Are Partnerships the New Mergers?

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April 30, 2011; Source: Times Union | Last week NPQ published a newswire about a new fund in Massachusetts that is designed to promote partnership between agencies – again, partnerships and not necessarily mergers. This article (linked to above) from Schenectady, N.Y. provides another example of what people are intending in crafting such relationships.

Parsons Child & Family Services and Northeast Parent & Child Society have a number of similarities. They both serve children and families, they both have approximately 600 staff and both have budgets of approximately $38 million, but apparently they have complementary offerings that, if put together, would result in clients being served more effectively.

So the two agencies have decided to create a “parent holding company” governed by a board of 20 people, ten each from both of the organizations. John Henley, the CEO of Northeast, says, "The chief benefit [of the measure] is that it will increase the scope and quality of service, and families will have access to both agencies." No layoffs are planned but some consolidation of offices is planned.

These types of sophisticated partnerships are hardly new in the sector and the range of organizational relationships that can be explored and wrought are many. It bodes well that the straight noise about the need for mergers has died down a bit giving way to a more nuanced view of interorganizational arrangements. —Ruth McCambridge