Nonprofits join forces to survive
By Maria Saporta
Friday, April 30, 2010
In what could be the shape of things to come, two Atlanta nonprofits have joined forces to have more impact on the community.
As of May 1, the Samaritan House and the Atlanta Enterprise Center are becoming one entity called the Atlanta Center for Self-Sufficiency.
“Nonprofits are having the same problems as for-profits,” said Tom Body, who is chairing the new organization. “A lot of them are not going to make it. When you have a downturn, people making grants have less money to give away.”
Executing a merger of equals did have its challenges. Both entities were almost the same size, both had strong boards and both were solvent. That meant the new merged entity would have to strike a delicate balance by leveraging the best from each organization. Discussions began more than a year ago.
But there were several other factors that helped propel the merger. It just so happened that both the Samaritan House and the Atlanta Enterprise Center were losing their executive directors. A search firm was hired to look for a new executive who could help put both groups together.
That executive ended up being Charles Edwards, who served as assistant dean for corporate relations at Georgia State University’s J. Mack Robinson College of Business. Edwards also served as chief marketing officer of the 1996 Paralympics Organizing Committee.
Edwards started working for the organizations as an independent contractor until a merger could be put together. He quickly saw the opportunity of joining the two organizations.
“The foundation community has fewer funds to give out, and they want nonprofit agencies with similar missions to collaborate,” Edwards said. “Nonprofits have no choice but to take a serious look at collaborations with other nonprofits with similar missions. We want to become the ‘go to’ agency for employment readiness for the homeless in Atlanta.”
It was Horace Sibley’s idea to get both entities to work together. Sibley was the chairman of the Regional Commission on Homelessness for more than six years.
“There are only limited funds to go around,” Sibley said. “If you build efficiencies and effectiveness, the homeless will be better served. It just makes sense.”
Russ Hardin, president of the Robert W. Woodruff Foundation and the Joseph B. Whitehead Foundation, supports such collaborations. The Whitehead Foundation just made a $500,000 grant as part of a $1.7 million campaign to support the merger.
Body said that nearly $1 million already has been raised from several strategic donors, including $150,000 from the Sara Giles Moore Foundation and $75,000 from the Tull Charitable Trust, among others. The campaign also has received 100 percent participation from its board.
The merged organization will continue to provide all the same services that the individual groups offered, but it plans to improve and expand those services.
For example, both groups offered a one-week job training program. Now that training will be expanded to four weeks.
The merged entity also intends to use both staff workers and volunteers to help manage the cases of each of the homeless people that they serve. Instead of just monitoring the individual cases for 90 days, the merged agency will provide support for 12 months.
Both entities combined served a total of 1,500 people a year, which is not a large enough group to make a noticeable impact when there are about 21,000 homeless that need support.
“Long term, strategically we want to grow to be able to serve a population of about 12,000, which would be a robust and broad program,” Edwards said. “The organizations would not have been able to have that as a strategy without merging.”
Edwards also envisions creating a new model by establishing a commercial and competitive cleaning service.
“The primary objective is to generate as much cash flow as possible,” Edwards said. “But we also plan to become a bona fide employer of our clients. I want this to be a social enterprise venture.”
Body believes that it will be easier for the merged organization to raise money and increase its community profile.
Body also gave credit to Ellen Macht, a nonprofit consultant who had experience in mergers and acquisitions, for helping coach the merger of the organizations.
When Macht read both organizations’ mission statements and guiding principles, she said they were “almost identical,” which made a merger more plausible.
“In my view, nonprofits need to think strategically on a program basis and on a financial basis,” Macht said. “They need to look at where it does make sense to work strategically with others.”
The merger of the Samaritan House and the Atlanta Enterprise Center has been particularly satisfying for Macht, who has agreed to go on the board because she really likes the work that both organizations were doing.
“It’s a good thing for the community because they will be a much greater entity as one,” she said.