When All Else Fails: Merge
The general inability of large organizations to face change and flexibly deal with it hit home with this recent headline in Toronto’s Globe and Mail: Donation drop forces merger of Canada’s largest cancer charities,
The merger of the Canadian Cancer Society (CCS) and the Canadian Breast Cancer Foundation (CBCF) was triggered by revenue decline of 16% at the CCS and 33% at the CBCF. Both charities had begun to eat heavily into their reserves.
The chair of the CCS, Robert Lawrie, whose day job is that of a mergers and acquisition specialist, said “the deal amounts to the reinvention of the cancer charities and might be copied by other charities that are struggling under bloated costs and falling donations. He noted that there are about 300 smaller cancer charities in Canada and that more mergers were likely to follow.
According to the Globe & Mail, other disease charities are also the victims of falling revenue and noted that in general, “Canadians are becoming less generous.”
The leaders of the two big cancer charities attributed the decline to “donor fatigue” … the explosion in the number of health charities in the last decade or so … and one-off events like the fire in Fort McMurry, Alberta that diverted donor dollars from the health charities.
In my experience these are the usual excuses and I just don’t buy ‘em. These are large, established brands with years of experience and the ability to not only survive but thrive –assuming their mindset was not stuck in maintaining the status quo.
What the story failed to note – and I hope some Canadian Agitators will weigh in — was what new efforts or initiatives had been undertaken over the past five years and, if any, why they failed.
Are we looking at a future merger of the American Cancer Society and Susan G. Komen, or Cancer Research UK and Macmillan Cancer Support?
What’s happening in Canada is no different than trends among the big disease charities in the U.S. and the U.K. Business-as-usual tactics aren’t working … strategies that continue view maintaining the status quo as the least risky path are those in danger of failing the most. And yet we read little of bold experimentation and risk-taking among the big boys.
Why? I suspect it’s rooted in the inability to focus on strategy and what ‘strategy’ means. (See Agitator’s Poor or No Strategy—Barriers to Growth Part 9.)
I ended that post on strategy with this observation …
“Here are two quick tests to determine if you truly have a strategy aimed at growth:
- If there is no risk, there is no strategy.
- If you feel comfortable, there is no strategy.”
I fear for the future of many large and important organizations. So much is known about what it takes to grow and thrive, yet so little is done by way of taking the action required to avoid that decline.
If you share my curiosity and wonder what can and should be done to ensure a bright and growing future, I hope you’ll take the time to read Adrian Sergeant and Jen Shang’s remarkable study, Great Fundraising. You’ll find both a summary and also a link to download their full report in that post.
For an analysis that Kevin Schulman and I wrote on what mindsets, methods and metrics separate a ‘growth’ organization from those in decline or stuck on a plateau, you’ll find our Overcoming Barriers to Growth in the spring 2015 issue of NYU Philanthropy.
P.S. Over the years The Agitator and our readers have also punched in on the subject of mergers and the pros and cons of combining forces.
Tom first logged in on this subject 9 years ago with Too Much Charity? where he argues for a ‘perform or die’ standard or perhaps a government ‘sunset’ provision for those nonprofits who underperform.
For a look at the proliferation of large numbers of small charities, see Grouper Eats Shark for a discussion of the benefits that might come from mergers in Maine.
In Fundraising Desperation and Chaos, I urge that the nonprofit sector should NOT be immune to health pruning and consolidation and explain why our sector needs to attract new sources of investment funding.