There are 160,000 non-profits in Canada, of which 86,000 are registered charities. Non-profits and charities are trying to operate and deliver on their missions in an ever-changing, competitive and complicated environment. Structures established sometimes decades ago may not serve the organization well. Sometimes there are pressures from donors, funders or other stakeholders to have greater collaboration.
There are different options available to organizations that are interested in cooperating, coordinating, or collaborating with one another. Some options provide for greater autonomy while others lead to greater integration. Collaboration can be everything from informal networking to participation in membership organizations to the creation of umbrella groups or coalitions. It can mean even closer arrangements such as sharing premises and facilities by buying product or services together as well as joint ventures, joint research, joint training, joint programming, and joint fundraising. Then there is the most integrated form of cooperation which would be an amalgamation or merger.
The Chartered Professional Accountants of Canada (CPA Canada) have released a booklet entitled 20 Questions Directors of Not-for-Profit Organizations Should Ask about Mergers. It is co-authored by Mark Blumberg, a charity lawyer and partner at Blumberg Segal LLP. It provides an overview of some of the most important issues that non-profits and charities should consider when thinking about mergers or amalgamations. Also here is an article Mark Blumberg wrote in the Philanthropist entitled Mergers and Amalgamations in the Canadian Nonprofit and Charitable sector.
Quite frequently we are approached by charities or non-profits that wish to either partner/cooperate with other charities or non-profits or wish to merge or amalgamate some or all of their operations. A poorly planned or implemented process can be extremely costly to an organization. It is important that non-profits and charities obtain legal counsel early on in the process to avoid significant risks, mistakes, wasted time and distraction.
If your organization is interested in collaboration or merger you may want to contact us for assistance.