Maine’s Nonprofit Mergers – A Growth Industry

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March 15, 2011; Source: Mainebiz | Scott Schnapp of the Maine Association of Nonprofits says that the sector in that state is in the process of right sizing itself and he just may be right. Forty of the 135 nonprofits that have merged in the past five years did so in 2009, according to information from the Maine Secretary of State's office.

Schnapp says, "If you look at the last 40, 50 years, the sector has grown exponentially. At a certain point, market forces start to play a role."

The occasion of the comments was the announcement of a merger between the 46-year-old People's Regional Opportunity Program, and Youth Alternatives Ingraham, a 44-year-old agency. The first provides programs such as Head Start, heating assistance and housing support and the second provides mental health care for children and adults. In fact, Youth Alternatives Ingraham just three years ago merged with the Portland mental health agency Ingraham, nearly doubling its budget and staff. If the new merger proceeds as planned, the combined budget of the new entity will be between $36 and $37 million.

Mergers are often easier to pull off when one or another of the executives is already leaving or gone. PROP has been led by an interim president and CEO, Catherine Fellenz, since 2009 when its leader left to take another position. The board, apparently, seized the opportunity to look for a merger partner rather than another executive. "The board decided last fall to look for another strong leader with an organization with a compatible mission. Youth Alternatives Ingraham has a compatible mission, and Mike Tarpinian is a strong leader," says Fellenz.—Ruth McCambridge