Nonprofits discover each other
Like many mental health providers, FSW Inc. knew the future would require an electronic health records system.
But as a Bridgeport nonprofit, the family service agency didn”™t have the funding to research and develop a system, on top of managing its many other programs to promote economic self-sufficiency.
“It would have been exceedingly challenging,” said Robert Muro, FSW COO. “The costs involved in purchasing and operating a system are huge.”
But rather than ignoring the need or going in head first, the organization collaborated with two other family service agencies with similar needs and missions.
Armed with a state grant, the organizations pooled their resources together and purchased the software needed to develop an appropriate platform.
With many Connecticut nonprofits strapped for cash, the number of mergers and partnerships formed between nonprofits is increasing. Given the financial challenges in serving individuals in a down economy, a collaboration between nonprofits can mean significant cost savings and in many cases, improved quality or scale of services.
“We would have had to have gone to an electronic record at some point and the collaboration allowed us to proceed forward with implementing it, in what is otherwise a difficult financial time for most nonprofits,” Muro said.
While a reported 28 nonprofits have closed their doors statewide since 2007, another 48 have either merged or established an alliance with another organization, according to the Connecticut Council for Philanthropy.
In response to advocates”™ demands for state support, General Assembly members approved a one-time grant program in 2009 to help facilitate additional collaborations as nonprofits restructure and find ways to streamline services.
Between 2010 and 2013, five collaborations received a total $1.3 million in funding. And with an additional $3.7 million remaining, the state Office of Policy and Management is currently accepting applications until Feb. 14 for a new funding round.
The program doesn”™t cover merger activities and is, instead, targeted toward more programmatic partnerships ”” like an after-school program partnering with an arts organization ”” or shared back-office services between nonprofits such FSW”™s record system.
Since releasing a merger trend report last year, officials at the Fairfield County Community Foundation (FCCF) have hosted various panels for additional nonprofits to learn about collaborations and mingle with other groups to find shared services.
In FCCF”™s report, 57 percent of survey respondents were involved in a programmatic partnership while 10 percent of respondents shared back-office services. In both instances about half of those in a collaboration reported cost savings and most reported an increase in services provided.
Cost savings are not always a given, said Elaine Mintz, director of FCCF”™s Center for Nonprofit Excellence, especially if a collaboration is the only way a program can be sustained.
Yet if collaborating groups have similar cultures and missions, it can provide benefits beyond cost savings.
“I think in the nonprofit sector you can say there”™s never enough support,” Mintz said. “But this (state program) is providing some much needed support.
“Whether it”™s a physical space that needs to be expanded or IT systems that need to be intergraded, there”™s all these costs associated with collaborations,” she added. “To have a funding stream available is wonderful. I think it shows the state is forward thinking and shows the state believes when nonprofits work together that they can be more efficient and effective.”
Now that FSW is working with agencies in neighboring towns, Muro said the collaboration had extended past a software platform into a rich relationship for executives to brainstorm on separate topics and partner on training programs.
“When you pull your resources together and you have good people coming to the table, there are a lot of synergies beyond sharing an electric health record platform,” Muro said. “It”™s been a win-win-win, for all three agencies. As someone who is relatively newer to my position, it”™s been wonderful to meet people across the other agencies and get to know them and what they”™re doing.”