Introduction to Nonprofit Strategic RestructuringA Three-Part Webinar SeriesPART II

Mary Anderson, Senior Managing Consultant M+S Consulting

Last Session We Discussed…

• The definition of restructuring & its key drivers (economic forces, pressure to raise unrestricted funding, etc.)

• The range of nonprofit collaboration models (strategic restructuring spectrum)

• The benefits of restructuring (improving market position, increasing service offerings, etc.)

• The types of structures (joint ventures, MSOs, shared service alliances, parent/subsidiary, mergers)

• The downsides/difficulties of each

Review a Potential Strategic Re-structuring Strategy

Phase 1: Identify a Strategy

1. Create a Strategy Committee2. Review your strengths, weaknesses,

opportunities, and threats3. Review all possible strategies to address your

weaknesses and threats, including strategic re-structuring strategies

4. Determine which strategies best leverage your strengths and opportunities

What is Motivating you to Collaborate?

• What does your SWOT tell you?

• Do you need to improve finances?

• Do you need to gain access to a larger skill set?

• Do you need to expand your programs?

• What would you gain from a SR collaboration?

Identify Your Goals for a SR Strategy

• Based on your SWOT analysis, determine your organizational goals

• These goals will clarify your strategic restructuring strategy

• Write down your goals with clear metrics

General Motivations for SR Collaborations

• Better market positioning

• Larger market share

• Higher public profile

• Greater political influence

• More strategic fundraising

• Larger staff, greater specialization of functions and provision of more services

• Creation of a continuum of services that is coordinated

• Better economies of scale

Select Partner Criteria

• Identify the criteria for a potential partner to help you achieve the goals

• The goals should be the driver in terms of establishing the partner selection criteria

• Draft the partner criteria and vet the criteria until you are satisfied with the final list

• Identify the criteria which describes your own agency’s strengths

• Be sure to include trust of the partner, and mission alignment

Brainstorm Potential Partners

• Using the criteria, identify all the nonprofit agencies which you believe meet, or nearly meet, your criteria

• Discuss each one and rank them in terms of your criteria, from your first to your last choice

• Do additional research quietly on the list, if need be, to resolve questions

• Identify your first, second, and third choices to approach for a discussion on potentially collaborating

How to Approach a Potential Partner:

Possible opening lines: “I’d like to talk about the future of our two organizations.” “Would you be interested in going out for coffee to talk

about the potential of our organizations working more closely together?”

“I’ve been thinking about the future of our organization and I feel like I need to collaborate more seriously. Would you like to have coffee to talk about it?”

Phase 2: Creating a Partnership Committee

1. Create a Partnership committee to design a process for approaching and selecting a prospective partner(s) for the strategy

2. Select the goals to be achieved3. Select the criteria for the prospects4. Identify your prospects5. Set up meetings with your prospects6. Meet as many times as needed

Phase 2, continued…

7. Report back to the Partnership committee on the results of your initial meetings

8. Narrow your list further according the results of your meetings

9. Discuss the findings – do you need more meetings? If so, continue meeting with your top prospects

10. Keep reporting to your Partnership Committee on the results of conversations

11. When you and your potential partner are ready to proceed, then report to your Board of Directors

Phase 3: Negotiating a Letter of Intent

• Negotiations Parameters

• Process to be followed

• Participants and roles

• Timeframe

Letter of Confidentiality

• Specifies how documents will be handled

• Should be approved by each Board

• Signed by the Board Chair

Questions?

Mary Anderson

mary@missionplusstrategy.com

Coming Up:

-Negotiating and Implementing a Merger or Collaboration Agreement

- Memorandum of Understanding

Part III: October 9, Noon, CST