Nonprofit Merger Case Study: Big Brothers Big Sisters of Metropolitan Chicago Regional Consolidation
Facing potential financial insolvency in 2006, Big Brothers Big Sisters of Metropolitan Chicago became a prime example of how nonprofit mergers can be incredible tools for maximizing nonprofit success through increased sector and geographic efficiency. Operating in local chapters throughout the United States, the Big Brothers Big Sisters organization is more often driven by local forces rather than regional or national structures. This leaves local organizations, even in neighboring counties, in drastically different circumstances. The solution? Merge into more regional organizations in order to operate more efficiently across large areas to accomplish their incredibly important mission of empowering at-risk youth by providing high-impact one-to-one mentoring that enables lifelong success.
From 2006 to 2010, Big Brothers Big Sisters of Metropolitan Chicago (BBBS-MC) expanded their geographical range, acquiring other BBBS chapters in nonprofit mergers along the way. The several year merger process began with a three-step plan for organizational restructuring. The first step involved cleanup, stabilization, and turnaround; the second, investment in capacity building; and finally, the third, included growth, expansion, and development. This plan was well-timed and executed resulting in a rapid shift from near financial insolvency to financial stability in several years. Looking at IRS filings from 2005, when BBBS-MC was nearly in financial ruin, the organization received $1,346,000 in revenue and held $224,000 in net assets. Skipping forward over a decade and through three mergers, BBBS-MC received $4.9 million in revenue and holds $3 million in net assets as of 2018. Using well-timed and strategically viable mergers, BBBS-MC turned from financial ruin to become a serious fundraiser and sustainable nonprofit organization.
When BBBS-MC acquired BBBS of Lake County, Illinois, it completed the consolidation of the Chicago region, previously served by four independent BBBS organizations. In the first nonprofit merger, in 2006, BBBS-MC acquired BBBS of Lake County, Indiana, which had become insolvent. In 2007, BBBS-MC assumed responsibility for the DuPage county chapter in Chicago’s western suburbs. The strategic merger plan was created because there existed a manageable path to serving more youth through an efficient regional program. Merger negotiations quickly turned into merger planning sessions when it was clear that it would result in better service. Apart from the ability to more efficiently distribute funds when and where they are needed, the merger reflects the financial sustainability that can be achieved by a well-timed nonprofit merger.
Another prime example of efficiency created through nonprofit mergers, this specific nonprofit merger case study illustrates the advantages of regional financial sustainability by seamlessly integrating a large geographic area. From reimagining fundraising and building substantial assets to serving 70% more children just five years after the merger, the decision to consolidate regional organizations streamlined the pipeline for donor dollars to result in services rendered. On many levels, this nonprofit merger case study serves as a great example; it has led many other BBBS regions to organize local chapters similarly. In addition to the technical aspects of the merger, it was initiated through the direction of the BBBS-MC CEO, Art Mollenhauer, revealing the advantage of great leadership and vision in novel circumstances.
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