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Thursday, December 17th, 2020

Local nonprofit merger a win-win

By Sabine Kortals Stein

 Pre-COVID, a study reported on by the Stanford Social Innovation Review uncovered what drives successful mergers, suggesting that more nonprofits should consider mergers as a useful tool to increase impact. Indeed, in 88% of the cases studied, both acquired and acquiring nonprofits confirmed that their organizations were better off post-merger, with “better” defined as achieving organizational goals and increasing collective impact.

Fast forward to 2020 when many nonprofits find themselves in dire financial straits, or otherwise at a crossroads. Locally, we spoke to Jacob Harmon, Executive Director of Boulder Voices for Children (formerly Voices for Children CASA and a prior SVP Catapult investee); and Mandy Walker, Executive Director of Children First of the Rockies, about their recent merger.

“About 18 months ago, Jacob and I started talking about a potential merger,” recalls Mandy, who is still leading Children First of the Rockies as it wraps up operations and transitions vital services to Boulder Voices for Children. “Our conversation was inspired by a discussion in the SVP Invested Leaders group, which we both participated in.”

She continues, “It’s critical that the services provided by Children First of the Rockies exist in this community for families in crisis – including supervised, affordable visits and exchanges that don’t involve Child Protective Services, and teaching parenting skills.

“Jacob explained that he was thinking about providing similar services through Boulder Voices for Children, and we discussed what that would mean from a funding perspective – that is, potentially competing for, or jeopardizing limited dollars –, as well as from a community perspective, possibly causing confusion.

“The more we talked, the more we realized it made sense to collaborate to ensure these essential services in our community.”

According to Mandy, the financial structures of the two organizations were very different. “Boulder Voices for Children is a lot more stable,” she explains. “And when the pandemic happened – realizing that Children First wouldn’t be able to raise enough funds, and that we’d have to cancel services – I called Jacob and said we needed to speed things up.

“It was clear that Children First of the Rockies wasn’t going to survive COVID, although we’d done everything we could. But I wanted to manage our dissolution in a way that was as seamless as possible for our funders and clients.” As it turns out, according to Mandy, “every single Children First funder agreed to reassign unexpended grant monies to Voices for Children.”

Adds Jacob, “The pandemic is a challenge for nonprofits in a lot of ways because of the many uncertainties it creates – in our economy, and in our ability to fundraise and support our programs, specifically around child welfare.”

Boulder Voices for Children tallies more than 2,500 children who experience abuse and neglect in our county each year; and more than 300 who are removed from their homes and placed in foster care. Says Jacob, “Since the pandemic began, the State of Colorado has seen a 50% decline in child abuse reporting, but we know the abuse is still happening. It’s just not being seen and reported by teachers, counselors, pediatricians, neighbors, bus drivers, and others who aren’t able to see those kids during pandemic restrictions.

“With school starting, we don’t know yet how many cases may come in, which further creates uncertainty around programming and fundraising – on top of uncertainties around state and local budgets, and what funding we’re going to land.

“For the most part, however, we’re in good financial shape. But for other nonprofits, like Children First of the Rockies, disruptions to in-person services and fee structures are too much to bear.”

Jacob confirms alignment between Children First and Voices for Children, and noted his organization’s tremendous program growth. “We’ve tripled our number of volunteers since I joined the organization, and we’ve gone from serving 40% of cases in Boulder County to serving 100% of cases.

“In March, we closed on a new space. In April, we moved in. And in May, we were in a position to meet the accelerated timeline of Children First of the Rockies.”

The two organizations retained legal counsel to explore options for a formal arrangement, ultimately settling on a program acquisition. “It was a lot of work, but it was also a lot easier than I thought it would be,” says Jacob. “More importantly, it allowed us to really reconsider the service we want to provide, and its benefit to the community. Through fresh eyes, it was good to rethink the program from the ground up and build something sustainable that serves kids better, too.”

Jacob notes that being an SVP Catapult investee was transformative for Boulder Voices for Children. “Those three years brought us to a place – financially and programmatically – where we could explore creative solutions and take a risk like this.”

All told, Children First for the Rockies transitioned 20 families to Boulder Voices for Children. Concludes Mandy, “If Jacob and I hadn’t collaborated, 20 families would have been left scrambling for affordable services.

“I encourage nonprofits to look for similar out-of-the box solutions, and to be open to mergers and acquisitions if they’re financially stressed and know another agency in same field. Be open to the conversation.”

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