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| by Alexander Von Hoffman Senior Research Fellow |
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| Buffalo, New York |
Before going into details, it bears mention that it has become almost an axiom in the community development field that nonprofit organizations must "collaborate" if they are going to survive, much less transform low-income communities. And the idea of collaboration is appealing: two or more organizations agree to coordinate activities in a systematic way -- as opposed to carrying out a one-time joint venture. Such collaborations can range from a temporary partnership to outright mergers (or anything in between). But many practitioners and scholars believe such initiatives can address a host of serious problems. For most community development organizations, money is always short, and especially so in recent years as the federal government has reduced funding for the Community Development Block Grant (CDBG) program. In addition, many nonprofit groups appear to be financially weak, undersized, relatively unproductive, organizationally stagnant, or some combination of the above. By sharing business lines, programs, and administrative functions, smaller and financially weaker groups could become more efficient and possibly tap the resources and knowledge of stronger organizations. If so, they could stabilize their finances and begin to grow, which would allow them to devote more time and attention to serving their low- and moderate-income constituents effectively.
But as the new case study documents, putting these ideas into practice can be difficult. After extensive discussions, in 2012 the leaders of five western New York State groups devised the concept of a "collaborative merger." In this structure, each organization would become a subsidiary division of a new central organization. As subsidiaries, the five groups would maintain their separate identities, offices, and geographic service areas while increasing their capabilities and expanding the types and volume of business. The central organizations, which would be overseen by board members from each of the participating groups, would provide core administrative functions, and, in doing so, bring the efficiency and resources of a large organization to the work of what had been separate smaller groups.
Just as the groups were about to create the new entity, however, the alliance came to an abrupt halt. Many factors contributed to the breakdown of the process. The biggest obstacle was the difficulty of bringing five disparate groups together under a common structure. The organizations covered starkly different kinds of geographic territories. Three of the organizations (NeighborWorks® Rochester, West Side Neighborhood Housing Services (Buffalo), and Niagara Falls Neighborhood Housing Services) were rooted in cities. The other two (Arbor Housing and Development, and NeighborWorks® Home Resources) were rural entities with geographically extensive service areas.
Moreover, there were significant differences in the organizations' programmatic offerings. Arbor, the largest of the five groups not only provided residential services for people with special needs and victims of domestic violence, it also developed and managed low-income housing. The other four groups were traditional "neighborhood housing service" groups that emphasized homeownership counseling, lending, and community engagement. Over time, key staff and board members of the housing service organizations became increasingly concerned that if the alliance went forward, their organizations would lose their identities and be less able to perform their core functions. Ultimately, the concerns became so great that the groups' leaders decided not to proceed with the planned alliance.
That was not the end of the story, however. Following the original idea, albeit on a smaller scale, the three urban-oriented neighborhood housing service groups (NeighborWorks® Rochester, West Side Neighborhood Services, and Niagara Falls Neighborhood Housing Services) merged to form a new organization called NeighborWorks® Community Partners. Meanwhile, Arbor, which continued to be a NeighborWorks® member, has not only thrived, but has also expanded its service area as far as Pennsylvania and Albany, NY. The fifth organization, NeighborWorks® Home Resources, remained in business under the name Rural Revitalization Corporation, but has left the NeighborWorks® network.
The experiences of these five organizations not only underscores the importance of building trust among partners in any collaboration, it also offers several lessons for those interested in collaborating with other entities. First, prospective collaborators might do well to begin by collaborating on actual programs before they start building a grand organizational structure. Second, collaborators should take time to develop a common vision, which means wrestling honestly with with the differences that separate the participating groups. Third, and related to the above, communication - open and constant - is essential, as is the full and committed participation of all of the involved parties. The leaders of such efforts must go to great lengths to ensure that everyone - including staff and board members from all the organizations - understand and support the collaborative effort.
Finally, everyone must understand that bringing existing groups into a new organizational arrangement is not business as usual. It is an act of creation that will change the status quo. Such a collaboration requires extraordinary care to ensure that the participants recognize the process and the outcome as legitimate. And this in turn means it is essential to tackle difficult questions about management, sharing leadership, and the roles and responsibilities of staff and board members sooner rather than later.
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