Guest Blogger

To Merge Or Not To Merge: Is That the Question?

Filed By Guest Blogger | March 24, 2009 10:30 AM | comments

Filed in: The Movement, The Movement
Tags: Dixon Osburn, LGBT community, merging gay groups, non-profit consolidation

Editors' Note: Guest blogger Dixon Osburn was the Executive Director of Service Members Legal Defense Network for 13 years.

Dixon_Osburn.jpgKevin Naff, editor of The Washington Blade, and Joan Garry, former Executive Director of the Gay and Lesbian Alliance Against Defamation, have both written compelling columns in The Blade calling on LGBT organizations to explore merger. They both cite the recession as a driving factor, noting as Kerry Eleveld did in The Advocate, that a number of LGBT groups have laid off staff, frozen hiring, experienced significant reductions in event attendance, and are now facing serious projected revenue shortfalls in the year ahead.

I suggest that the call for merger conflates three principles: sound business reasons for merger, taking sensible steps to ride the recession wave, and re-imagining the equality strategy for our movement. Is the call for mergers putting the cart before the horse, or a bold step in realigning our national movement? In this column, let me outline some guiding principles for merger. I will write two other columns to follow - one outlining steps boards and staff can take to manage the economic crisis and the other offering some insights into how the community might re-imagine our movement.

There are at least five reasons why one or more organizations might consider merger advantageous: growth, synergy, diversification, economies of scale, or eliminating competition.

Corporations often merge to increase bottom line revenue. The same is true for nonprofit organizations. According to the Movement Advancement Project (MAP), of fifty-two leading LGBT organizations, there are 303,000 donors giving $35 or more per year and 18,400 who give $1,000 or more per year. MAP also notes that there is a surprisingly small overlap among those donors. Organizations whose donors do not overlap extensively are good candidates for merger. Additionally, some organizations rely more heavily on foundation (or government) grants than individual donors which may help diversify the funding base for the merged organization.

Organizations might also consider merger if there is synergy between the two organizations, meaning that when the organizations combine, the merger increases program effectiveness and reduces cost. Some LGBT organizations have competing programs addressing youth, faith and religion, or workplace discrimination / corporate equality. Other LGBT organizations pursue equality through the same strategy. Multiple organizations engage in impact litigation, or legislative lobbying, or public education, or research, or electing fair-minded candidates to office. There may exist synergy among some groups with similar programs or functional strategies if merged.

The third reason to merge is to diversify operations. Organizations here look to add functional expertise to improve their overall strategy, not eliminate duplicative actions as above. Legislative and litigation organizations may join. Grassroots and media watchdog organizations may combine. Strong single office organizations may merge with an organization with multiple offices nationwide. Diversification lets the whole become stronger than the sum of its parts.

A fourth reason that drives mergers is economies of scale. Merged organizations may free up resources by eliminating functions that could be carried out just as, or more, effectively by fewer people or resources. Some organizations could eliminate positions in finance, administration, development, communications or program. Some could eliminate duplicative equipment leases or combine offices.

Finally, organizations may take over other groups simply to eliminate competition. The stronger political / legal / electoral group may overtake the weaker one to consolidate support behind its strategy from donors and decision makers.

Just as there are reasons to merge, there are reasons not to merge. The actual financial costs of combining on ore more groups may exceed the benefits of merger. The political and philosophical differences between the two groups may make merger impractical. The multi-issue group with stronger finances may have a record of producing poor results compared to the smaller single-issue group. The missions may not fit well together: combining an impact litigation group with a legal aid group; merging a family support organization with a federal lobbying group; or merging a media watch dog with a professional association for journalists. Lastly, saving an organization that is about to go under by merger may make no sense if the other organization is gaining all of the other organization's problems and none of its benefits.

The bottom line is that the recession is not the reason to merge. A recession, though, may provide an opportunity for leaders to consider whether there are sound business or movement reasons to merge. In my next column, I will address what organizations leaders should consider to survive the recession.

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I would be a bit bothered by a big move to merge.
Many of the large groups really do a lot of gaywashing of bi, trans, asexual, intersexed etc issues. If the smaller groups which represent these issues were to be subsumed there would be no way to get any visibility for many of us and we would continue to be seen in the light of a subset of gay and the gaywashing would get worse. I think that if GLAAD, HRC, GLSEN, PFLAG and NGLTF were to merge what little any of them ever do to address queer issues that are not gay/lesbian issues would vanish since they would need to be seen to be inclusive when compared to their competitors for donations, not that I bwould give a dime to any of them myself. I think then the large amount of gaywashing that they do would drastically increase.
I prefer to keep it competitive so that they have to do something useful to get any money.

that's exactly what i was thinking as i was reading this. consolidation is bad for diversity within the movement. not only is it harder to hold a large institution's feet to the fire to get them to do something, but like rob points out, they lose the incentive to work for us.

(on the other hand, though, if organizations like HRC that do sloppy work on bi/trans issues merged with other issues doing sloppy work, it would probably just be a wash.)

Nice analytical, Masters thesis approach here. If that's what you are after. Bottom line is more than that. It's about current strategy, focus, and results on securing full civil rights under the CIVIL RIGHTS ACT. And is the current system of segmented, fragmented, splintered, disjointed, seperate rights fights accomplishing that. Charity and service groups could also benefit from a coordination of services, but right now, it is the major fundraising orgs that need to redefine their true mission. Raise funds and perpetuate themselves? Or, get back to grassroot basics, and targeting outcomes that will establish our rights under the CIVIL RIGHTS ACT?

I've never been fond of the non-profit industrial complex, and I think the LGBT NPIC is more insidious than most. Does anyone else notice, though that there's simply no mention here of, cough, cough, the *work* that groups ought to be doing? Oh, and I love the way grassroots organisations are just swept away in one fell swoop: "Grassroots and media watchdog organizations may combine."

Um, not to valorise grassroots work as somehow purer or more meaningful, but does it occur to the writer that grassroots organsing is often fundamentally opposed to the NPIC? And that, historically, the NPIC was designed to work itself out of existence and not balloon into such massive proportions? Here, all we read is the master plan for creating a behemoth of an LGBT giant corpo-non-profit monstrosity.

But then, I've always felt there's not much distinction between these entities anyway. So combining would make sense, since they're all focused on the same conservative agenda - gay marriage, hate crimes legislation, and DADT. They may call it something else, like "family equality," but the agenda is the same.

With all the finance-speak about "diversifying" and "synergy" - is this really much more than guaranteeing salaries for fat cat LGBT lobbyists?

"Fat cat LGBT lobbyists" sound about as real as unicorns. Can you name some for us?

All the folks I know that work for LGBT orgs are doing it because they're dedicated to the cause, not because of some mythical astronomical salary. Most would make far more working in a for-profit corporation.

Of course, I've never lived in DC and know no one who works for the LGBT lobbying org headquartered there. So if they've got a lock on the fat cats, I stand corrected.

Everyday Transperson | March 24, 2009 12:23 PM

A few points to raise here.

If I'm not mistaken, the last time I checked, most if not all of our GLBT organizations are set up as 501.C.3 NON-PROFIT organizations............So my question is are they running non-profit organizations or are they really trying to run these organizations as growing corporations ??? (adopted from the straight corporate model)

Mr. Osburn, you stated:

"Organizations might also consider merger if there is synergy between the two organizations, meaning that when the organizations combine, the merger increases program effectiveness and reduces cost. Some LGBT organizations have competing programs addressing youth, faith and religion, or workplace discrimination / corporate equality."

and also

"Finally, organizations may take over other groups simply to eliminate competition."

Give me a break !!! We are trying to further a GLBT cause for equal rights here, not to use some sort of "competitive strategy" or "cost saving benchmark" so that we can drive each other out of business...........That may be how corrupt straight America does business, but aren't they as community "leaders" following the same path ??

And besides, its so ironic to see that the former Executive Director of GLAAD propose such an idea, especially since they spend so much money towards the GLAAD Media Awards each year, this year if I'm not mistaken to be held at the Marriott Marquis in New York................. not exactly a Days Inn or Motel 6 (that's really a great example of cutting costs..............such hypocrisy !!)

I have seen this problem formulating for a long time now. Our GLBT non-profits recruiting these corporate MBAs, JDs and people fresh out of business school to run these organizations, when what they are really doing is trying to run corporations like what they were taught in business schools or from their straight corporate "allies".

So what's next ?? Our GLBT organizations asking congress for a federal bailout because they spent all their money on lavish galas (not so different from the bank parties and the corporate jets is it ??), or perhaps there will be public outrage in the future at our GLBT "Leaders" giving themselves bonuses while the rest of the community contributes to their "bottom line".........

So I say, its not a money problem. Its clearly a LEADERSHIP problem, because had they run their organizations with the intent that they were originally founded upon, instead of trying to act like the next corporate "GL" CEO, perhaps they wouldn't be in this financial mess that they are in !!!

I would hate to see the NCLR merge into, say, the HRC since it is devilishly hard to get Lesbian issues addressed at all. Even then, it is an uphill battle since HRC is seen as the sort of "offical" LG-sort of B, very little T lobbying organisation and has better access.

If NCLR were folded into HRC, we'd have a neo-Mattachine monolith on our hands by and large unresponsive to middle class and below LGBT concerns.

Something I neglected to say in my comment yesterday was that I thought your premise is all wrong. Your premise is that if there was no economic crisis, that the current system works, is effective, and should stay in place. WRONG!