United Way Merger: Challenges Reinforce Commitment

Last year, the Berwick Area United Way (BAUW) contracted with PANO’s Consultant Collaborative to help them create a Strategic Plan and a Development Plan. Janet Unger, of Unger Consulting Services, partnering with Kate Gallagher, of coLab, worked with the board and staff to ensure sustainability of the United Way presence in the Berwick area.

One of the strategic initiatives was to decide if it would be beneficial for BAUW to merge with another United Way in the region. A Task Force was established to begin exploring all options including remaining independent as well as evaluating the pros and cons of a possible merger. BAUW board members began meeting with leaders of the neighboring United Ways. Bill Jones, President & CEO of United Way of Wyoming Valley (UWWV), said he walked into the Berwick office at their September board meeting with his board chair wondering “what if?”. They had great respect for BAUW and their leadership “but did not know if merging would make sense for either one of our organizations.”

The timeline for the BAUW evaluating a merger was expedited when their well-respected CEO, Ginny Crake, accepted a senior development position with the UWWV in November.

Cultural Compatibility

Few obstacles were likely to hinder the success of this merger given the natural synergies between these two United Ways. Both were passionately dedicated to the United Way mission while delivering on that promise in different ways. Another goal in the BAUW Strategic Plan was to transition to a focused priority for community impact. This strategic partnership made sense given that UWWV embraces the community impact model.

One indicator of compatibility was that both United Way merger teams resolved, early on, to keep this process and documentation as straightforward as possible. Mutual respect was apparent when staff and board members from the two United Ways first met.

Cost-Benefit

Contemplating this merger required that both organizations evaluate the likely costs against the anticipated benefits of merging. A significant investment of time and money was needed on the front end which will lead to eventual costs savings through reduced administrative expenses. Both United Ways concluded that aligning their people, campaigns, and operational systems would leverage community resources to maximize benefits for the individuals, families, and agencies served across this region of northeastern Pennsylvania.

Communication

A Merger Communications Plan helped to keep key donors, volunteers, partner agencies, community leaders, staff, and board members informed. The United Ways created a joint list of Frequently Asked Questions to proactively respond to common community concerns. While public transparency was desirable some specifics demanded confidentiality as merger negotiations were in progress.

Complexities

Mergers are multi-dimensional with many details to consider in the due diligence and discovery process. According to Janet Unger, the PANO Consultant Collaborative team member engaged to facilitate this merger process, “mergers take considerable time, thought, planning, and effort.”

Resolve and determination were required when potential obstacles arose. In this case, an issue requiring rigorous attention was a clause in the BAUW bylaws providing for a membership composed of campaign donors and recipients of agency services. A vote of community members was needed to execute this merger in addition to board approval. This one factor made a relatively uncomplicated merger with little conflict more difficult. Bill Jones of UWWV said, “Janet did the bulk of the heavy lifting and made this merger happen. She earned the trust of the board, staff, merger teams, and lawyers from both organizations. Her diligence was spectacular.”

Change

According to Unger, “Mergers are more about managing change than managing costs.” There will always be uncertainties and unknowns with a merger because it is impossible to answer every question before a decision to merge has been made. The prospect of organizational change inevitably breeds some fear and resistance both internally and externally. BAUW board member Ken Strish said, “Nobody likes change but it’s necessary to move forward.” BAUW and UWWV both had the courage to embrace the risks coupled with the rewards associated with a significant change. Janet Unger observed that “as challenges arose it seemed to reinforce the individual and collective commitment to the decision to merge and a readiness for change.” Over time, it became more apparent that leveraging their collective assets and working together would strengthen the ability of both United Ways to better serve their communities.

The recommendation to merge was unanimously approved by both United Ways in March. Bill Jones said, “We will endeavor to create the best possible United Way we can, and we will do it together.” In just six months, these two United Ways went from “What if?” to “What next?”. The Merger Integration Plan and process continue to evolve.

UW Merger
Ginny Crake, Vice President of Resource Development at UWWV and former CEO of BAUW, high fives Bill Jones, President & CEO of UWWV while Patrick J. Endler, Chairman, Board of Directors of UWWV, signs the Plan of Merger

This United Way merger, like many across the country, was stimulated in part by declining donations and the potential to increase efficiencies by aligning administrative processes. However, as Jones said, “it became evident that we could do more together than independently.”  This prevailing belief was the driving force behind the decision to merge.

PANO’s Consultant Collaborative

At PANO, we believe that together we can create something better than any single organization can build separately. The PANO Consultant Collaborative connects nonprofit organizations with experienced, like-minded professional consultants to increase efficacy and impact through collaborative, needs-based counsel. Each consultant brings a unique experience, specialization, and abilities to the group, which makes for a diverse and innovative approach to each project.

If your organization is looking for a consultant to help take your mission to the next level, from facilitating a board workshop to facilitating a merger, and everything in-between, check out PANO’s Consultant Collaborative!

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