Merger Fever in San Francisco

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January 5, 2011; Source: Marin Independent Journal | It should be no surprise that California – a state with a budget gap that may near $28 billion through mid-2012 – is no stranger to mergers of service organizations. Here are two high profile examples from the past week.

The San Francisco Food Bank merged with the Marin Food Bank this week. The merger was facilitated by Marin Community Foundation, which provided $200,000 in operational and planning costs. The engagement lasted two years since, in 2008, the Marin Food Bank, which was organized to respond to limited need, found itself unable to keep up with much increased demand and it has relied increasingly on the San Francisco Food Bank for food and distribution. This merger appears to be formalizing an existing relationship.

More notably, perhaps, in San Francisco, the historic Haight Ashbury Free Clinics, which was founded in 1967 will be acquired by Walden House. The deal was formalized this past week with a letter of intent.

The Free Clinics, which was reliant on the city for 70 percent of its budget, saw its funding cut back to half of what it had been in 2008. The group could no longer go it alone.

Walden House, the other partner, provides residential and outpatient substance abuse and mental health programs and was started in 1969. Vitka Eisen, the current executive of Walden House, will lead the merged organization while the executive of the Haight Ashbury Free Clinics steps down.

Eisen has a long history with both organizations since she was once a patient at the Height Ashbury Clinics and was referred to Walden House to kick a drug habit. She then went on to get her doctorate at Harvard University. Before she was the CEO at Walden House she was the COO.

Walden House has a budget of $58 million as contrasted with Haight Ashbury’s $8 million. The merger makes sense in that it brings together a number of services used by the same population as is evidenced by Eisen’s story but that does not mean the road ahead will be easy street. Walden House has had its own state contracts cut and has had to make serious cuts to its prison program.

The merger comes in the wake of the closure of New Leaf, another, San Francisco center that had provided similar services to the LGBT community. It had been hit with increased rent and health care costs that it could not cover. —Ruth McCambridge