New Moms + Parenthesis. Stronger Together

Monday, September 12, 2016

Partnership Will Scale Both Organizations’ Mission and Impact

Editor’s note: As part of Forefront’s Mission Sustainability Initiative, we’re highlighting models of successful partnerships that have put local nonprofits on a strategic path to sustainability and growth. On October 20, Forefront will host a learning summit at the Chase Auditorium in Chicago. The Summit will offer a unique opportunity for nonprofit leaders to learn about the principles and practices of strategic nonprofit alliances, partnerships, joint ventures, collaboratives, and mergers. Participants will explore how strategic partnerships have helped nonprofits align their services, strengthen their infrastructure, and scale their missions, even in the face of reduced funding and increased demand. Learn more and register here. 

Recently, New Moms acquired Parenthesis in order to better serve their community. We spoke with Laura Zumdahl President + CEO of New Moms to talk about the strategic restructuring process and how it will scale the mission and impact of both organizations. 

What were the circumstances leading up to your strategic partnership? How did you decide to merge?

We were approached by Parenthesis after their board had gone through an examination process and decided that in order to sustain their mission and programs long-term, it would be wise for them to become acquired by a larger agency so they could gain efficiencies  and cost savings that they'd never be able to achieve as a small, independent organization. They had been very thoughtful in determining their options and what they were looking for in a partner, which was a strong foundation on which to start strategic partnership conversations. 

At the same time, New Moms was open to expanding our programming in ways that made sense with our mission and we shared a geographic border (the west side of Chicago and the near western suburbs), where both agencies frequently had clients go back and forth. The New Moms board had discussed expanding our services to the Oak Park area in the past and so when the opportunity presented itself with Parenthesis, it was a good fit for our strategic vision of strengthening and expanding services in a way that made sense with our model and expertise in serving families. 

What were your goals at the end of the process?

At the end of the process we want to be a combined, stronger organization to serve families. From the beginning this means we have focused on having a smooth transition so client services aren't disrupted and programs continue seamlessly, while behind the scenes integrating Parenthesis' operations into New Moms' operations so long-term efficiencies can be realized. 

What was the process of merging like? Did you use a consultant or any legal counsel? How and at what points did you engage your stakeholders?

The two agencies underwent different individual processes at first of examining their options and considering how a formal partnership could look. The two executive directors and board chairs were involved in many conversations and ultimately both boards of directors voted to move into a formal due diligence phase of examination. Both agencies were aided by excellent pro bono legal counsel from Sidley Austin and Mayer Brown, who became involved during our due diligence phase and helped both agencies navigate through the discussions of how the legal transfer of assets and assumption of responsibilities would take place. 

As we moved into the due diligence phase we also began having conversations with our key stakeholders. We wanted to understand what, if any, concerns would be out there about New Moms acquiring Parenthesis and also use it as an opportunity to share with our key donors, institutional funders, staff, clients, and community members about why this move made sense. In our case, Parenthesis' executive director was leaving to take another role in the sector and so as President & CEO of New Moms, I spent much of my summer leading up to our Sept. 1 acquisition, meeting with Parenthesis' stakeholders and learning from all the various parties about the possibilities and pitfalls we may encounter with bringing Parenthesis into New Moms. 

How did you decide on leadership for the new organization?

The Parenthesis' executive director had been instrumental in helping their board to recognize the possibilities a partnership would provide and realized that as part of such an arrangement the ED position for Parenthesis would have to change. The timing worked out well in our case and Parenthesis' executive director, Amy Starin, transitioned out of her role as ED and into a new role at a foundation. As the larger agency acquiring Parenthesis, New Moms' leadership team continued in their roles and we brought the other Parenthesis staff members over to our organization to continue Parenthesis' programs. In our case the leadership transition went as smoothly as possible, and I think much of that is due to Amy's desire to help make it a good transition for Parenthesis. She was very willing to work with me and our leadership team to understand Parenthesis and set up the transition well. Our good working relationship is one of the reasons it went so well. 

How will you measure effectiveness of combining your organizations?

Our metrics of success fall into two buckets. First, we want to continue positive outcomes from our programs for families in all our locations. The combined entity sets us up to be a stronger, more effective organization programmatically and our model should also prove to enhance the impact we have on families. Second, we will measure our financial progress in reducing some key administrative costs through the combining of organizations. These metrics of efficiency will allow us to save money on administrative functions and instead invest those dollars in programs. Some of these cost savings will take a year to recognize, but after the transition, we expect there to be both financial savings and improved outcomes. 

What kind of impact do you expect to see for your community?

The long-term impact is that Parenthesis' programs will be preserved and strengthened for the Oak Park area community. Without this type of arrangement, Parenthesis may not have been able to sustain their operations long-term as a small independent nonprofit. Their integration with New Moms preserves those services and creates opportunities for growth because they are now bolstered by having a larger organization behind them. For New Moms, it is also an opportunity for us to strengthen resources and program opportunities to serve more young moms and children with a model that has been proven to work. We're excited about the way this partnership leverages the resources of both organizations with over 30 years of experience each to build a stronger combined entity. 

Do you have any advice for nonprofits thinking about strategic restructuring?

Don't be afraid. At the outset neither organization's ED had been involved in a strategic restructuring before so it was a learning experience for both organizations and our boards. But we were bolstered by fantastic pro bono help from our legal counsel and resources from some of our funding partners to help us make it a successful transition. 

Ultimately, restructuring in any format means taking your ego out of the game and instead focusing on what is best for your clients and services long-term. If you can keep that shared focus on the ultimate goal, it's easier to make decisions about what's best for your nonprofit and not just your job. I challenge leaders of nonprofits to think about how they can leverage their resources to build even stronger nonprofits through strategic partnerships and restructuring opportunities. If we want impact, then we have to ultimately be willing to put aside our belief that we're the only ones or best ones doing something and instead find ways to work together with others in order to sustain the mission in the long-term. 

~ Laura Zumdahl, President + CEO, New Moms