March 5, 2020; Chicago Sun-Times
A classic NPQ research article on nonprofit mergers by Judie Alnes says that mergers are often far more successful when motivated by collaborative vision rather than a need or deficit of one party or the other. In that work, she poses an intriguing question: “What if the whole proposition [of merging] were lighted differently to focus on the potential benefits in terms of power, agility, influence, and effectiveness? Might the conversation be more attractive to nonprofit boards?”
Alnes goes on to discuss merger goals as motivation, finding that in the end, the success of programmatic goals was more often clearly discernible in outcomes, at least in the short term of the study period, than financial goals. And it appears this merger of the well-known and well-respected weekly news magazine sold by homeless vendors in Chicago, StreetWise, and the venerable Chicago Metro YWCA, known for its mission of eliminating racism and empowering women, is a marriage built on vision. Neither of these organizations is in fiscal trouble. Neither is struggling with board or staffing issues. Both are stable, sustainable nonprofits. So, what brought these two together? And will this be a merger made in nonprofit heaven?
If you only look at their missions, you might find this to be an Odd Couple situation. The YWCA is a much larger organization, with dozens of programs around childcare, fighting child abuse, working for more inclusive workplaces, and working with low-income communities. Their annual operating budget is about 25 million dollars. StreetWise, on the other hand, works with about 125 vendors, homeless men and women (mostly men) who buy the magazines for 90 cents and sell them on street corners for two dollars. Their total annual budget comes in at $800,000. The connection between the two comes in with future goals for both organizations. But the relationship between the missions is not that difficult to discern, since both organizations can use the moment to expand their mission work.
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“Our mission we’re focused on is eliminating racism and empowering women,” said Dorri McWhorter, CEO of YWCA Metro Chicago. “And promoting peace, justice, freedom and dignity for all.” For her part, Julie Youngquist, CEO of StreetWise, says the back-office supports will be invaluable in helping them to extend their reach.
Even though the merger may make logistical sense on the surface, before it happened, there was a lot of searching on the part of StreetWise and lots of questions from both of these new partners. StreetWise spent seven years looking for the right partner organization. According to Jonathan Reinsdorf, Vice Chairman of the StreetWise board, there were many, many questions, especially about joining with an organization of the “opposite sex.” Only 25 percent of Streetwise vendors are female, but that is a number they hope to change. And their exec, publisher, and half of their board are women, so they resolved that issue quickly. For the YWCA, they were already serving men, and this seemed like a natural way to expand and reach a target population they wanted to serve.
One other note in the reasoning for StreetWise might ring true for other nonprofits. Because of their size and the competition with like-sized nonprofits, they felt limitations as a standalone charity. They concluded they could grow, be more efficient, and serve more people if they found the right merger partner. And they were willing to take their time when searching for their soulmate.—Carole Levine