Museums, other nonprofits join forces to survive economy
Andrew Masich has been to the altar three times, is looking to make a fourth trip, and that doesn’t count the one time he walked down the aisle with his wife.
Masich, president and CEO of the Heinz History Center, has been involved with mergers with the Meadowcroft Museum in Avella, the George Westinghouse Museum in Wilmerding and the Fort Pitt Museum, Downtown. Now the center is “dating” the Pittsburgh Police Historical Association.
“We’re in the preliminary phase of negotiation with them to determine if the history center is the best partner for them and their mission,” he said. “It seems like a good match to me, but we wouldn’t want to prematurely state that it’s going to happen.”
Many nonprofit experts say the economic downturn and a tight state budget have squeezed many nonprofit groups into considering mergers or partnerships.
“You’ve got a lot of nonprofits looking at mergers,” said Diana Bucco, president of The Forbes Funds. “Driving these are shrinking resources at a time when there are growing needs, so organizations are asking what’s the best way to provide help to those in need with limited resources.”
Since 2005, The Forbes Funds, a branch of The Pittsburgh Foundation, has worked on 32 efforts to restructure nonprofit groups. In the past two years, those requests have grown 44 percent, Bucco said.
Two years ago, helping nonprofit groups explore mergers or other combinations represented just 5 percent of Kate Dewey’s business. Dewey, a consultant specializing in nonprofit groups, said it now takes up nearly 30 percent of her work.
“Much of the financial environment for many organizations has changed significantly,” she said. “Unless they had a reserve fund, these organizations have eaten into any reserves they might have had.”
For example, the Western Pennsylvania chapter of the Multiple Sclerosis Service Society merged last year with UCP/CLASS, a group that serves residents with cerebral palsy or other disabilities.
Before the merger, the society was running up deficits of $80,000 to $90,000 a year on an annual budget of $750,000 and eating into its reserve fund, said Al Condeluci, CEO of UCP.
He said UCP, which has a $30 million budget, saved thousands of dollars in expenses for audits, bookkeeping and liability insurance through the newly merged multiple sclerosis program without adding costs.
Since the Fort Pitt Museum, formerly part of the state, merged with the Heinz Center last year, annual attendance has grown from 12,000 to 19,000 a year, Masich said.
“And that’s growing every year,” he added. “Just this calendar year, we’re seeing a doubling of school groups.”
Increasingly, Bucco said, many nonprofit groups that merge become a program within the larger group.
The MS Society became a division of UCP. In March, Amachi Pittsburgh moved its mentoring program for the children of prisoners to Volunteers of America of Pennsylvania, Southwestern region.
“It’s working swimmingly well,” said Pat Serey, chief development and marketing officer and vice president of the local Volunteers. “The key to that is we really spent approximately a year in dialogue with each other understanding each other’s culture, each other’s mission.”
Another factor making it easier for groups to merge is the ages of their bosses.
“As baby boomers retire, it makes it much easier for groups to consider merging or close alliances because you don’t have to fire somebody or negotiate paying two executives’ salaries,” said Peggy M. Outon, executive director of the Bayer Center for Nonprofit Management.
Not all this nonprofit “dating” leads to the altar, though. Sometimes groups just decide to live together.
Naomi’s Place in East Liberty provides housing for addicted women in their first two years of recovery. The group wants to partner with several employment agencies in the East End to help clients find and keep jobs but doesn’t plan to merge with anybody.
“Our main goal is to build the capacity of Naomi’s Place so we can serve more people in the community,” said executive director Cassandra Williams.