Funding cuts, economic uncertainty, and shifting political dynamics are pushing more social sector leaders to consider strategic alliances, mergers, or acquisitions as possible paths forward.
Why It Matters: The pressure to consolidate is real, but the track record is mixed. Some mergers create stronger, more sustainable organizations. Others destroy what made each organization valuable in the first place.
Having been part of such consolidation efforts as a board member, staff person, and consultant, and having interviewed dozens of others earlier this year who’ve led successful and unsuccessful mergers, we’ve identified three mistakes that can derail consolidation efforts before they begin.
Mistake One: Failing to assess organizational change readiness
Nonprofit executives guess (or don’t know) their organization’s change readiness, including that of their board. Strategic alliances, mergers, and acquisitions create cascading waves of change, whether your organization pursues them from strength or necessity. The mindsets, skillsets, and capacity for change determine the success or failure of consolidation ventures.
Mistake Two: Dramatically underestimating the true cost
Leaders know they’ll have to spend money on obvious support, like legal fees and financial expert costs, but significantly underestimate just how much. At the same time, they often overlook entirely hidden costs, such as executive time, lost productivity, potential staff turnover, dips in morale, donor attrition, and cultural erosion. The runway to realize ROI stretches far longer than most anticipate, often requiring years rather than months to see meaningful benefits.
Mistake Three: Relying on private sector playbooks
With limited nonprofit-specific M&A resources available, executives default to corporate merger research and frameworks. But nonprofit consolidations aren’t corporate acquisitions. Mission alignment, donor relationships, community trust, and regulatory considerations create fundamentally different challenges that private sector strategies can’t address.
Your Next Steps
At CSR Communications, we’re working to close this knowledge gap with relevant, actionable guidance for nonprofits and funders considering strategic partnerships. To request our Nonprofit Mergers & Acquisitions Action Brief, click here.
Join our BoardCQ Webinar and Demo on October 22nd, 2025, or access the replay. With the social sector in upheaval this year, those on solid footing heading into 2026 will be there because they have change-ready, change-capable, and change-resilient boards. Crisis management has become a daily routine. The cost of waiting to assess your board’s readiness is too high when every decision matters more than ever.
