December 04, 2015

To Strengthen the Nonprofit World, Independent Sector and the Council on Foundations Should Merge

Emmett Carson, chief executive of the Silicon Valley Community Foundation, believes the Council on Foundations and Independent Sector should merge. Below, he writes to the board chairman of the council, Sherry Magill, and Neil Nicoll, chairman of Independent Sector, to explain his rationale.

Dear Sherry and Neil:

I am writing to you on a matter of utmost importance and urgency — the future direction of the philanthropic and nonprofit sector.

I write as an institutional member of both the Council on Foundations and Independent Sector. I am also a former board chair of the council and have served on numerous Independent Sectors committees. I mention this because the three of us share a deep commitment to improving the lives of everyday people.

Over time, every organization moves through a life cycle of start-up, rapid growth, peak performance, and an inevitable decline. At the point of decline, organizations engage in a process of renewal that they hope will lead them back into a cycle of rapid growth followed by another life cycle.

The council and Independent Sector are both embarked on a process of renewal. Both organizations have recently developed new strategic directions that emphasize their hope to have a greater voice in the public square. Both organizations’ strategic plans foresee new and exciting directions. Unfortunately, each is likely to fall short of igniting the passion, power, and influence of the philanthropic and nonprofit sectors. Why? The pattern of each organization has been largely to talk to their members about themselves and engage in public policy only as it relates to narrow discussions about the tax code and regulations that affect our sector’s operations.

We can continue to do what we have done and get the results that we have gotten, or we can envision a bigger role for our sector befitting our size and scope. Given that the U.S. nonprofit sector represents 10 percent of the U.S. work force, the third largest share behind the retail and manufacturing sectors, we have an untapped opportunity.

Imagine what a combined voice could accomplish.

Independent Sector and the council could form a whole that would be much greater than the sum of its parts. The new entity could harness our entire sector to meet old and new social and economic challenges. Such a new organization could meet our sector’s higher collective purpose — to influence how this country meets its obligations to our most marginalized citizens, whether they are poor, sick, homeless, immigrants, disabled, or victims of systemic discrimination.

There is substantial overlap in membership among foundations that are giving their resources of time, money, and energy to two entities with nearly identical interests. Putting this energy behind a single organization would seem beneficial for all.

The two organizations also have nearly identical mission statements. The council’s mission reads: "Provide the opportunity, leadership, and tools needed by philanthropic organizations to expand, enhance, and sustain their ability to advance the common good." Independent Sector’s mission is as follows: "To advance the common good by leading, strengthening, and mobilizing the nonprofit and philanthropic community."

There is little difference between the aspirations of either organization.

With such intertwined memberships and interests, shouldn’t the boards of these organizations consider the question of whether a merger is feasible to achieve a larger purpose? At this current inflection point, shouldn’t members of both organizations ask whether a combined organization could have more influence and impact in shaping public policy that could improve the lives of disadvantaged people?

Asking the question about the merits of a possible merger is not a critique — veiled or otherwise — of the leadership, the boards, or management, past or present, of either organization. It is intended simply to ask whether there is a better way for our sector to have a much larger impact on the lives of marginalized people than we are able to achieve today with two separate organizations. This is the only question that should drive this discussion.

There will be a long list of reasons for maintaining the status quo and only a few reasons for disrupting things. But here’s why it makes sense to do this:

First, Independent Sector and the Council on Foundations separately lack the clout to significantly influence public policy or public attitudes — today or in the future.

Unfortunately, when it comes to national public-policy directions, the collective influence and voice of our sector seems close to nonexistent. The evidence of this is that none of the presidential candidates or their key representatives have seen fit to share their policy positions with either the Council on Foundations or Independent Sector, our two leading national groups. And our sector’s leaders are not sought out for their views on Sunday talk shows or regularly quoted in major media outlets.

Second, given the overlapping memberships and values of Independent Sector and the council, there does not appear to be a strong business case for separate entities to exist. The idea that foundation leaders need to meet away from nonprofit leaders so that they can avoid unwanted solicitations seems both counterproductive to why we all exist and easily accommodated by no-solicitation protocols and separate breakout meetings.

Third, Independent Sector is in the midst of a search for a new leader, and mergers are easier to consider when there is a leadership transition occurring at one, if not both, of the organizations. New leaders and the boards that have hired them are seldom willing to consider mergers after they just completed a time-consuming and expensive search process.

Fourth, there are few apparent downsides of a merger. What issues are being addressed by either organization that could or would no longer be addressed by a new entity? What would be potentially lost that wouldn’t be worth the significant potential gains? I have been unable to think of a single compelling issue.

A merger should not be undertaken to reduce membership fees. On the contrary, we should assume that the combined fees would enable a new organization to have the very best staff with the expectation of achieving the highest results. A merger would require that members think beyond their narrow individual interests. It would require members of both organizations to demonstrate political savvy, recognizing that they will not necessarily agree with every policy position of the new organization. While some members may drop their memberships, many more nonprofit groups and grant makers would likely consider joining the new organization.

As someone who oversaw the merger of Peninsula Community Foundation and Community Foundation Silicon Valley to become Silicon Valley Community Foundation, I know first-hand that mergers are extremely difficult, challenging, and not for the faint-hearted. They require an inspiring vision. They require effective board and staff leadership. They require sufficient financial resources. And they demand patience over two to three years.

All four of these elements are essential for success and are within the capacities of our sector. Such mergers should only be undertaken if there is the strong belief that two plus two will equal five or more. I believe a merger between Independent Sector and the Council on Foundations holds such promise.

Imagine the possibilities. A merged organization could help shape major public-policy issues. It could promote the best ways for foundations and nonprofit organizations to operate as well as promote effective partnerships with the federal and local governments. It could also forge a much stronger and better integrated network among the disparate regional associations of nonprofit organizations and foundations, working with them on local public policy, strategy, and training and establishing shared memberships.

Such a new organization could help revitalize our sector and prompt us to become re-energized about why we exist. Our sector desperately needs a bold, transformative effort to become a powerful voice for millions of Americans as well as for those who work in our sector and those who can benefit from our philanthropic work.

I hope that you and your boards will agree that it is worthwhile to consider merging. And I hope readers will show their support for this idea. Share your thoughts with me on Twitter ­ @emmettcarson and use the hashtag #MergeISandCOF.