Skip to main content

Have you been wondering if a nonprofit merger could be an option for your organization? It’s one of the most significant decisions you can make about your future, with a lot of advantages and pitfalls to consider. See how nonprofit accounting services can help you to assess your situation and implement your decision effectively.

Nonprofit Accounting Services for Nonprofits Considering Mergers

Nonprofit Accounting Issues Related to Mergers:

A nonprofit merger usually involves one organization dissolving and transferring its assets to another nonprofit. If that sounds like it would be complicated, it is. However, it may be worthwhile if it allows you to improve your services, and use your resources more efficiently. In other cases, it may seem like the only option for rescuing a nonprofit that will otherwise have to close its doors. At a minimum, both organizations need to have an accurate picture of each other’s assets and liabilities, as well as their funding and revenue sources. There are also many legal and compliance matters involved, including protecting and preserving your IRS nonprofit status. Finally, keep in mind that mergers usually require money to execute, and they are not a quick fix, often taking a year or more to implement.

Other Issues Related to Nonprofit Mergers:

The most fundamental issue is whether the nonprofits involved are a good fit. Will you really be able to generate the synergies that will allow you to upscale and thrive? Even if you’re successful, you should be prepared for culture conflicts as you deal with different management styles and new roles. Keep in mind that mergers may not be the only approach you have available. You may want to investigate strategic alliances and other such arrangements. They can be formalized in writing and customized to your needs. That way you may get the results you want with less expense and less radical changes.

Professional nonprofit accounting services can help you deal with every day business matters and major events like mergers. Contact us at Mainstream Nonprofit Solutions to learn more about our wide range of administrative consulting areas to help you maximize your mission.