A case study shows how merging or collaborating with like-minded agencies can help not-for-profits more effectively achieve their objectives.
In 2007 an existential challenge at the Children's Trust Fund in Columbia, S.C., led to a merger that shows how other not-for-profits can join forces with their peers for greater effectiveness.
More than 20 years after the founding of the Children's Trust Fund, board involvement was nominal until newly appointed board members asked the question, "Why do we still exist?" Uncertain of its ongoing impact, the board considered distributing the balance of its endowment, which was then at $1 million, to suitable child-serving organizations.
This purposeful question is something many not-for-profits find themselves asking in a sector where a multitude of good intentions is matched by overlapping purposes and agendas. According to the most recent figures from the National Center for Charitable Statistics, there are more than 1.5 million tax-exempt organizations in the United States. Consider, for example, the enormous number of not-for-profits devoted to fighting cancer, and it's easy to imagine that the fight could become more efficient with the benefit of consolidation.
At the Children's Trust Fund, the answer to the existential question helped the organization fulfill goals that had been established many years earlier. In 1984, the Children's Trust Fund was created as a quasi-governmental not-for-profit agency with a mission of preventing the abuse and neglect of children. Their board was governor-appointed and state Senate-confirmed, and it was made up of nine influential state leaders who believed in the mission and were committed to its success.
The statute that established the Children's Trust Fund was prescriptive on required board member expertise that included three members knowledgeable in banking, finance, investments, tax laws, or business; three members knowledgeable in the organization and administration of volunteer community services and grant administration; and three members knowledgeable in child development, child health, child psychology, education, juvenile delinquency, or a related field. Its goal was to create an endowment that would provide funding for child abuse prevention programs in perpetuity. It was decided that the endowment should reach $5 million before all of the credited earnings plus all future annual deposits from contributions would be available for disbursement. In the meantime, the board managed some federal grants and distributed those funds across the state. Approximately 10 years after the Children's Trust Fund was...