Like other nonprofits grappling with intensifying social problems and flat funding, two large, long-standing social services agencies are looking to a merger as a potential solution.
People's Regional Opportunity Program, founded in 1965 and based in Portland, has begun deliberating a merger with Youth Alternatives Ingraham, a 44-year-old agency headquartered in South Portland. PROP serves the disadvantaged in southern Maine with programs such as Head Start, heating assistance and housing support. Youth Alternatives Ingraham provides mental health care for children and adults, and also recently went through another merger. In 2007, it joined the Portland mental health agency Ingraham, bringing its budget up from $12 million to $22 million, and roughly doubling its staff.
In the past few years, PROP and Youth Alternatives Ingraham, along with other nonprofits, have seen the need increase in the communities they serve as the economy has weakened. At the same time, funding has become more tenuous in these political and economic times. Merging is a practical solution to increase efficiencies while maintaining or even improving services, according to Carole Martin, an independent nonprofit consultant in Rockland, who is advising both PROP and Youth Alternatives Ingraham.
"There is definitely an uptick in both the number of nonprofits that are considering merging, and the number who are entering into it," Martin says.
In the past five years in Maine, 135 nonprofits have merged. Forty alone did so in 2009, according to data from the Maine Secretary of State's office. Scott Schnapp, the executive director of the Maine Association of Nonprofits, says the industry is "right-sizing itself."
"If you look at the last 40, 50 years, the sector has grown exponentially," he says. "At a certain point, market forces start to play a role."
Those in the nonprofit sector say that merging is sometimes the last tool they have to expand or improve their mission without increasing their budget. "I think for those of us who have been in the social services field for the past eight years or so, we've tried various forms of gaining efficiencies," says Michael Tarpinian, the president of Youth Alternatives Ingraham. "We've reduced staff, reduced benefits to employees, all of those things that everyone does to try to sustain the program side of it and reduce and maintain a level administrative infrastructure. Those efficiencies have been had if you will, so the next process is really around bringing organizations together and finding even greater efficiencies."
The work that Youth Alternatives Ingraham and PROP do often overlaps in neighborhoods with high rates of poverty, he continues. "Many of the people in the communities PROP serves also have a diagnosis of mental illness," Tarpinian says. "As a mental health agency, we can very seamlessly refer those individuals [to PROP's programs] as opposed to referring them out to another organization where a whole new intake process begins."
If PROP and Youth Alternatives Ingraham join, they will have a combined budget of between $36 million and $37 million. Youth Alternatives Ingraham has a full-time staff of 260, while PROP hires about 200. A decision is still not likely for several months.
At this point, it is unclear whether any jobs will be targeted for elimination. But while achieving greater efficiencies can dovetail with the elimination of jobs in the for-profit sector, Martin points out that this is less of a focus in the nonprofit world. "Research shows that merging to save money is unlikely to yield that outcome," Martin says. "I really do think in the nonprofit realm it is about the efficient delivery of services."
In fact, to avoid such uncomfortable decisions, nonprofits often consider merging only when an executive steps down. Suzanne McCormick left her position as head of PROP in 2009 to lead the United Way of Greater Portland, and PROP seized the opportunity to consider changes, according to the agency's interim president and CEO, Catherine Fellenz.
"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," she says.
Tarpinian has led Youth Alternatives for more than 20 years. He would step into the head position of any new combined organization.
As PROP and Ingraham consider their possible future together, Martin says the most important element to consider, and one that can be easily overlooked, is how workplace routines and expectations will meld. "When organizations merge, and the post-merger integration is unsuccessful, there hasn't been a thorough enough look at the cultures and how they align," she says, which include practices such as when and how people work, how much play is allowed at the office and how informal managers are with subordinates.
When Youth Alternatives and Ingraham merged, Tarpinian says staff formed a culture committee to smooth over differences. "We decided early on we would take the best [practices] from both organizations," he says.
Both Tarpinian and Fellenz say their employees have expressed enthusiasm for the proposed merger. Tarpinian admits, however, that he does worry at times about the potential loss of "organizational intimacy."
But in the end, he sees more positives. "There is a wide menu of services we can wrap around families to keep them together, to keep their children safe, to support them as they find greater levels of independence," he says. "And the most important piece for me is that people won't have to repeat their stories when they see someone new in the organization."