The Michigan United Way merger reflects the national trend; more likely to come
VSChris Sargent likens the merger of three Michigan-based United Way affiliates to a regional business with local outlets.
“We’re not doing this to cut a certain percentage (of the staff), if you will,” explained Sargent, who is president and CEO of the United Way of Battle Creek and Kalamazoo Area. “We do it, really, to keep the talented team that we have and the capacity that we have in the local communities. Each of our locations in the four communities we serve will have these outlets and we will have a regional business entity.
Sargent’s United Way officially joins long-time partners in the United Way of the Capital Region and the United Way of Jackson County. The trio of organizations, which have worked together as partners for about a decade, will become the United Way of South Central Michigan.
First, the new organization will establish a single board of directors with equal representation from the three United Ways. The board will then create a management team and maintain other governance functions. The leaders of each chapter plan to officially roll out the new organization in five or six months.
While the United Ways of South-Central Michigan could centralize administration of the three organizations, leaders from each of the United Ways stressed that they plan to maintain a prominent presence in their total six-county territory.
“The basic needs issues we focus on — education, financial stability and health — are similar in each of the communities, but how we can invest or partner may be different,” Sargent said. “(The merger) allows us to do things together in the greater region, while at the same time there are things that we’re going to do on a community-by-community basis that might be very specific to what that community needs.”
The structure of the new organization will also ensure that donations made locally are leveraged within the community and not distributed elsewhere. At the same time, Sargent said the merger opens the organization up to new partnerships — perhaps with larger companies that aren’t limited to one county or one community, but instead want to create cost savings. of scale with resources.
“We wanted to keep our local staff that people are used to working with,” Sargent said. “Sometimes people want to give locally where they live and work. If I live in Kalamazoo and work in the community, I might want to make sure that my annual donation to the United Way stays in that community, and that’s sort of a fundamental principle that we’ve operated by from the beginning.
The consolidation within the century-old network of 1,300 locally-run United Ways has precedent, and the momentum continues to play out within the nation’s largest nonprofit.
In fact, merging isn’t even new for two of the three organizations getting into United Ways of South Central Michigan. The Greater Kalamazoo United Way and the United Way of Battle Creek merged in 2012 to form the United Way of the Battle Creek and Kalamazoo Region. Sargent was part of the Kalamazoo organization during the merger.
Capital Area United Way and Eaton County United Way also merged in 2016.
“Ten years ago I was part of the merger with Battle Creek and Kalamazoo…so there are examples, even in our current area, where we did that and what that led to,” Sargent said. . “It’s something we share transparently with our United Way colleagues across the state and country.”
“Nationally, United Way has merged around 10% – I think that will be more of a trend going forward,” he added.
Mike Larson served as CEO of the former Greater Kalamazoo United Way in its previous merger and is now President and CEO of the United Way Michigan Association. United Way organizations should succeed through partnerships and mergers.
“It’s about how we create greater impact in our communities by creating efficiencies and bringing expertise that we may not have individually as an organization, but collectively we can increase our ability to do more work in our local communities,” Larson said. “We all have to have the administrative overhead that requires us to run a nonprofit, but it brings the ability and skills that really allow us to do more work in the community.”
Larson also hinted at further consolidation here in Michigan.
“I foresee more things like this happening, no doubt,” he said. “I can’t name any names, but there are already conversations with United Way. It’s a big step for organizations to consider doing this. It’s not just the organization, but also the community supporting the organization that has to say, “Yes, we support that. It can be scary.
In addition, consolidation within the Centraide network has taken place across the country. Last summer, six United Way affiliates in a six-county region of New York merged into one. Similar activity has been reported in states like Texas, Maine and Indiana.
Although Sargent and Larson agreed that consolidation was not necessarily driven by the dynamics of the COVID-19 pandemic, it was a factor. This is especially true since United Way is leveraging workplace giving campaigns, which were hit hard during the mass exodus of office workers. Some offices have not reverted to a typical in-person setting, prompting some United Way organizations to rethink their approach to fundraising.
It’s not a problem unique to United Way either, according to Larson, who pointed out that nonprofits of all kinds face similar challenges.
“People are reassessing the way they do their jobs and run the operations of their organizations, wondering if this is the most effective way to move forward and serve the community,” Larson said.
“I think you’ll see more (merge) down the road,” he added. “Some might start with partnerships first and do some things together before looking at a merger, but I think you’ll see United Ways make the transition, and a variety of other nonprofits will also start looking. ”