Nonprofit Mergers: A Case Study of Two Asian American Nonprofits
EBAYC and OASES share their story
Nonprofit mergers are gaining in popularity and many donors are supporting the transition process. Examples of successful mergers have been documented but we did not find one that highlighted the experiences of Asian American nonprofits. When we learned about the merger of Oakland Asian Educational Services (OASES) and East Bay Asian Youth Center (EBAYC), we wanted to document the story and follow their lessons learned.
The report, The Merger of Two Youth Services Nonprofits: A Case Study on East Bay Asian Youth Center (EBAYC) and Oakland Asian Student Educational Services (OASES), can be downloaded here.
On August 19, 2014, we sponsored a lunch program with Northern California Grantmakers to share the case study and hear from a panel of funders that supported EBAYC in the transition. The panelists spoke about their capacity building work, including nonprofit mergers, what makes them successful, and lessons learned.
Commentary from Ted Dang, Board Member
As a long time active member of the East Bay Asian American community, I am familiar with both OASES and EBAYC and many of their board and staff members. Their recent merger is noteworthy as an example of how nonprofits are successfully adapting to current economic trends. My fellow board members at the Chinese American Community Foundation and I are pleased to share their story with you in the hopes that one candid experience can set the stage for future opportunities that strengthen the bonds in our community and put our limited resources to more impactful use.
The 2008 economic downturn impacted all industries, including the public sector. Nonprofit social service organizations found themselves in a predicament where demand for their services grew while revenues decreased. OASES and EBACYC were not immune to this dilemma as they endured cutbacks from the City of Oakland, County of Alameda, and Oakland Unified School District’s budgets. Confronting these changes were the key staff and board members of both organizations. It was critical that they step outside of their normal business practices and do something different in order to continue to meet their constituents’ needs. The merger was not only a solution to the funding crisis but it was also a great opportunity for both groups to complement each other’s strengths and build a stronger organization for years to come.
There are many lessons learned from this merger and what I see are generally good practices of successful organizations. These include:
1. While passion fuels the drive to serve, good management practices are vital to sustaining the organization itself. Knowing how to balance a budget, market the organizational brand, identify multiple revenue sources, understand their “competition,” control expenses, and complete long-term strategic plans help an organization to overcome challenges and grow.
2. A board governance model that includes individuals with professional expertise and representatives from the community being served creates a strong foundation for the organization. Board members with financial, legal, business, or other professional experience can contribute specialized and technical skills. Community residents like parents and legal guardians, provide on-the-ground perspective on community needs. A diverse board can help the organization understand how to prioritize needs and to address them with the resources available.
3. Organizations must be able to anticipate and adapt quickly to changes in the political and economic climate. Sometimes solutions require thinking outside of the box and trying something new. They also require a willingness to learn from good practices in both the public and private sectors. Case studies of how other organizations handle crisis can serve as excellent learning tools.
We are impressed with the leadership of both organizations in their abilities to recognize the opportunity to do more for the community and to take the necessary calculated risks required. We are also thrilled that the new leadership believes in the importance of sharing their experiences and serving as a resource for the community. The Chinese American Community Foundation is pleased to have the opportunity to document this story and hope it will add value to the collective knowledge in making our community stronger.