and operates on a $26 million budget.
Friends of the Homeless provides low-income residents of Springfield with emergency shelter, housing and other services. It runs on a $3 million budget and serves more than 1,000 people a year.
If the AG’s office checks off on this deal, the two would retain their identities and workforces, though senior management positions would be integrated in pursuit of better and less-costly ways to do business. Karin Jeffers, president and CEO of Clinical & Support Services, said the merger would create opportunities for career advancement within both agencies. She said the merger would also give her agency new tools to solve clients’ housing problems. On the flip side, the homeless program will be able to connect its clients with CSO’s behavioral health services.
Both agencies stand to strengthen their operations, and in today’s climate that’s essential.