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Saturday, July 4, 
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Dealmaking is up -- among nonprofits

Posted on July 31, 2008 at 3:11 PM
Filed under: Acquisitions | Corporate Strategy | Deal International | Growth Strategy
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LaneMerge.jpgThe dismal economy may be dampening M&A in some circles, but it's behind an uptick in mergers among nonprofits. That's according to the law firm Pillsbury Winthrop Shaw Pittman LLP, which has seen consolidation taking place among nonprofits looking to combine resources in a tough fundraising environment and to offer more benefits to members.

Here's what Jerald A. Jacobs, who runs Pillsbury's public practice had to say: "Nonprofit associations, which are traditionally less acquisitive in nature than corporations and inclined to exist as individual groups, feel they must consolidate in order to become more strategically valuable to dues-payers and donors."

A few of the recent nonprofit tie-ups include: The American Bankers Association and America's Community Bankers, the National Alliance for Autism Research and Autism Speaks, and the volunteer organizations Hands on Network and the Points of Light Foundation.

Nonprofit merges are tough to pull off. While financial and strategic acquirers can point to revenue generation and tangible synergies to justify a merger, says Jacobs, nonprofits must often sell the deal to stakeholders on little more than a vision for the combined organization. And there can be complex regulatory issues that go beyond those faced by for-profit entities. - Suzanne Stevens

 


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