Mergers and Amalgamations in the Canadian Nonprofit Sector: Benefits and Case Study

The Canadian nonprofit sector is composed of not-for-profit organizations, and this sector is dedicated to enhancing the quality of life for all Canadians. There are many different nonprofit organizations, including charities, social enterprises, and volunteer organizations. 

Nonprofits play an important role in Canada’s economy, and they contribute billions of dollars to the country’s GDP each year. In addition, nonprofits provide millions of jobs for Canadians, and they help to build strong communities throughout the country.

In Canada, there has been a recent trend of nonprofit organizations merging or amalgamating. This is being done for a number of reasons, such as to consolidate resources, increase efficiency, and improve service delivery. 

However, while this may be the right move for some organizations, it can also be difficult and risky. In this blog post, we will explore the phenomenon of mergers and amalgamations in the Canadian nonprofit sector and look at some of the pros and cons.

What are Amalgamations and Mergers in the Canadian Nonprofit Sector?

Mergers and amalgamations are two different ways nonprofits can join together.

A merger is when two or more organizations with comparable missions and operations merge to establish a new entity. Members of the original organizations will form the new organization, which will be given a new name. 

An amalgamation is similar to a merger in form, but amalgamation happens when a larger company acquires a smaller company and absorbs its operations into the larger company’s operations. This new organization will have the combined assets and liabilities of the previous organizations. The new organization members will be the members of the original organizations, and the new organization will have a new name.

Why Do Non-profits Turn to Amalgamations and Mergers?

There are several reasons why non-profits might turn to amalgamations and mergers.

Some of the most common reasons include:

• To pool resources and achieve economies of scale.
• To increase efficiency and effectiveness.
• To improve service delivery.
• To reduce costs.
• To achieve a common goal or purpose.
• To respond to government cuts.
• To respond to changes in the environment or sector.
• To merge with a more financially stable organization.
• In response to funders trying to reduce the number of organizations they fund and monitor.
• To increase the organization’s negotiating power with funders and suppliers.

Case Study of The Merger of Two Well-Known Nonprofit Human Services Organizations in Calgary

Two well-known Calgary-based community organizations, Aspen Family & Community Network Society (Aspen) and Boys & Girls Clubs of Calgary (BGCC), have merged into a new organization, the Trellis Society for Community Impact, or simply “Trellis,” to expand and create better support.

The new company has a $30 million/year operation, making it the largest nonprofit merger in Alberta history. It also creates a more comprehensive city-wide reach, and draws on the strengths of both organizations with many similarities and many differences.

The new organization builds on both organizations’ programming capabilities to provide a broader range of community services, including education, employment, as well as foster care, group care, and independent accommodation arrangements.

What are the Benefits of Amalgamations and Mergers?

There are a number of benefits to amalgamations and mergers, including:

• Economies of scale.
• Improved service delivery.
• Increased efficiency.
• Greater accountability to the community.
• Better coordination and collaboration between organizations.

It is important to note that not all amalgamations and mergers are successful. There can be resistance from staff, volunteers, and members of the community. The implementation of any amalgamation or merger should be carefully and thoughtfully planned in advance. Advance and ongoing consultation and communication with all stakeholders and maximizing their involvement in designing the new organization is very important before, during and after implementation.

It is important to have a clear vision and plan for how the new organization will function. The goal should be to improve service delivery and meet the needs of the community.

Conclusion

There are a number of benefits to amalgamations and mergers, including economies of scale, improved service delivery, and increased efficiency.

However, not all amalgamations and mergers are successful. It is important to have a clear vision and plan for how the new organization will function. The goal should be to improve service delivery and meet the needs of the community.