Due to massive federal funding cuts, some nonprofits are considering mergers or acquisitions with complementary services. What is the process and how do you fund it? Some foundations are stepping up to help.
“The last big period for nonprofit mergers was more than a decade ago, when vulnerable charities sought lifelines during and immediately after the Great Recession.”
When there is so much at stake – providing affordable housing, nourishing meals, clothing and other important items to those in need – it’s imperative that our nonprofits get the help they need to continue to support the community.
First of all, are you looking for nonprofit funding? Here is a list of California foundations ready to help.
California Foundations Working to Assist Nonprofits Looking to Merge
- California Wellness Foundation – supports nonprofit organizations focused on diversity
- Akonadi – focused on racial justice initiatives
- Conrad N. Hilton Foundation – supports the following causes: confronting sight loss, overcoming multiple sclerosis, disaster response
- San Francisco Foundation – provides funding and support to organizations working on issues such as affordable housing, job training, community organizing and social justice campaigns
- Emerson Collective – partners with organizations working in the areas of education, immigration reform, climate and the environment, and media and journalism
- Crankstart – supports wider access to better education
- Evelyn and Walter Haas Jr. Fund – supports nonprofits focused on advancing immigrant rights, LGBTQ+ rights, education equity and leadership development
- Silicon Valley Community Foundation – helps nonprofits that are serving communities facing barriers to social and economic opportunities
Is It Time to Merge?
Before you start to consider a nonprofit merger, take the time to weigh your other options:
Endowments/Grants: You may have already explored this option, but if you haven’t, The California Endowment offers grants through GuideStar. Start here.
Corporate partnerships: This can include cause-based marketing, skills-based volunteering, and in-kind support.
Crowdfunding: This model requires careful planning and can take time to develop, but it can be seen as an investment in both fundraising and community building.
Diversifying income: Explore fee-for-service offerings including consulting services in your organization’s area of expertise, sliding-scale pricing models, digital products and product sales. You can also rent out unused space for workshops, events or coworking or allow other mission-similar brands to use your logo in return for a donation (cause-aligned promotions).
Still Considering Nonprofit M&A?
Here’s what you can do to prepare for a merger:
- Talk about challenges
- Explore partnerships
- Communicate early and often about your nonprofit vision and mission
- Develop a working list of similar nonprofits or organizations that offer services that benefit your members
- Be open-minded to new forms of programs and services
“Funders, staff, volunteers, and the community all have a stake in your work. Engaging them early and communicating clearly about the reasons for a merger is critical. “
At LvHJ, we’re here to help! Contact us if you are looking for alternative ways to provide funding for your nonprofit or if you have questions about nonprofit M&A.
Nonprofit Merger and Acquisition FAQ
When should I consider nonprofit M&A?
M&A is a complex process. Consider alternate funding strategies before jumping into M&A exploration. Talk to a consultant or financial advisor familiar with nonprofit organizational structures and funding.
How to merge two nonprofit organizations?
Initial steps toward merging two nonprofits include working with the leaders of both nonprofits to conduct thorough due diligence, assessing the fit of the two organizations, including vision and mission goals, and signing an NDA. Drafting a memorandum of understanding will also clarify the intentions and roles of both parties.
Could a merger actually help my nonprofit?
A merger could help by increasing impact and visibility, improving operational efficiency and enhancing financial stability for your combined nonprofit.
Can a nonprofit acquire another nonprofit?
Yes, a nonprofit can acquire another nonprofit through either a merger, consolidation or asset purchase.
Can a nonprofit merge with a for-profit company?
Yes, a nonprofit can merge with a for-profit, but it requires careful planning and adherence to legal and tax regulations to maintain the nonprofit’s tax-exempt status.
- https://www.philanthropy.com/article/mergers-have-become-a-lifeline-for-nonprofits-will-foundations-help-cover-the-costs
- https://www.lawhelp.org/dc/resource/nonprofit-news-summer-2025-nonprofit-mergers
- https://sdvoice.info/a-200-million-endowment-focused-on-black-americans-is-taking-shape/
- https://humentum.org/blog-media/beyond-grants-7-alternative-funding-models-for-nonprofits/
