How To Collaborate Before A Merger

Nonprofit mergers don't just happen overnight. It's a long process that has many ups and downs and complications. In order for everything to happen smoothly, there needs to be constant communication between the parties.

This is the advice of Thomas A. McLaughlin in his book "Nonprofit Mergers and Alliances, Second Edition." He wrote that organizations must keep each other in the loop when discussing the possibility of a merger. This should begin by agreeing in advance -- verbally and in writing -- that no major decisions will be made without prior notice.

What other topics should be discussed during merger collaborations? McLaughlin suggested the following topics:

• Board of directors’ role or composition changes.
• Changes in accreditation status.
• Changes in major leases.
• Changes in office or program site space.
• Collective bargaining status.
• Insurance coverage lapses.
• Major asset acquisition or disposal plans.
• Major media attention planned or anticipated.
• Major new positions being added.
• Management changes of any material kind.
• New programs or services.
• Planned borrowing activity.
• Plans to submit proposals/new revenues received.
• Possible or actual litigation.
• Public processes anticipated (e.g., license renewals)/
• Significant budget variances.
• Unmet tax liabilities.